Illustration: Sarah Grillo/Axios
Coronavirus-related economic disruption and uncertainty could yet slow the pace of 5G deployment in the U.S. — but for now, the major carriers say they're moving full speed ahead.
Why it matters: The pandemic has highlighted the importance of connectivity as businesses shift to remote work and schools move classes online, making network performance more vital than ever.
What's happening: The major wireless carriers say the coronavirus has not altered the pace of their 5G rollouts, but industry observers and federal officials question how long that will remain true.
- "As a logical matter, I would expect a slowdown," said former Federal Communications Commission official Blair Levin, now a policy adviser for New Street Research.
- Levin cited concerns about construction crew members working close to each other; disruptions to supply chains; and consumers' ability and willingness to pay for pricey 5G plans and new phones amid staggering unemployment rates.
- Companies may say they're moving ahead, Levin said, "but we’re really early into it, and the notion that consumers are going to pay a premium in an economic downturn is counterintuitive to me."
There may also be fewer 5G-ready devices as a result of the pandemic.
- Only a tiny fraction of the phones bought last year supported 5G networks. This year, most new high-end phones were (and still are) expected to support 5G. But with fewer people buying new phones amid the pandemic, that could still mean fewer 5G-ready devices this year.
- The big wild card is Apple. The company had been gearing up to launch a 5G phone this year, but things could yet change, says industry consultant Chetan Sharma. The largely Chinese-based supply chain should be ready for the usual fall launch, but Sharma said Apple might decide to delay things if it doesn't see a big enough market for a 5G-capable iPhone.
FCC Commissioner Jessica Rosenworcel said she's pleased that U.S. carriers are moving forward with their 5G plans right now.
- "But we need to keep in mind that a mix of factors — delayed standards, deferred [airwaves] auctions, and supply chain issues — could slow this in the future," Rosenworcel said in a statement. "Still, for the long haul I’m optimistic because this crisis is accelerating the digitization of everything and we are counting on connectivity for so much more in modern life."
- The FCC pushed back the start of an upcoming wireless spectrum auction to July due to the pandemic.
What they're saying: The carriers insist it's business as usual for their 5G plans.
- AT&T noted that federal guidelines have identified telecom workers as essential, and the company is on track with its plans to launch 5G nationwide before July. "We’re still marching down the path we’ve been talking about," AT&T's Scott Mair, president of technology & operations, told Axios.
- T-Mobile and Verizon both said they are moving ahead with 5G build plans, with Verizon recently projecting that it will spend up to $500 million more on capital expenditures this year than originally anticipated.
- "They’re just plugging along with the deployment schedules," said wireless analyst Roger Entner. "I think this crisis shows how important telecommunications is."
Between the lines: Some carriers may be in a better position than others to keep moving forward. Sharma noted that for T-Mobile, for example, only a software update is required to add support for Sprint's mid-band 2.5GHz spectrum.
- Many of the carriers, he said, are trying to get masks and other protection gear to ensure workers can continue installing new equipment where needed.
- Where things could get slow, Sharma said, is in places where operators need to add new cell sites, given those typically require city approval, which could be harder to get during the shutdown.
Yes, but: The picture is more mixed internationally.
- China is already home to most of the world's 5G subscribers and remains an early adopter of the technology.
- Japan and South Korea were also among the first to launch 5G networks, although a Reuters report suggests that the pandemic has dimmed consumer interest in Korea.
- Europe was already largely behind in 5G adoption and, with a number of countries hard hit by the virus, the crisis could further delay the rollout there.