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The current situation around COVID-19 will most probably induce a shift in the verticals that look into 5G deployment.

Furthermore, the COVID-19 global proliferation has created massive media hysteria and public panic and has pushed several governments to take some contingency measures to contain its spread. 

The situation has led consumers to migrate their social activities to online and increase their Internet consumption to access information and use digital services like mobile banking, online shopping, or food home delivery. 

Businesses have also offered their employees the flexibility to work from home, which is having a significant impact on both mobile data and voice traffic.

Businesses have also discovered new ways of marketing their brand, training their staff, and moving business away from public gatherings to embrace new digital tools with the potential to save both time and money in supporting their operations. 

With all these constraints, current mobile and fixed networks have shown very strong resilience to the crisis, even in countries like Italy, China, and South Korea where extreme contingency measures have been taken. Indeed, we have not heard of a single network blackout or outage since the start of the crisis.

This is largely because these networks are largely over-provisioned to cope with emergencies of this calibre. The question is how long this resilience will last if the COVID-19 crisis persists for an indefinite period?

READ: A Supply Chain In Shock: The Impact Of COVID-19 On Manufacturing.

Short-Term Impact: ABI Research expects mobile data traffic to surge significantly as a result of COVID-19, but current telco networks are unlikely to be challenged by the situation, except in a few areas that are poorly serviced by these networks. 

However, the further spread of the virus may limit the upgrade of these networks either because of equipment shortages or restrictions taken by mobile operators to limit the mobility of staff to prevent further spread of the virus. 

These network upgrades will not affect the networks’ resilience to the surge of data traffic induced by the crisis, at least in the short term. 

However, this will likely delay operators’ ability to execute on their plans to modernise their networks, using more advanced technologies like 5G, network virtualisation, or AI, which will have a knock-on effect on their financial performance in the short term.

Long-Term Impact: Despite all the negativity surrounding the spread of COVID-19, the current crisis is becoming an enlightening experience and a great accelerator of digitalisation for both consumers and businesses. 

For example, consumers, even the most sceptical ones, are now prepared to integrate a digital lifestyle in their everyday lives. 

As a result, online services, including online shopping, e-banking, remote education, remote healthcare, mobile entertainment, and video-based social networking will proliferate at an unprecedented rate and will no longer be limited to a particular demographic, geography, or social class. 

Enterprises will also rely more on video conferencing, online marketing techniques, and online training for empowering their businesses. They will also be more favourable to automating the operation of their businesses so they are ready to handle situations similar to COVID-19. 

This development will greatly benefit several transformative technologies, including 5G, AI, Machine Learning (ML), AR, VR, location technologies, cloud and entertainment localisation, robotics, and many others.

Recommendations: Various industries, governments, and public organisations will learn a big lesson from the current crisis and should prepare themselves to better deal with large-scale pandemics, minimising their disruption and any subsequent economic downturn. 

Decision-makers will have to strengthen their contingency measures and rationalise their reliance on physical mediums, such as unnecessary event attendance or training, mainly when they have digital alternatives at their hands. 

They will have to invest more in educating the population on the benefits of having a balanced digital lifestyle and pushing enterprises to accelerate their digital transformation.

READ: Automotive OEMs Must Improve Online Sales Models To Mitigate COVID-19 Sales Slump.

A Blow To The Standards Bodies

In addition to its detrimental effect on society as a whole, COVID-19 is also affecting standardisation work that would make 5G available for enterprise use cases. 

The cancellation of leading industry events, such as MWC in Barcelona, results in more complicated workflows for the relevant standardisation body, the 3GPP, which means that the freeze of Release 16 (which is of key importance for 5G applications in industrial and logistics environments) will most likely be delayed, which will, in turn, delay the rollout of 5G in warehouses, shipping ports, and factory floors.

Short-Term Impact: While COVID-19 will delay 5G standardisation work that is vitally important for its application in industrial use cases, a situation like this has accelerated 5G deployment in the healthcare sector in China. 

By enabling remote diagnostics, ubiquitous 5G coverage can help prevent the spreading of diseases like COVID-19. 

This is already happening in the Chinese Province of Sichuan, where the 5G network infrastructure has already been used to diagnose patients with COVID-19 since January 2020 by offering video consultation to patients that show symptoms, because 5G enables the wireless transmission of particularly large files (like video data).

Meanwhile, in Wuhan (the origin of the virus), 5G has been installed in every makeshift hospital in January 2020 to enhance remote diagnostic facilities. More than 1,400 medical staff from the Chinese army have started treating these patients via video consultation.

