Will 5G buildout slow or accelerate in the COVID-19 era?
While COVID-19 has ground the economy to a halt in many corners of the U.S., the picture for 5G buildout could flourish long term, with caveats, say industry watchers.
5G may take a hit in the short and medium term given spread of COVID-19 globally and resulting supply chain disruption, 5G hardware delays and general effects of the economic downturn. But in the longer term, the burgeoning needs for home connectivity, digital health and even economic stimulus measures may give 5G buildout a boost.
5G, or fifth-generation wireless connectivity, has promised dramatically faster speeds — up to 100 times faster than 4G connectivity — as well as greater network reliability. Enhanced connectivity will help enable novel connected capabilities, such as driverless cars, drone delivery and augmented reality-enabled gaming.
With stay-at-home orders in place around the world, legions of employees working remotely and distance learning in full swing, high-speed connectivity has become essential infrastructure. It has also strained household networks, which tend to be less robust than corporate ones. That’s a problem when so many workers — and businesses — now rely on home networks for daily tasks.
“The shift from internet as a commoditized consumer service to utility is really under great scrutiny now,” said Jessica Groopman, industry analyst and founding partner at Kaleido Insights. “This is a lifeline for many people now — even more than it was in the past.”
5G connectivity could help improve performance and ease some of the strain on home networks, though.
“COVID-19 has mobilized the telecom industry to focus on bolstering broadband infrastructure capacity and availability to support consumer, work-from-home, government/public safety and enterprise demand,” wrote 451 Research in the report “COVID-19 and 5G: Short-term Pain for Long-term Gain.”
“One of the positive outcomes of COVID-19 could be stronger demand for 5G as a replacement for legacy broadband infrastructure such as DSL. 5G performance is also getting a chance to shine as a result of COVID-19, especially in areas like telehealth, where the long-term impact is expected to be high.”
In the short term, the Federal Communications Commission (FCC) has called on service providers to offer additional bandwidth to households for 60 days to handle the immediate crisis. But in the longer term, the hope is that 5G connectivity could ease the strain on network connectivity.
Short-Term Prospects for 5G Hardware and buildout
Some observers expected 2020 could be a significant year for 5G buildout progress before the emergence of COVID-19 tore through the globe and the economy.
But, for 5G connectivity to take off, additional buildout is necessary, and 5G hardware production — phones, chips, etc. — has to resume. With the supply chain severely disrupted, hardware production suffering collateral damage and consumer demand slumping, delivery of 5G-ready phones and other hardware may slow. Even when 5G-ready phones are available, consumers may view new hardware as a nice-to-have.
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