The coronavirus, also known as COVID-19, has taken the world by storm since the beginning of 2020 and has essentially changed the ways in which we go about our daily lives. The way we learn, work, communicate and spend our leisure time has changed drastically as countries all over the world, one after the other, gradually shut down their airports, public areas and workspaces in an effort to contain the fast-spreading virus.
As of yet, the virus has been spreading at such an unprecedented rate that many experts have even speculated that the spread has not even reached its peak. This has caused mass hysteria across all seven continents and it is becoming apparent that a great deal of uncertainty is prevalent and will continue to prevail for the next couple of months.
COVID-19 has affected over 200 countries, areas and territories around the world and there are currently over 1 million confirmed cases of the virus and over 80,000 deaths. It has become a global crisis, potentially the most serious global issue of our time.
The pandemic has catapulted many industries into their digital transformation and has increased our dependency, as a society, on technology. This has made way for an increase in demand for bandwidth, among others.
Having said that, it is also of the essence to consider that the race for 5G was underway before the outbreak. The manner in which the situation has escalated brings to question where 5G rollouts currently stand and how the race for 5G will be affected.
There have been conflicting arguments on this matter, with many experts saying that it will essentially fast-track rollouts due to the increased demand for connectivity due to an increase in online services and the increased need for digital transformation solutions more than ever before while others have argued that this will momentarily halt the progress of 5G rollouts in several countries due to the consequences businesses have been facing from the pandemic itself.
However, it is important to consider the current situation of the 5G race in the face of COVID-19 on a regional basis.
The 5G race
The 5G race has become the World Cup for telecoms, with vendors and operators alike in the world’s most advanced markets, trying to do their absolute best to rollout this next generation technology. Over the past couple of years, 5G has been promoted by countries and governments as the holy grail of connectivity and have deemed it one of, if not the most, transformative technology of our time.
5G is still not fully defined as the standard but it has been speculated that it will do incredible things for use cases which are latency-sensitive, handle incredible quantities of data and transform entire industries as we know them. Another feature of 5G is that it has the ability to operate on various frequencies.
This next generation network is expected to go beyond catering to the evolving mobile demands of consumers especially in the way that it is capable of enabling meticulously designed capabilities which will transform several vertical sectors.
The Asia-Pacific region has been leading the way in this race for some time now.
South Korea was one of the first countries to launch 5G networks. In fact, it showcased 5G during the Winter Olympics. Local operator KT used 5G for a variety of use cases during the Winter Olympics, one of which included beaming live videos of the events that were happening at the time on big screens on buses. While this was a big deal at the time, KT admitted to facing some difficulties in its 5G experiments. A representative from the company stated that compared to LTE, four times as many base stations would be needed for 5G to function efficiently.
In Japan, NTT DOCOMO – the country’s largest wireless carrier - has been trialing 5G since 2010 and did an initial pre-commercial launch for the technology in September last year. The operator officially launched 5G services in March 2020, with expectations for 4.1 Gbps in June as the current maximum data rate is at 3.4 Gbps. Rakuten plans to rollout 5G this year and KDDI launched its network on March 26 this year.
As for one of the biggest players in the 5G race, China, China Mobile, China Unicom and China Telecom all launched 5G in October 2019 but do not provide widespread coverage yet. They mainly cover major cities such as Shanghai, Beijing and Shenzhen.
Hong Kong went live with 5G in April this year and is expected to cover both indoor and outdoor districts sometime this year.
As for India, according to the minister of the Department of Telecommunications, it is set to launch 5G this year. “When the world will rollout 5G in 2020, I believe India will be at par with them,” said the minister, Manoj Sinha. In fact, according to Vodafone Idea Limited, one of the country’s largest operators, it already began testing 5G in 2017.
In Singapore, it completed its first outdoor pilot, involving Nokia and StarHub, in November 2018. The government has said that 5G will go live in the country this year. The Info-communications Media Development Authority (IMDA) has said that they plan to allocate millimeter bands which will be “sufficient for at least two nationwide 5G networks.”
