The COVID-19 pandemic has forced a delay in the crucial standardization work that would make 5G available for enterprise use cases. The relevant standardization body, 3GPP, has formally announced a deferral of this standardization until at least June 2020, which would delay commercial rollout of industrial 5G until at least 2022. Given that most industrial enterprises are looking to upgrade their communication technology in 2021, this delay will result in 5G missing out on at least 25% of the revenue opportunities within industrial enterprises, which given the importance of industrial use cases for overall 5G revenues, this translates into 5G losing up to 10% of total 5G revenues. In the long-run, this could result in a shortfall of several U.S. billion dollars in contribution to the global economy, states global tech market advisory firm, ABI Research.
“This is a blow to the standards bodies and the timeline of 5G,” says Leo Gergs, Principal Analyst at ABI Research. “The cancellation of leading industry events, such as Mobile World Congress in Barcelona, caused more complicated workflows for the 3GPP. As a result, the freeze of Release 16 (which is of key importance for 5G applications in industrial and logistics environments) has been delayed until June. This would, in turn, push the rollout of 5G into warehouses, shipping ports, and factory floors until at least 2022.”
Even though, in the short-term, this current pandemic is putting the timely enterprise rollout of 5G at risk (due to the delay in standardization framework), in the long-term, enterprise verticals will consider 5G for automating workflows in factories and other industrial environments in order to keep supply chain disruptions at a minimum. “However, we will also see 5G applications for life-critical verticals, such as agriculture/food production, to pick up pace, while a growing number of countries will consider enhancing their healthcare sector with 5G-enabled capabilities,” Gergs points out.
Situations like these underline the importance of a technologically up-to-date healthcare system, as well as more automation in factories and production outlets. However, the current situation around COVID-19 will most probably induce a shift in the verticals that investigate 5G deployment. “While it puts 5G applications in industrial surroundings in a difficult position, current experiences will ignite considerations for 5G applications in healthcare and agriculture/food production. The telco ecosystem must prepare for this shift,” Gergs recommends.
For a clearer picture of the current and future ramifications of COVID-19 across technologies and verticals, including 5G Markets, download the whitepaper Taking Stock of COVID-19: The Short- and Long-Term Ramifications on Technology and End Markets.
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