In this blog, we analyze COVID-19's impact on 5G using the same framework as our recent webinar, "Preparing for the aftershocks of COVID-19." Our framework identifies the five major trends that will define our post-COVID future. These trends don't address directly diagnosing and treating the disease but look at the broader and lasting impact.
The 5 major trends are:
- Infection prevention: The technology's role in tools for personal hygiene, sanitation, and guarding against disease. While 5G will continue to facilitate mobile communications, there is no discernible impact on infection prevention initiatives. For example, pre-5G technologies are sufficient to enable mobile apps for contact tracing, etc.
- Remote commerce: The technology's role in enabling many products, services, and processes normally done in person to be done remotely. 5G will, however, greatly benefit as a platform that more easily enables remote commerce through mobile platform-based personalized shopping experiences.
- Improving resiliency: The technology's role in enabling greater decentralization and support for strengthening of far-flung supplier chains. Here, 5G faces its own challenges: the twin forces of localization and balkanization of radio standards – both reinforced by new national protections due to COVID-19 – will hamper 5G's innovation and limit its utility in becoming a common technology for geographically distributed manufacturing plants or supply chain warehouses.
- Greater agility: The technology's role in enabling companies to deal with "black swan" events like the outbreak. 5G adoption will be buoyed by its role in facilitating automation through increased use of applications enabled by machine learning and virtual reality.
- Macroeconomic impacts: The impact of macroeconomic challenges to adoption of the technology. The economic shock from COVID-19 has already been unprecedented, and no one has a firm handle yet on what the extent and nature of the damage will be. Regardless, it will clearly have major implications for innovation and growth opportunities. Operator investments in 5G are no exception to the repositioning of spending on present demand vs. future technology.
While COVID-19 is still not in the rearview mirror, we can already predict its impact on 5G. Our analysis indicates the following:
- The economic disturbance from COVID-19 will slow 5G rollout, with the GSM Association cutting its forecast for 2020 5G connections by 25%. The rise of remote work will create more demand for 5G connectivity in the medium term (though right now the decrease in mobility makes 5G less compelling).
- The flexibility and efficiency 5G can provide in manufacturing will boost long-term adoption, though local reliance concerns will slow some deployments, with some suppliers mistrusted.
- The market shifted away from 5G for first half of 2020, with slowed ramp-up in subsequent quarters due to demand reductions and supply chain issues.
We will summarize the consequences of these trends on industry sectors in a later blog. For end users, the slowdown allows more time to prove out 5G use cases or to step into trials of the technology. The pandemic will sharpen the need for a strong case for technology investment, and 5G will be no exception. Companies should use this time to strengthen their business cases for 5G or determine if it is not the right choice for them in the immediate future.