05 May US providers remain mostly optimistic on 5G rollouts | Light Reading
While the COVID-19 pandemic could slow the rollout of 5G in countries around the world, most 5G players in the US argue that they remain on track with their network-buildout efforts.
The latest signal on the topic came from T-Mobile, which this week announced it remains on track to launch the “standalone” version of 5G this year. Specifically, the operator said it tested a variety of services on standalone 5G, including data and voice sessions with such vendors as Ericsson, Nokia, Cisco, Qualcomm and others.
T-Mobile isn’t alone in moving to the “standalone” version of 5G, which will allow operators to transmit 5G signals without the support of a 4G connection. For example, Telstra in Australia recently announced it switched on a new “cloud native” 5G core network with vendor Ericsson to handle new standalone 5G traffic.
But the fact that T-Mobile reiterated its plan to launch standalone 5G this year a goal it laid out in 2019 adds further momentum to the 5G push, at least in the US.
“We still plan to deliver nationwide 5G this summer,” wrote Scott Mair, president of AT&T’s networking operations, adding that the operator also still expects to virtualize 75% of its networking functions by the end of 2020, another of its networking targets.
“Addressing the COVID-19 [traffic] surge while staying on track with our long-term goals is only possible because we’ve spent years putting in place people and plans that can adapt, improvise and overcome any obstacle,” AT&T’s Mair argued.
Others echoed that same positive take on the topic.
“We haven’t seen any impact to date from COVID-19,” Crown Castle CEO Jay Brown said last week during his company’s quarterly conference call with analysts, when questioned whether the cell tower company’s small cell buildout had been affected by the pandemic.
“I don’t want to say that I have perfect visibility to what that’s going to look like into the future. But thus far our crews have been able to continue to work and install our tenants and deliver the infrastructure that’s necessary,” Brown continued, according to a Seeking Alpha transcript of his remarks
Verizon officials too said the operator is “still on plan” for its 5G buildout this year, in part by obtaining digital signatures on necessary permits.
Operators in the US are undoubtedly looking at the general success of 5G in South Korea for inspiration.
According to the Wall Street analysts at New Street Research, the operators in South Korea posted a surprisingly strong acceleration in 5G customer growth in March, despite the pandemic. The firm said operators there collectively reported the addition of 520,000 new 5G customers in March, up from the 402,000 they added in February.
“We had been expecting a step down in net adds given the ongoing COVID-19 pandemic which resulted in less retail traffic,” the analysts wrote.
That’s important partly because South Korean operators are charging extra for 5G and therefore deriving more revenues from customers who sign up for 5G. So far most US operators are not doing that.
However, there are some indications of 5G delays in other countries around the globe. For example, Nokia’s CEO Rajeev Suri told CNBC that there “could be some delays” in Europe.
Those comments are likely a nod to decisions by regulators in Portugal, Austria, Spain, France, the Czech Republic and elsewhere to delay 5G spectrum auctions amid the spread of the new coronavirus. That action will undoubtedly delay the rollout of 5G if operators can’t get their hands on the spectrum necessary for such a development.
Further, columnists with Bloomberg speculated that the global spike in Internet traffic from COVID-19 stay-at-home orders could push some operators to redirect 5G funds toward their wired networks, which are primarily handling that traffic.
Indeed, even AT&T’s CEO Randall Stephenson hinted that the operator’s fiber and 5G efforts might be impacted by “logistical issues” like obtaining permits from stuck-at-home government officials.
A policy debate
But during the same earnings call where he warned of possible 5G rollout delays, AT&T’s Stephenson also argued that the absence of net neutrality regulations in the US helped operators there deal with COVID-19 traffic spikes.
“The public policy positioning in the United States has been different than it has in most of the rest of the world,” he said, according to a Seeking Alpha transcript of his remarks. “And as a result, the incentive to invest into building capacity and to have cushions of capacity for times like this are playing out, and I hope as we come out of this, our public policy folks will take a hard look at this and recognize that this is important, it’s important for a society to have this type of capability and this type of capacity.”
Stephenson and others have argued that European operators were not able to handle pandemic traffic spikes as well as their US counterparts in part because of stiffer net neutrality rules in Europe. Indeed, during the initial stages of the pandemic, European regulators urged Netflix and other streaming video providers to reduce their bit rates in order to ease the strain on networks.
“Light touch regulatory framework has produced a far superior broadband infrastructure in the US than compared to EU,” argued Recon Analytics analyst Roger Entner in FierceTelecom.