5G roll out facing "significant delay" due to coronavirus

19 May 2020 Consultancy.uk 3 min. read
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Despite conspiracy theorists routinely tying coronavirus to the installation of 5G internet apparatus, a new report has found that the pandemic has led to what could be a “significant delay” in the technology’s roll out. Even short-term delays in 5G could see operators having to reallocate some of the money earmarked for its roll out to other areas in the interim – further delaying its deployment.

At present, PwC anticipates a 10% year-on-year fall in GDP if the UK experiences a “shortened peak in Covid-19 cases and lock-down” – but this could be even worse. In a “Smooth exit” and “Bumpy exit” scenario, overall UK GDP could contract between 12% to 16% quarter on quarter in Q2 2020 respectively. Even in the best-case scenario then, the current economic crisis is expected to dwarf the previous global financial crisis in 2008, which led to a contraction of around just 2.1%.

Examining the likely impact of the current Covid-19 crisis on fixed broadband and 5G mobile services and deployments in the UK, the Big Four professional services firm has predicted the UK telecoms sector employs some 226,000 people and now carries a “Medium” risk to jobs due to Covid-19 (i.e. the potential for job losses), mostly as a result of operators’ seeing lower cash flow – especially as many operators “are reporting minimal new customer acquisitions.”Comparison of real GDP index by scenario and pre COVID-19Overall, it is expected that a worst case scenario will see the telecoms stung with a -5% GVA fall in the coming months. Due to this, PwC expects that Covid-19 and its lock-down will result in costly delays to new infrastructure. In particular, the researchers asserted that the roll out of 5G “ultra-fast” mobile broadband connectivity is “likely to be delayed as a result of the pandemic” and this could be a “significant delay.”

According to PwC, any initial delays in 5G could prove to be very costly for operators – and this cost may lead operators to consider reallocating some of the money earmarked for 5G to other areas in the interim. Ironically, the advent of Covid-19 seems to have significantly slowed the advent of 5G technology – a technology which many an online conspiracy has devoted significant time and energy to suggesting is responsible for the virus in the first place; despite the fact it is present in many locales where 5G now remains a distant prospect at best.Impact of COVID-19 on Telecoms GVA scenarioDespite falling revenues, the current crisis may present certain operators with a major opportunity, however. The reception for 5G prior to the pandemic was lukewarm at best – many customers remained sceptical of spending more money on a product only marginally faster than 4G, which to many seems like ‘more than enough’ of a service.

However, 5G not only provides faster speed of communication, but also promises low latency connectivity and the ability to enable large numbers of objects to communicate simultaneously. In a world where mass conference communication has suddenly become essential to keep businesses afloat (though these capabilities are not available yet), that could enhance productivity in industry, healthcare and transportation, and may aid the recovery from the pandemic and any subsequent financial downturn.

In conclusion, PwC therefore stated, “This pandemic is a pivotal moment for the telecoms industry, and is likely to increase public awareness and policymakers’ acceptance of the ways in which communications technology can not only keep us entertained, informed and in touch, but help us stay safe. There has never been a better moment for telecoms operators to boldly pursue these widespread and significant opportunities.”