Market trends

5G supports the frontline in fighting COVID-19

AlphaSense

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April 13, 2020


Solar technology with coronavirus molecules.
Solar technology with coronavirus molecules.

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No, 5G is not tied to the spread of COVID-19. However, it is critical in supporting the fight against the novel Coronavirus.

Telecom infrastructure is not only enabling facetime calls, zoom meetings, and Instagram scrolling, but also telehealth visits, pop-up hospitals, and testing centers. Now, national and local governments see why 5G matters: time and speed. Every second saved seeing a patient, or delivering x-ray results, translates to increased capacity for healthcare systems. So will 5G’s new support role in the pandemic hasten its adoption, or will it continue to be a pipe dream? See our takeaways from market chatter below:

 

Takeaways:

  • 1&1 Drillisch, a primary European telecom provider, has delayed the construction of their 5G mobile networks
  • 5G spectrum auctions have been delayed in Austria, France, Spain, Portugal, and the United States
  • 3GPP, the global body that prepares protocols for wireless technologies, is delaying the establishment of 5G standards
  • The FCC temporarily granted Verizon and T-Mobile more access to the 600 MHZ spectrum band to better serve customers during the pandemic

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Here are the highlights. [Note: We update this post and our compilation post to reflect the most recent commentary. Last updated 4/13]

Cradlepoint PR (4/9)

We are thankful that our wireless network solutions play a role in a wide range of COVID-19 emergency pop-up sites for healthcare, public safety, and other frontline responder use cases,” said Todd Krautkremer, Chief Marketing Officer at Cradlepoint. “As the response moves from testing to treatment, more powerful pop-up and remote access networks will be required to support higher-traffic volumes, patient internet access, enterprise-class security, and non-stop availability. The new E300 Series, part of our NetCloud Service, is ideally suited to address these heightened requirements with the rapid, zero-touch deployment and centralized management that IT teams need today.”

Ericsson Press Release (4/9)

In the following month, the Zhejiang Mobile Provincial Group began work on five new hospitals to serve as fixed-point diagnosis and treatment institutions for patients with confirmed cases of COVID-19. In addition, Ericsson teams were tasked with establishing high-speed, 5G mobile connectivity to support the hospital’s critical mission.

EXFO Q2 2020 Earnings Call (4/7)

Q: And then my last question is, update us on what the U.S. carriers are doing concerning 5G deployment? Has that come to a complete halt, and COVID needs to get out of the way before network deployments start again. So update us on what you’re hearing from your carrier customers regarding their 5G deployment plans?
A: Yes. So Todd, I mean, we engage customers. It varies by customers, right, operators, and you made specifically on Americas. But we are — that’s part of our constant engagement and dialogue. We have to understand better what will happen as the exit; they call it pandemic in terms of investment. There are needs now for bandwidth growth. So they are looking at investment there. On the 5G side, I think it’s still too early to say if they’re going to increase or delay. In certain other countries, in Europe, we’ve seen some of the spectrum auctions waited as the countries have to deal with the virus. So we’re going to — this is part of the discussions we’re having and dialogues we’re having with our customers to understand how better — once we emerge out of the crisis, how the investments and where are the priorities going to be?

Putian Communications Group Annual Report (4/1)

In early 2020, the coronavirus outbreak strongly affected China’s steady economic development plan. Relevant reports indicate that China will continue to lead the development of 5G industries under the epidemic. Under this coronavirus outbreak, 5G with “large bandwidth, low latency, wide connection” characteristics played an essential role in the epidemic prevention and control, which enhanced the PRC government’s management efficiency and capacity.

Ceragon Networks 20F (3/31)

We have expected that 5G-related design wins will likely produce orders in the first half of 2020, with the related ramp in revenue estimated to begin during the second half. However, the Coronavirus (COVID-19) outbreak would most likely postpone the transitioning into 5G technologies in addition to the fact that even before such an attack, the scope and timelines of the 5G rollout were uncertain and may be further delayed for reasons beyond our control.

1&1 Drillisch Press Release (3/30)

The German operator United Internet, Ralph Dommermuth, said that 1&1 Drillisch would delay the construction of its new 5G mobile network due to the Covid-19 crisis, Handelsblatt reports.

Asia Tele-net and Technology Annual Report (3/28)

The idea that 5G will drive more device sales is still up for debate. 5G smartphone sales were below expectations in 2019 due to two significant reasons: 5G network coverage and particular 5G app availability are still limited. Nevertheless, Gartner predicts that 5G devices will account for 12% of all mobile phone shipments in 2020 as handset makers make their devices “5G ready,” with the proportion increasing to43% by 2022. So why launch of the new 5G devices matters to us? It matters as it shall mean orders from mobile brand holders to our customers and hence investment in electroplating equipment. So far, only China has put up a statement confirming that they will not delay the implementation of the 5G network. However, we do expect delays in other countries. As such, whether our Group will be benefited from the launch of 5G is still a big unknown.

