That telecoms and 5G will benefit from the current pandemic is – ultimately – beyond doubt. What, perhaps, we did not reckon with was that massive increases in usage would have an adverse effect on the telecoms sector, as costs surged to keep up with the increased demand.
Yet already there are reports, statistics and charts emerging that suggest that telcos have responded quickly, and well, to the new demands.
This will, in time, translate into increased revenues. Apparently.
This does not mean that the tough times will not continue for a while. As the quote from the Best Exotic Marigold Hotel has it, ‘everything will be alright in the end, and if it is not alright, it is not the end.’
It may well be that 5G is the thing that does make it alright in the end.
While Strategy Analytics believes that the inevitable recession and loss of roaming revenues (which were lost already, by the way) will hit telecoms hard over the next 12 months, by 2023, they will bounce back and, if the trend of working from home ‘where possible’ continues, surge.
It seems clear that 5G will benefit, or at least come to the aid of the party, as the technology whose time has come and whose profile fits the new normal will prevail. Gaming, video conferencing, augmented reality apps and even amazing new forms of advertising all fit the profile well.
Telcos have acknowledged this as their investment plans for 5G this year and next have been revised. This year, investment will reduce slightly, presumably in order to cope with the fire fighting that is needed now. Next year, however, investment forecasts suggest an increase of $2 billion, to $23 billion, according to Analysys Mason. This does not include the huge investments in innovative digital platforms.
The ultimate question remains, however. While telcos might well increase their investment in 5G in the next year or so, who will be the real beneficiaries?
When 5G is unleashed on the consumer market, will it, once again, be the digital service providers who benefit most. And the answer has to be, given current evidence, yes.
5G will benefit from the current situation. Graphs and charts will show increased investment, increased take-up and increased use of a new range of apps. But will telcos own revenues increase in line with the take-up, as Strategy Analytics suggests?
Yes, but only if they figure out what people are going to do with the technology now, and work out profitable partnerships from there.