The Middle East and Africa
The MEA region is such a diverse socio-economic region featuring mature, maturing and still developing markets. However, within MEA lies the GCC, home to some of the most advanced telecom markets in the world. The GCC countries include: Saudi Arabia, Oman, the United Arab Emirates, Kuwait and Bahrain.
The GCC’s pioneering mobile operators have already gone live with their 5G networks. In fact, some markets such as the UAE and KSA launched 5G commercial services a great deal earlier than initially planned.
In Qatar, Ooredoo seemed to have begun its implementation in 2016 and they said they were the first company in the world to provide commercial 5G. Vodafone Qatar also launched 5G in late 2018 which covered several areas.
Zain and stc Kuwait (formerly known as VIVA Kuwait) have both launched 5G commercial services in June 2018 and February 2019, respectively.
In the UAE, 5G was first made available in May 2019 by Etisalat. UAE-based operator, du, launched 700 5G sites across the country and were known to have partnered up with Huawei and Ericsson on their 5G infrastructure.
Since June 2019, 5G was made available by stc in the Kingdom of Saudi Arabia, covering the country’s major cities and only through home routers for broadband.
With regards to Africa, it seems that South Africa, Nigeria and Kenya plan to launch 5G in 2020 as well.
Although Egypt began its 5G deployment, it is not yet known when it expects to go live with it.
It has been forecasted that around 32 percent of North American mobile connections will be on a 5G network by 2023. As of yet, Verizon, C Spire and Starry provide 5G fixed wireless broadband internet in a number of locations across the United States. Whereas, Verizon, AT&T, T-Mobile and Sprint have commercial 5G mobile services in a few cities. They expect to offer at-home mobile 5G in 2020.
As for Canada, Rogers Communications began its 5G rollout at the beginning of 2020 and previously invested more than $4 billion on 5G back in 2019. Canada-based company, TELUS, has deemed 2020 to be the year when 5G will be made available for their customers and expects the city of Vancouver to have early access to the next generation technology.
Additionally, Mexican telco America Movil announced that 5G will also be made available during 2020 whereas Puerto Rico began trialing the technology back in 2019.
With regards to South America, Chile’s largest telco, Entel, partnered with Ericsson on its 5G rollout but has not specified when it expects to launch it. In Argentina, it began testing 5G systems back in 2017 and are most likely to launch 5G around the same time as Chile.
Brazil and Colombia expect to go live with 5G in 2020 as well.
The European Commission established the Public Private Partnership on 5G back in 2013 which set the stage for EU member states to accelerate their research efforts and investment in 5G technology. The public funding for 5G was earmarked at EUR 700 million. In order to ensure early 5G deployment within the member states, the Commission has been following the 5G Action Plan for Europe which aims to have a complete 5G rollout by the end of 2020 at the latest and to ensure 5G coverage in urban areas by 2025.
However, this seemed to be the case up until February this year, when the effects of the virus worsened, leading to cutbacks everywhere and pushing 5G further down the to-do list for this year.
So far, most EU member states have begun their 5G journey. In Norway, the country’s biggest operator, Telenor, launched 5G in March this year. Telia, another operator based in Norway, began trialing 5G at the end of 2018.
As for Germany, the plan is to have rolled out 5G by 2025, with a commercial launch in 2020. In fact, Deutsche Telekom rolled out 5G in several German cities mid-September last year.
Vodafone in Czech Republic has said that it plans to provide commercial 5G services in July 2020.
The UK also seems to have begun its 5G journey. EE was the first operator in the country to launch 5G back in May 2019 and the operator now provides 5G coverage in lover 70 cities and towns within the UK and Vodafone UK launched 5G in a number of cities.
In June 2019, 5G was launched in 5 cities in Italy and the country plans to cover 120 towns by 2021.
Spain, the Netherlands, Monaco, Iceland Denmark, Estonia, France and Sweden all planned their commercial 5G launches to take place in 2020.