Leoch International Technology Annual Report (3/27)

According to the consensus of various analysts covering the telecom sector before the outbreak of the pandemic earlier this year, China would put in a total between 600,000 to 800,000 stand-alone (SA) macro base stations during 2020, possibly with the combination of various micro-cells, Pico, Femto, and large scale antennas systems (LSAS) which collectively weight a much heavier loading on-demand on the back-up power system and creates a promising outlook for the battery sector players. However, such estimation was scaled down to 500,000-600,000 recently after telecom operators in China substantially reduced their 2020 capital expenditure on 5G infrastructure after the outbreak of COVID-19.

UTStarcom Holdings 6K (3/27)

We are dealing with slower-than-expected collections from our extensive customers in India, and the impact of the Coronavirus pandemic is likely to be significant. Furthermore, our outlook is more uncertain due to diminished 5G prospects in China. In light of these uncertainties, the Company and the board evaluate all strategic alternatives available to the Company.

Trilogy International Partners Q4 2019 Earnings call (3/25)

As we mentioned on our last call, the New Zealand government plans to allocate some 3.5 spectra for early access commercial use from mid-2020 and late 2022. However, while there has been a lot of 5G buzz in New Zealand and across the world, the business case for 5G has largely been aspirational and marketing-based to date as 5G-capable handsets are not prevalent in the market. Further, the COVID-19 virus may constrain the manufacturing of 5G network equipment and terminal devices. Given these constraints, our 5G strategy contemplates making targeted investments and using our 3.5 spectra in collaboration with local innovators and institutions to incubate 5G use cases that will truly benefit consumers and the enterprise.

Hengxin Technology Annual Report (3/25)

Although the U.S.-China “Phase 1” trade agreement has been concluded, the economic and trade relations between the United States and China will remain obscure, coupled with the rising protectionism in international business and the impact of COVID-19, thereby overshadowing China’s exports. However, formal commercialization of 5G technology undoubtedly highlights the development of the telecommunications industry in the PRC, as the government has put forward that 5G would be an essential avenue for expanding related investments and stimulating new consumer demands.

China Telecom Annual Report (3/24)

Technology and market forces are the twin wheels propelling the nation’s information and communications industry to a vast and bright future. At the same time, we face new challenges in the dynamic global situation and landscape, with economies of scale for the 5G industry yet to emerge. In addition, the outbreak of the coronavirus epidemic since the beginning of 2020 has impacted the business development and network construction of the Company. China Telecom has proactively fulfilled its corporate social responsibility and was the first Company to complete 5G network deployment for the Wuhan Huoshenshan Hospital and other locations.

Marvell Technology Group 10K (3/23)

Markets for 5G infrastructure may not develop in the manner or in the periods we anticipate. If domestic and global economic conditions worsen, particularly in light of the impacts of Novel Coronavirus (COVID-19) and the potential global recession resulting from that place, overall spending on 5G infrastructure may be reduced, adversely impacting demand for our products in these markets.

China Unicom Annual Report (3/23)

Looking forward to 2020, although the Company continues to face the impact of high saturation of the traditional market, adverse effects brought by fierce market competition and “Speed Upgrade and Tariff Reduction,” as well as new challenges such as the increase in capital expenditure and operating expenses arising from 5G deployment and the impact of the outbreak of COVID-19, the Company remains confident in actively responding to the challenges through grasping the valuable opportunities resulting from technological development and industry reform, committing to the strategy of focus, innovation, and cooperation and firmly promoting the comprehensive Internet-oriented operation.

Pipehawk Interim Report (3/19)

The order book looked very strong with the upturn in Defence, Telecomms 5G, and SSEN, plus infrastructure renewal; however, Coronavirus is now impacting our ability to deliver to the site, and it is too early to quantify the impact Covid-19 will have on Adien.

T-Mobile 8K (3/18)

We recognize that T-Mobile customers rely on our network to ensure they have critical connections with family, loved ones, and emergency service providers. So we announced agreements with multiple spectrum holders for an additional 600 MHz spectrum for the next 60 days, expanding network capacity for customers across the country. We’re also expanding roaming access for Sprint customers to use the T-Mobile network.

O-Net Technologies Annual Report (3/17)

Major telecommunication operators have indicated that they will begin significant investments in 5G infrastructure, with Japan and Korea leading the way. Despite the recent COVID-19 outbreak, it is still expected that, unlike previous iterations, the 5G investment cycle will start in Asia with signs that major Chinese operators may roll out deployments in 2020. Moreover, unlike the 4G cycle, the 5G cycle is likely to happen more gradually and over a more extended period, improving the Group’s visibility into future demand. For example, while China may deploy 5G as early as 2020, this will likely only be available in tier-1 cities, while tier-2 and tier-3 towns may not have 5G for many years to come.

Inseego Corp Q4 2019 Earnings call (4/20)

Lastly, I want to mention one other aspect of the coronavirus situation. We’ve seen a sudden increase in demand from several carriers and shell customers for our products. This increase is driven by many businesses mandating work-from-home policies due to the outbreak, and they want MiFi, secured and reliable connectivity for remote employees. We are working with our contract manufacturer, Foxconn, to fulfill this upside demand.

Ice Electronics Corp Annual Meeting (3/11)

But now, with this 5G rollout and as it intersects with this COVID-19 crisis, there may be some constraints for some of the passive and discrete components that we had some challenges with, say, a year ago. And like I say, it’s not an immediate issue, but we foresee talking to our channel partners that these two events combined could impact future availability.

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