- Coronavirus pandemic has derailed normal economic activities of various countries of the world; posing challenges for operators across the globe.
- Projects such as 5G requiring exploratory technologies are often perceived as expensive and hard to manage given constrained resources.
- While postponement of various spectrum auctions is witnessed, some of the countries have been elected for innovative measures to launch 5G.
- The thrust for climbing up the ladder of 5G growth is likely to be slower than what was expected earlier. However, it seems that 2020 will emerge as a wavering blaze in the era of 5G.
Currently, connectivity needs of the people are changing, and it seems that 4G networks would not be able to keep up with this ever-changing demand.
The emergence of new G into play-5G
5G is set to revamp the way everyone works or live.
With 5G network being switched on, there are numerous opportunities created for the telecom operators such as enhanced mobile and fixed broadband with reduced latency for users, adoption of IoT devices and other businesses.
COVID-19 has toughened its clamp across the globe. The business environment is evolving amid COVID-19 pandemic, while advancing the need for low latency connectivity along with new ways of remote working.
Do you know 2020 was considered to be a year of 5G? But now amid COVID-19, do you still think it will be a remarkable year for 5G?
Let us deep dive and know more about it.
COVID-19 has led to decreased market penetration, and uptake as 5G comes up with the cost of buying a 5G enabled smartphone and tariffs.
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5G and COVID-19 turmoil
Dreams of many countries to embrace 5G technology may be shoved by a few quarters amid COVID-19 chaos. Wuhan, China originated virus has sceptically impacted the deployment of 5G technology across the globe.
COVID-19 is leading to the postponement of auctions for 5G licenses and delay in 5G launches.
A significant impact on the development of 5G is caused by a series of postponed auctions for 5G spectrum licenses and delay in 5G launches.
Auction for licenses is handled at nation’s level in cooperation, with the regional governments and telecommunications industry members. There have been suspensions of auctions across various countries such as Spain, France, Austria, Portugal, and India.
Since there will be delay in 5G auction, the infrastructure vendors like Ericsson, Nokia, Huawei to name a few are bound to suffer, as it would be challenging to set up infrastructure without frequencies. Further, operators would not be able to conduct their lab tests and trials.
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The supply chain for 5G has been slowed; impacting roll out
The world has come to a standstill, with accelerated spread of coronavirus
resulting in disruption of supply chain for 5G network infrastructure, brought by factory shutdowns, hindering the availability of components for 5G Radio Access Networks and optical equipment.
Postponement of auctions by telecom operators amid investment issues
The battle to generate revenue streams required for building major technology is real, with stagnant ARPU (Average Revenue Per User) of various telecom operators; they are themselves postponing auctions.
This postponement is done with an objective to maintain adequate cash flow required for keeping up with the network bandwidth arising from the sharp rise in data traffic amid lockdown.
Fundamentally, it is understandable to assume that companies will prolong their 5G plans or put related trials on hold if their revenue prospects worsen considerably.
Impact on Smartphones
Due to coronavirus caused turmoil, production of smartphones had been rigorously impacted. Many 5G smartphones were expected to launch for the mass consumers leading to large-scale deployment of 5G network.
However, due to temporary suspension of Smartphone production, it will be difficult building both 5G infrastructure and smartphones. Due to scantiness of 5G-ready devices consumers and businesses are sticking with 4G network presently.
In the wake of current crisis, various telecom operators have been working meticulously with governments for its efficient management. Spectrum resources made available by governments amid pandemic may bestow towards optimisation of mobile network infrastructure to better serve needs of the consumers.
Some mechanisms that are being implemented by the government include: Providing of the temporary licenses to various telecom operators to use any portions of the unallocated spectrum. Some of the countries witnessing this mechanism include USA, Ireland, Jordon, Tunisia, South Africa, Brazil, etc.
Also, government and regulators of various countries are looking at ways to promote better connectivity by aiding with additional investments. Countries such as Canada, Romania and South Africa are delaying the annual fee payments for spectrum.
Undoubtedly, the crisis is causing negative impacts worldwide. However, there are ever increasing requisites with respect to seeking information, communication, and connectivity with the outside world. Thus, making us grab the advantages that 5G exemplifies even more than before.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
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