5G-aliser – June 2020 update: Geopolitics continues to dominate discussion, as coronavirus strains

Once again, it is the ongoing geopolitical clash between China and the US that takes centre stage this month, with the fallout of last month’s sanctions shaking up the industry and potentially redefining Huawei’s 5G position in multiple international markets.

This month’s sustained intensity in the geopolitical arena are somewhat contrasted by the steady development in a number of key drivers. For many countries, the healthcare impact of the coronavirus is beginning to wane, hinting at a slow return to normality; for the operators, the financial uncertainty may soon begin to fade, with some governments pushing 5G as a major driver of economic rejuvenation.

Wildcard impact

  • The trade war between China and the US, naturally, is having far reaching ramifications for 5G. US sanctions against Chinese companies are threatening a major shift in the superconductor supply chain, which is already having significant knock-on effects for a variety of industries and economies.
  • COVID-19’s impact on 5G continues to be fragmented from country to country. Many countries around the world are positioning 5G as driver for economic recovery post-pandemic and are thus attempting to accelerate their rollout strategies. For others, the virus has caused considerable delays, whether it be to the rollouts, R&D, or spectrum auctions.
  • 5G conspiracy theories, while still regrettably prevalent, are becoming less prominent. Regulatory authorities have begun to take the issue a little more seriously, with various attempts by the telecoms community to mitigate misinformation.

 

Growing prominence

  • OpenRAN continues to go from strength to strength. Altiostar and Mavenir are collaborating on radio units in the US with newcomer DISH, with many greenfield operators (Jio, Rakuten, Drillish1-1, etc) increasingly pursuing the technology. With tensions between China and the US continuing to intensify,  O-RAN technology is increasingly positioned as a possible solution to China’s tech dominance, and this is also being strongly considered in Europe. Sign up for STL Partners’ webinar on what telcos should do about Open RAN on August 4th here.
  • Private 5G networks are similarly continuing to develop, becoming more and more feasible for major industries. In June Ford became the first player in the automotive industry to sign up for a private 5G network in the UK.
  • Indoor coverage and MmWave research, is heating up, with an upsurge in companies exploring this technology.

Steady as she goes

  • When it comes to edge technology, there has been little developments this month, but there are indicators that suggest we could see some major developments in the near future; hyperscale cloud providers, as well as property companies, are strongly supporting the development of edge computing tech. (See STL Partners’ recent webinar on edge computing investment strategies for more detail.) This may not necessarily affect 5G networks, however, since in this case the edge will not be part of the networks’ infrastructure, but rather functioning as an end customer service. Nonetheless, hyperscalers and companies like HPE are increasingly targeting telcos as customers, with edge computing being a key area of interest.
  • 5G device availability continues to grow steadily as expected – naturally, this factor will rise much more sharply as 5G coverage expands beyond the typically limited deployments currently seen in most markets. Apple continues to delay the launch of its iPhone 12, which is now expected in Q4.
  • Research into indoor 5G coverage also gradually improving, but true indoor 5G still seems some way off.

 

Keep an eye on…

  • Government 5G policy is having a huge impact on 5G development right now, whether in the form of restricting vendors or incentivising certain developments, such as smart cities. July should see some major updates in government policy, making this factor definitely one to focus on for the coming month.
  • After a lengthy delay, 3GPP Release 16 was finally published a few days ago, introducing a host of new 5G concepts, including NR-Unlicensed, integrated access backhaul (IAB), and time sensitive networking (TSN). These new capabilities are sure to result in a wide range of interest from the telecoms sphere, with the next few months sure to serve as a fascinating testing period.

 

Supply and Demand

In conclusion, the month of June has had few groundbreaking developments in the world of 5G, but rather represents a continued slow positive growth in both areas. When it comes to supply and demand, both have seen a small up-tick when calculated by STL Partners: supply has risen from 13% to 15%, while demand is also beginning to climb, up to 9% from a low of 3% back in April.

With telcos beginning to better understand the economic impact of the coronavirus and uncertainty surrounding the viability of their 5G strategies, the conservatism of the past few months is beginning to fade. Is optimism returning to the world of 5G?

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