According to Verizon, bandwidth demand increased by around 75 percent between March 8 and 15. However, despite this surge in network traffic and the recognition of broadband’s importance all over the world at the moment, many service providers are becoming more aware of the financial implications of the pandemic on their businesses. Also, capital expenditure has decreased which inherently places the prospect of 5G in a vulnerable situation.
China has managed to contain the virus and life is slowly but surely going back to normal; however, the majority of Europe remains under lockdown. This could mean that China will definitely take the lead over Europe in the 5G race.
“5G deployment in Europe will certainly be delayed to when the pandemic is brought under control,” said Huawei’s Eric Xu, one of the tech giant’s rotating CEOs. “After the pandemic was brought under control, China has accelerated its 5G deployments.”
China has begun to ease the restrictions pertaining to the workforce which previously included the closure of factories, ensuring people work from home and stay off the streets. The majority of the world is, for the most part, on lockdown. Governments and employers have responded to the crisis which has inherently led to decreased incomes, an increase in unemployment and even some businesses closing down.
Albeit the need for telecom services has become more important than ever before, many households will try to cut down costs and could inherently downgrade their existing packages or cut down on non-essential services.
In the world’s more mature markets, 5G was a top priority for many operators, especially last year. However, given the pandemic and the social and economic implications that have come from it, it seems that 5G will not be a priority for operators in even some of the most developed markets.
It is also important to consider that the primary reason for investing in the next generation technology was to reduce the pressure on congested 4G networks. However, with most of the world being on lockdown since the prevalence of the virus, mobile data traffic has decreased significantly. In fact, according to UK-based operator, BT, by the end of March this year, they reported a 5 percent drop in mobile data traffic. The need for broadband and WiFi has become more important due to people being confined to their homes.
Since Huawei seemed to be leading the 5G race before COVID-19 affected the entire world, this slowdown will be very bad for Huawei, as well as other operators which are working on deploying 5G networks. This will eventually affect other vendors. Ericsson and Nokia, unlike Huawei, will not be able to count on the Chinese market for a number of reasons. Aside from COVID-19 and China’s recovery from it, such vendors will lose out due to China’s long-standing preference to deal with domestic suppliers. For instance, China Mobile recently granted 5G contracts which were worth around $5.2 billion and almost 90% of the work was given to Chinese vendors ZTE and Huawei.
Given the increased demand for bandwidth, Huawei’s vice president Victor Zhang said that the fastest possible way to ensure better coverage would be through the use of 5G.
“We need to accelerate the network bandwidth… to make sure everyone can work and can entertain and can share information,” said Mr. Zhang, adding that the existing mobile broadband coverage needs to be improved in order to support people who are working from home.
He said that despite this demand, “[We must] consider the health and safety issue, especially for protecting our employees and our partners.”
Prior to the outbreak of the virus, Huawei was somewhat of a controversial player in Europe’s market for 5G infrastructure. This is due to the Trump Administration’s accusations of cyber-espionage against them which has caused many European countries to explore other options or work with Huawei at the risk of causing tensions between them and the US to grow.
In the UK, for instance, they decided to work with Huawei but to an extent by offering them a limited role in their 5G rollout. France and Germany seemed to have had a similar standpoint on the issue; however, there was a lot of pressure at the time not only from the US, but also from those who supported a ban in the UK.
At the beginning of 2020, the UK decided to allow Huawei to supply them with just over a third of their 5G infrastructure, but this excluded some of the sensitive “core” parts of the network. Following this, European countries seemed to follow suit.
Belgian vendor, Proximus, said that it plans to invest less than initially anticipated on 5G infrastructure due to the impact the virus may have on the company’s profits. It also seems that 5G spectrum auctions have been delayed across several European countries and it would indeed be very difficult for them to maintain planning, as the consequences of the pandemic have been unprecedented so far.
Telia Sweden has been preparing to take a hit so it has now cut dividends. Portuguese incumbents MEO, NOS and Vodafone Portugal are yet to receive frequency rights in a variety of bands.
In terms of the US, it seems that they may also face a delay in 5G rollouts. The US now suffers more than Italy as the country with the highest number of COVID-19 cases.