Coronavirus and conspiracies: has the 5G market taken a hit?

Coronavirus and conspiracies: has the 5G market taken a hit?

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In an unexpected twist in the coronavirus saga that couldn’t have been predicted mere months ago, conspiracy theories linking 5G to the outbreak are spreading rapidly.

The baseless theory that originated in January claims that 5G towers transmit radiation that weakens immune systems, helping to spread the virus.

With China delivering one of the first and largest commercial launches in November 2019, the rumours were able to pick up speed. 

The theory continued to gain popularity, as the fake news was spread on social media groups and by celebrities with millions of followers, including Hollywood stars Woody Harrelson and John Cusack, singer Keri Hilson and rap artist Wiz Khalifa. 

Despite the conspiracy being completely unfounded, incidents of phone masts being vandalised and engineers harassed have been reported.

How has the coronavirus outbreak affected the 5G market?

5G is known to allow greater and faster data processing. The new wireless communication technology is seen as an integral part of digital transformation strategies and interconnected technologies in various industries. 

Before the outbreak, a number of countries looked to adopt 5G wireless communications technology. The rollout in Singapore was estimated to reach 50% coverage by 2023. This is much slower than 4G rollout, which could be explained by a lack of revenue opportunities in the consumer space. 

The pandemic could lead to slower rollouts for 5G with market analysts at Frost & Sullivan predicting a possible slow down in rollout schedules.

Miss Mei Lee Quah, Associate Director of Telecoms and Payments Strategy at Frost & Sullivan, said: “The coronavirus outbreak highlights the urgent need for upgrading digital infrastructure and for deploying 5G networks.”

But the highly anticipated transition from 5G New Radio Non-Standalone to a Standalone mode may also be delayed. A Standalone mode will eventually allow 5G to be used for both signaling and information transfer rather than relying on existing LTE networks.

Miss Quah added: “In some places where it makes economic sense, the outbreak has actually driven the market for fixed wireless access, although the bulk of the solutions are still on 4G rather than on 5G.”

Investments in 5G NR infrastructure had been ramping up, while spending in 4G LTE infrastructure had been slowing down. 

But in the midst of the coronavirus outbreak, Miss Quah noticed mobile operators increasing spending on 4G LTE to support the increase in work from home and online arrangements, leading to a significant increase in the use of high-speed broadband for media and entertainment at home.

Sachin Mittal, the Head of Telecom, Media & Technology Research at DBS Bank, predicts that the outbreak’s impact could linger with a 10% decline in mobile revenues.

Research firm Strategy Analytics also lowered its forecast on global 5G smartphone shipments to 199 million from 250 million in the first quarter. The reason given was the virus had taken a toll on the worldwide semiconductor market, which especially goes into smartphones.

Smartphone giants Huawei, Samsung, and Apple are also experiencing a slowdown in the production of their 5G products.

For consumers, the China Academy of Information and Communications Technology announced a 56% drop in smartphone sales in February 2020 compared to 2019

It is unknown as of yet how the conspiracy theories could affect the 5G market, but other than some repair works to phone masts, the damage could be minimal. 

The need for 5G will continue

Despite the conspiracies and slowdowns, some countries are pushing for 5G to support the healthcare industry, much like data centers and cloud services. 

Miss Quah said: “The coronavirus outbreak will have a short term impact on 5G.”

The healthcare industry could drive early 5G adoption, but more innovative use cases will be dependent on releases 16 and 17 expected in 2020 and 2021.

She added: “Demand for 5G is expected to pick up again once the critical stage of the outbreak is over and countries are able to flatten the curve of new infections.”

In her conversations with mobile operators, vendors, and end-user companies, Miss Quah found the majority to agree that there is a clear need for 5G in their industry ecosystem.

What are the challenges in driving 5G adoption?

Miss Quah found that mobile operators’ and vendors’ biggest challenge with driving 5G adoption is the lack of sufficient industry partnerships to build solutions that capitalise on 5G. She noted that some are heading in the right direction by seeking out a deeper understanding of end-user needs.

For end-user companies within vertical industries, they are currently struggling to come up with innovative ideas that can unlock the potential of 5G. It can be difficult to find suitable best practice strategies since we are still at the early stages of 5G with few benchmarks available.

Knowledge sharing, building industry partnerships, and greater funding for innovation may help overcome these challenges.

But these barriers in no way indicate that 5G will not work.

On the contrary, Miss Quah said: “I envision that 5G will eventually drive the much anticipated innovative end to end services that have the potential to transform the world as we know it.”

Want more 5G insights?

Join 5G market and investment expert Sachin Mittal from DBS Bank at our first free digital event, ‘Inside Asia – Technology & Market Next Moves’, on 30 April at 11 am SGT.

You will get the chance to connect with a whole host of industry experts along with peers from across the world to explore the current state of the industry and future investment opportunities in 5G, data centers, cloud services, and more.

Watch Inside Asia – Technology & Market Next Moves on demand.

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Stuart Crowley

Editor, W.Media

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