Long-Term Impact: Even though in the short-term, this current pandemic is putting timely enterprise rollout of 5G at risk (due to the delay in standardisation framework), in the long-term, enterprise verticals will consider 5G for automating workflows in factories and other industrial environments in order to keep supply chain disruptions at a minimum. 

However, we will also see 5G applications for life-critical verticals, such as agriculture/food production, to pick up pace, while a growing number of countries will consider enhancing their healthcare sector with 5G-enabled capabilities.

Recommendations: Situations like these underline the importance of a technologically up-to-date healthcare system, as well as more automation in factories and production outlets. 

However, the current situation around COVID-19 will most probably induce a shift in the verticals that look into 5G deployment.

While it puts 5G applications in industrial surroundings in a difficult position, current experiences will ignite considerations for 5G applications in healthcare and agriculture/food production. The telco ecosystem must prepare for this shift.

5G & Mobile Network Infrastructure

The current global outbreak of COVID-19 is creating a challenging environment for telco operators with aggressive deployment plans, but also the entire supply chain that relies heavily on Chinese manufacturing.

In addition to the previous geopolitical challenges that are halting operator rollouts, the new virus adds further strain and ambiguity in the 5G supply chain.

Short-Term Impact: In the short term, COVID-19 will slow down the deployment of 5G considerably, especially for vendors that rely heavily on Chinese manufacturing for their 5G equipment. 

Meetings that take place physically will also likely be postponed, meaning that The 3rd Generation Partnership Project (3GPP) will likely delay its up-coming Release 16 standard until the end of the year, adding further confusion for enterprise implementers anticipating this new version of the standard that introduces enterprise features. 

The overall development of 5G for both consumer and enterprise applications will likely be delayed as mobile operators look for ways to shield their businesses against both geopolitical constraints and the effects of the virus.

Long-Term Impact: In the long term, the effects of the virus will likely accelerate the current trend to make 5G supply chains more robust and less reliant on a very small set of very large infrastructure vendors. 

This will be particularly evident in the US market that is currently planning to create a more open ecosystem that relies on smaller and more agile vendors. 

Potential supply chain shortages for 5G equipment will reaffirm the strategy of the US Government to create a more open market, which will go well beyond the U.S. market in the long term. 

Furthermore, the telco community will likely establish better ways to meet virtually and foster a more distributed development environment, especially for the 3GPP.

Recommendations: There is little that mobile operators can do currently to counter the effects of the virus, but in the long term, the entire value chain should work together to create a more open ecosystem. 

This ecosystem should be primarily positioned to create open platforms that many different companies can use to create added value. This will be particularly vital for the success of enterprise 5G and private cellular.

READ: COVID-19’s Impact On The Industrial, Collaborative & Commercial Robotics Sector.

The Emergence Of New Use Cases

The outbreak of COVID-19 has created a crippling effect, not only on service industries but also on manufacturing enterprises, including 5G infrastructure vendors. 

The 5G New Radio (NR) part of the supply chain has been particularly affected by this, especially because most 5G radio units and active antennas are being manufactured in China.

Despite the current ongoing discussion on OpenRAN and open networks, most advanced 5G networks still rely on Tier One infrastructure vendors and their supply chains have been disrupted.

Short-Term Impact: The current virus outbreak will likely delay the deployment of advanced 5G NR systems, including Massive Multiple Input, Multiple Output (MIMO) and active antennas that several operators have already started deploying. 

This may mean that operators that have already deployed a significant number of base stations will be in a better position to become early adopters and benefit from an earlier transition from previous generations to 5G, but this will rely on the availability of relevant handsets.

In the short term, 5G radio deployments will be delayed further due to geopolitical constraints and COVID-19.

Long-Term Impact: In terms of business, it is important for mobile operators to broaden their supply chain and avoid a single-vendor infrastructure market. Apart from that, the effects of the virus outbreak will likely accelerate more innovative use cases and services.

For example, considering a 5G Ultra-Reliable Low-Latency Communications (URLLC) scenario, if surgery and health monitoring can be done remotely, the doctor will not need to physically meet the patient infected with the virus.

Recommendations: 5G has reached significant momentum, but the current outbreak will slow down its progress. A great lesson has been provided by the virus breakout to both network operators and related authorities.

The former should be able to manage the risk of relying on a few vendors dominating the infrastructure market. The latter should embrace new technologies and understand how these can be used in turbulent times to improve business and society.

A full analysis of the impact of COVID-19 on various industries is provided in ABI Research’s white paper, Taking Stock Of COVID-19.

Article by Stuart Carlaw, chief research officer, ABI Research.

 

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