Telecoms to go ahead with 5G in spite of COVID setbacks

Telecoms to go ahead with 5G in spite of COVID setbacks

In this recent first quarter (Q1), three major U.S. telecom companies — AT&T, T-Mobile and Verizon — stated that they are confident in their efforts to continue 5G deployment throughout the country, despite disruptions from the COVID-19 pandemic.

There are however warnings that momentum could slow down, as some cities will require more time to approve infrastructure such as small cells, as well as other necessary permits and changes.

Our 5G deployment continues, although we continue to navigate workforce and permitting delays,” AT&T CEO Randall Stephenson said on the company’s most recent earnings call. He said AT&T has “no intention of slowing down on 5G and fiber deployment and such, [but the] reality is that a lot of it is not in our control.”

With a great number of city employees working remotely in order to mitigate the spread of infection, zoning and permitting offices are either closed or unable to process approvals as some still rely on paper engineering plans. Crews may also be unavailable to install the infrastructure once it is approved, due to social distancing and other time constraints.

While there still is intent to deploy 5G, the ability to deploy it may be hindered in some cases,” Dan Hays, principal at PricewaterhouseCoopers (PwC), told Smart Cities Dive. “There could be a delay of around six months in the ramp-up of 5G, depending on how long those difficulties remain”, Hays said.

T-Mobile remains strong-willed with its intention to fulfil its promise of a truly nationwide network. Their newly-appointed president and CEO, Mike Sievert said on the company’s most recent earnings call, the integration of the spectrum it acquired in merging with Sprint will be key in “putting us on our path to build the world’s best 5G network.” 

Meanwhile, Verizon Chairman and CEO Hans Vestberg said in its Q1 earnings call that the company is “on plan” with 5G and fiber deployment, though he offered limited detail. The company did make big financial commitment to support that deployment, however, given its latest 10-Q filing with the Securities and Exchange Commission (SEC) it anticipates capital spending between $17.5 billion and $18.5 billion this year. This includes spending on 5G.

Telecoms may benefit if the coronavirus keeps people working from home for a longer time, according to Hays, as it may enhance the demand for fixed home broadband — one of the initial test cases for 5G. Former T-Mobile CEO John Legere also promised high-speed 5G home internet last year, pending the company’s successful merger with Sprint.

In paperwork filed with the SEC, all three telecoms warned of the possible adverse effects of the coronavirus on business. Depending on how long its effects last, they all warned in recent 10-Q filings of the potential to cut revenues, which could then affect spending on the business and associated projects.

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Stimulus funding for telecommunications has thus far been limited to spending to support telehealth, in addition to existing funds from the Federal Communications Commission (FCC) to spur rural 5G deployment. Future packages may include further support.

There are signs that some Americans are still skeptical of 5G. Over 85% of Americans are familiar with 5G, but only 23% said they would consider switching their internet or mobile provider this year to have 5G, while 30% said they would not.

Other recent findings point to more optimistic signs for operators. GSMA’s 2020 report on the state of the global mobile economy showed 60% of North American consumers are willing to pay extra for 5G coverage, though coronavirus could slow the release of 5G-ready devices.

Despite all the hype that the mobile industry has put around 5G, we still have yet to see significant consumer demand or a meaningful set of mobile devices that would motivate consumers to adopt 5G,” Hays warned.

And amid promises made by telecom companies regarding 5G’s role in bridging the digital divide, some are yet to be convinced. Federal Communications Commission (FCC) Commissioner Jessica Rosenworcel said during a webinar in early April that policymakers should help it be spread beyond heavily populated areas and out into more rural and suburban areas too.

Over time we’re going to have to figure out how that technology is just not limited to wealthy urban centers, we’ve got to figure out how we use other spectrum bands and change policies to make sure that it reaches more people and more places so those innovations are not just limited to our urban corridors, but can reach everyone,” Rosenworcel said.