Wireless networks have performed admirably during this challenging time. Credit is due to senior leadership, and gratitude is due to front-line workers across the ecosystem. There has been agility and outside-the-box thinking from both the private and public sectors, which I hope carries over to the much-anticipated ‘beyond coronavirus’ era.
In the meantime, I’ve received many questions from clients and the media about what the coronavirus era might mean for 5G. My current thinking is there will be a negative impact on 5G in the short term, but that the longer term is looking even more favorable. Before delving into this hypothesis, two wildcards are: not knowing how long the economic shutdown will last or how deep the recession will be; and how much the global supply chain will be disrupted.
I do believe, with a fair bit of confidence, that the buildout and take-up of 5G will suffer, in the short-to-medium term. This theory runs counter to what some of the service providers (SPs) and other key players are saying. The SPs have said that their 5G buildout plans are proceeding as planned. The work teams are out at sites and towers, and the OEMs have not yet announced any delays in equipment delivery. This is an admirable accomplishment.
However, as some other channel checks and background discussions have revealed, there are the beginnings of delays in some of the new site development. I think this is particularly true of some of the sites needed for the mmWave builds. The main reason here is that many municipal governments and others involved in the site review/approval process are adjusting their workflows, and are operating at a diminished level, so processes might take longer or might fall lower on the priority level. It should be said that this all varies quite significantly from one market to another.
The other key factor affecting the nearer-term 5G build is how long this current crisis goes on. If things start to open up in the June-ish timeframe, then the disruptions/delays will be modest. If the economic shutdown goes much beyond early summer, or if there’s a recurrence, I think there will be a greater disruption to 5G buildout plans. First, a protracted economic (and social) disruption will likely affect the global supply chain. It’s also possible that some resources will be repurposed to other priorities. Also, a longer shutdown will mean a deeper recession. This could lead to some adjustments to capex plans, which have so far held up pretty well, at least in North America. Plus, there could be further delays in other arenas that affect 5G, such as the CBRS and C-Band auctions, and other regulatory considerations.
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We also need to look at the demand side. Especially in a coronavirus era, just because the SPs build 5G doesn’t mean customers will come. The economic downturn will certainly affect handset upgrade cycles and the willingness of consumers to shell out $1,000 for a fancy 5G phone. Enterprise spending will also be affected, and re-prioritized. It’s also possible that some 5G phone launches will be delayed. I’ve already said, for example, that a mmWave iPhone in Apple’s usual September cadence is not a sure bet. 5G, for at least the next 1-2 years, is in ‘nice to have’ rather than ‘must have’ territory.
Communications is mission critical
OK, so much for the doom and gloom. Because in the longer term, I think the world we find ourselves post-coronavirus will be even more favorable for 5G. There are three broad-brush strategic reasons why I think this is the case. First, as this past few weeks have already revealed, communications infrastructure is proving to be critical. Ubiquitous high-speed connectivity and sufficient capacity are requirements, from both the standpoint of national survival and worker productivity. They are among the ‘weapons’ in a pandemic war.
Second, shifting work patterns, including more remote work, will shine a light on the need for the benefits of 5G, either for primary connectivity, or for back-up/redundancy to fixed networks.
Third, the coronavirus era could accelerate patterns in the future of work already underway toward greater automation and Industry 4.0 initiatives. 5G is a critical piece of that. I could see enterprises, in the 2-3 year timeframe, becoming much more serious about 5G initiatives.
Two other points here. One is related to LTE. The SPs have all reported a significant increase in wireless voice minutes, for understandable reasons. Although much of this is over Wi-Fi, there has been a marked increase in circuit switched/VoLTE. This means that LTE – and even 3G – coverage will remain important as a base layer for the foreseeable future. Plans for ‘voice over NR,’ or sunsetting legacy networks might be stretched out, as a result.
Second, I have some updated thoughts related to fixed wireless access (FWA). I’m of two minds here. On the one hand, we’ve seen how critical a decent broadband connection is during these times. 5G, and the significant increases in wireless network capacity on the way, lend credence to the role of FWA. Certainly, as an option in areas that are un-served/underserved, and in other situations as a back-up to broadband or a potentially more affordable alternative. On the other hand, the massive increases in home data usage we’re seeing in this Zoom/streaming era will prove particularly demanding on wireless networks, whose capacity and economics cannot support households that are now consuming in excess of 500 GB per month, and trending toward the 1 TB mark.
With that, my personal wishes for your health and safety.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is managing director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.