5G timetable disrupted by the public health crisis
Thus far, several EU member countries (including Austria, Croatia, France, Poland, Portugal and Spain) have postponed the tender process for 5G spectrum awards, because of the Covid-19 epidemic. Faced with delays in their procedures, several regulators have decided to award temporary licences – including in the United States, Saudi Arabia and Belgium. Tender procedures are nevertheless likely to be back on track in the second half of 2020, or during the final quarter of the year. And resulting delays are not expected to exceed six months, once “normal” economic activity resumes. A good case in point is France where auctions for awarding 5G frequencies have been postponed until September 2020.
In those locations where the calls to tender for 5G spectrum have been officially postponed, we can expected commercial rollouts to be delayed as well. This means rollouts will take place a few months later than initially planned, as the shutdown of municipal services has made it impossible to issue mobile operators with the construction permits they need to deploy their new cell sites. In addition to the rollouts, network coverage remains a central issue for 5G, especially now that deployments may be delayed. 5G has been launched in most of the major mobile markets, but network coverage is still sporadic and confined to densely populated areas. The next two years will be crucial for building out the networks, and there is still a long way to go before nationwide coverage is achieved.
How will this affect consumer adoption of 5G?
Consumers may prove reluctant to buy new expensive 5G-compatible smartphones. Concerns over the impact of electromagnetic fields on human health – which have become increasingly vociferous of late, and even resulted in the destruction of 5G masts – may well spread, and it could be some time before studies on the matter take a clear stance.
In Europe, the coronavirus is expected to affect 5G rollouts in the short term. Current subscriber numbers are very low and growth, while real, is likely to be slow. Added to which, we should expect the global 5G take-up rate to be lower than expected.
Investments need to step up for Europe to stay in the game
We will no doubt have to wait a little longer before reaping the benefits of expanded 5G coverage. Despite which this crisis remains hard to manage. The pace of 5G rollouts could be accelerated by an injection of public monies. While China has launched a massive investment plan of close to 500 billion euros to finance infrastructures, of which a major portion will be for 5G deployment, several European governments have yet to make an official announcement regarding delays and their possible support for this new technology.
According to our estimates, we should reach the milestone of 2 billion 5G subscribers worldwide by 2026. China will be home to close to half that number before 2026, due to the sheer size of its population.
The Covid-19 crisis has highlighted tremendous opportunities for 5G in several sectors
The pandemic will clearly have sizeable repercussions on the 5G ecosystem in the short term (postponed spectrum auctions, delayed commercial launches and deployments, economic impact, etc.). At the same time, however, it has also revealed the essence of 5G’s role, and the many benefits this new technology can bring to several specific sectors, such as health, media, education, transport and retail sales.