How has the pandemic impacted use cases (especially in healthcare), infrastructure and mobile device supply chain?
The global pandemic that started with the outbreak of the COVID-19 virus has created a massive impact on stock markets and the financial performance of even the largest global companies and caused consumers great concern.
As a result, consumers are limiting their spending, which is now affecting smartphone sales. According to Research Director Dimitris Mavrakis, ABI Research expects that handset sales may drop by 30% Year-on-Year (YOY) in the first half of 2020, meaning that the smartphone supply chain will likely be seriously affected.
“This will likely have a cascading effect in the telecoms market, where giants like Apple, Huawei, and Samsung will see revenues stagnating, at least in the first half of the year,” said Mavrakis in an ABI Insights report.
On the other hand, he pointed out, consumer telecom networks are currently coping under the increased stress of most employees working from home. Operators around the world have shared statistics that follow an almost uniform composition: fixed broadband traffic is increasing (some cases by more than 50% daily), Wi-Fi calling is also increasing (sometimes as high as 80% daily), and so are mobile calls.
“However, no mobile operator is reporting statistics regarding 4G and 5G networks, which will have likely declined as most subscribers are in self-isolation and most likely use their home broadband for most communications,” said Mavrakis. “Moreover, the lack of general availability of skilled installation technicians will also mean that aggressive 5G deployment plans will likely be slowed down.”
“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,” explained Jiancao Hou, Senior Analyst at ABI Research.
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.
Mavrakis is of the opinion that, despite the global reach of the pandemic, the telecoms supply chain — including both mobile infrastructure and devices — has proven to be robust and well-shielded to face this challenge. “Any mobile operator that has aggressive plans to deploy 5G will not be faced with equipment shortages, since Tier-1 equipment providers (Ericsson, Huawei, and Nokia) have diversified their supply chains and have manufacturing plan redundancy to face regional lockdowns.”
While the current situation is likely to put a strain on the financial position of all infrastructure vendors, they should be able to endure the short-term effects, assuming they were in a healthy financial position before the outbreak.
The effects of the virus outbreak will likely accelerate more innovative use cases and services of 5G in some enterprise verticals, especially healthcare. In fact, early 5G deployments in China is a sign that that the technology could be pivotal in addressing the increased communication requirements of temporary hospitals and other infrastructure to combat the pandemic crisis.
“In the longer term, while 5G’s momentum will be slowed, new use cases will emerge,” said Hou. “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.”
Mavrakis concludes that, while many questions concerning 5G deployment cannot yet be answered, the pandemic will certainly illustrate the vital importance of mobile networks and 5G for both consumer and enterprise use cases.
