Covid-19 lockdown and Future of 5G Market

By - Nishant Pawar

Covid-19 outbreak has impacted the world economy drastically. According to the United Nations, global economic growth could shrink upto 1% from the previous forecast of 2.5%. This will lead to supply chain disruptions, job losses, and a global economic slowdown. Millions of workers face the possibility of losing their jobs. Governments are proposing and introducing massive stimulus packages to avoid a sharp decline in their economies that could plunge the global economy into a deep recession.

Most countries have declared lockdown or are on the verge due to the fear of spreading the virus. In the past month, nearly 100 countries have declared lockdown. The internet has become a central part of their information flow and entertainment consumption for the people during the lockdown period. In other words, when millions of people are using Netflix, TikTok, Zoom call, Fortnite, or Twitter, the data speed is affected tremendously.

DEMAND FOR DATA SPEED

The reduced traffic on the streets has risen traffic on the internet, causing data rates to decrease according to Ookla. In the case of the United States, the mean broadband speed fell from around 140Mbps starting March 9th week to around 133Mbps starting March 16th week. Canada also experienced a decrease in broadband speeds during the same period, from around 129Mbps to 121Mbps. Mobile broadband download speeds declined in January in many Asian countries, though fixed broadband has fared much better.

5G DEVELOPMENT: CHINA, JAPAN, TAIWAN & VIETNAM

China:

  • China is looking forward to recovering its economy by using 5G networks. According to Xinhua, the government’s mouthpiece, President Xi urged the speedy construction of 5G networks and data centers as a priority to rejuvenate the country’s economy.
  • CITIC Holdings Co Ltd teamed up with Konka Group Co Ltd, a leading manufacturer of consumer electronic products, to jointly launch an Rmb1 billion (US$145 million) fund that will focus on the 5G technology sector.
  • In June last year, following the blacklisting of Huawei by the US, China United Network Communications Group Co Ltd, one of the largest mobile network services providers in China, launched an Rmb10 billion, or US$1.4 billion, incubation fund for 5G.
  • Alibaba, through its chip-making subsidiary, successfully developed its maiden self-designed microprocessor that can be applied in a broad range of areas, including 5G technology.

JAPAN

  • NTT Docomo, KDDI, and SoftBank will be the first operator to bring the 5G mobile network into the market in Japan.
  • SoftBank has announced plans to charge an extra 1000 yen ($9) a month for 5G but will exclude current and new customers for two years under a promotional drive running through August.
  • Consumers would need to buy new 5G-capable handsets. Sony Corp and Sharp Corp have recently released their first versions of 5G smartphones.
  • SoftBank will have 5G smartphones from four manufacturers: ZTE Corp, Sharp, and Oppo Co. in China, and LG Electronics Inc. in South Korea.

TAIWAN

  • Taiwan is one of the important countries when it comes to 5G technology.
  • Taiwanese telecom operator Far EasTone (FET) has selected Ericsson as its 5G Radio Access Network (RAN) provider in an arrangement that will cover all FET spectrum assets in low, medium, and high bands. The first commercial 5G services the company will deliver will be in the 3.5 GHz band.
  • Though Taiwan’s Chunghwa Telecom has decided to split its 5G rollout network between Ericsson and Nokia. The central and southern area of the country, claimed by China but self-governed since the People’s Republic was founded in 1949, will be equipped by Nokia.
  • Recently, a consortium led by Taiwan’s National Development Fund, Executive Yuan, and its affiliate, Taiwania Capital Management Corp, participated in the latest US$19.3 million funding round of the Taiwan-based Metanoia Communications Inc. Metanoia manufactures high-speed chipsets for the wireline broadband market. The capital injected into the company would help it to develop new 5G chips and drive its global expansion.

OPPORTUNITIES

5G ROBOTS

In Wuhan, Huawei launched a 5G network in a specialist hospital. In essence, 5G-enabled robots will now assist in taking care of patients and take measures in minimizing the amount of time medical personnel needs to spend with infected patients. In addition, 5G is used by specialists to monitor medical equipment in remote centers around the world, enabling them to treat new cases remotely and assist local doctors.

WORK FROM HOME

The Internet has made work from home possible. The COVID-19 lockdown has created a need for work from home solutions. Virtual meetings, file sharing, work scheduling, are made possible through the Internet. Some of the activities, such as virtual meetings, require high data speed. 5G is expected to give a better user experience.

ENTERTAINMENT & SOCIAL INTERACTIONS

Aside from work and efficiency, 5G would also be the main component in entertaining and linking people. With minimal face-to-face social contact, and even stuck in various countries with friends and relatives, mobile internet access helps people to stay in touch with loved ones who otherwise would be lonely. It is also worth remembering that with sports and television shows being canceled or limited, people will be searching for new ways of entertaining themselves, and some of those could be provided by 5G.

 

CONCLUSION

Although the economy is showing signs of a slowdown, the need for data is growing. Even after the pandemic is contained, the demand for high speed network will continue as there will be a need for technology that increases efficiency.

According to an article by Harvard Business Review, titled “What Coronavirus could mean for the Global economy?” The article states the three broad scenarios in which the economy will recover, namely V, U & L. The most likely and plausible scenario is V & U, respectively, which suggests that the pandemic will cause slowdown, but recover without majorly affecting the economy structurally. This means that 5G technology will show growth trends in the long run.