COVID-19 to delay 5G rollout with huge cost to the industry

The commercial rollout of fifth-generation broadband (5G) will be delayed by the COVID-19 pandemic at an enormous cost to the industry, according to 3GPP.

3GPP, the body tasked with standardising 5G technology for industrial usage, said its operations had been heavily impacted by the crisis.

In a formal announcement this week, the firm said it would defer its standardisation work until at least June 2020, making a 5G rollout in the industrial sector unlikely before 2022.

Industrial enterprises are a substantial revenue stream for the 5G industry. With most industrial firms looking to upgrade their communication technology in 2021 — regardless of whether 5G is available — the deferral could cost the 5G industry 25% of its revenue opportunities within that sector, for the year. This translates to a staggering 10% of its overall revenue.

A paper by ABI Research said this loss will create a major shortfall in GDP contribution; and a several billion (US) dollar dent in the global economy.

However, it isn’t all doom and gloom for the 5G industry, with other promising use cases and revenue streams still intact, some of which may even be enhanced by the COVID-19 crisis.

A Principal Analyst at ABI Research, Leo Gergs, said he expects to see growing demand for 5G technology from the agricultural sector — an industry which doesn’t rely on the standardisation work by 3GPP.

“[COVID-19] is a blow to the standards bodies and the timeline of 5G,” Gergs said.

“However, we will also see 5G applications for life-critical verticals, such as agriculture and food production, pick up pace.

“[Additionally], a growing number of countries will consider enhancing their healthcare sector with 5G-enabled capabilities. The telco ecosystem must prepare for this shift.”

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