In recent first quarter (Q1) earnings calls, three major U.S. telecom companies — AT&T, T-Mobile and Verizon — said they are confident in efforts to continue 5G deployment, despite disruptions from COVID-19.
There are warnings, however, that momentum may slow as some cities will need more time to approve infrastructure, like small cells, as well as other necessary permits and changes.
"Our 5G deployment continues, although we continue to navigate workforce and permitting delays," AT&T CEO Randall Stephenson said on the company’s most recent earnings call. He said AT&T has "no intention of slowing down on 5G and fiber deployment and such, [but the] reality is that a lot of it is not in our control."
Responding to new challenges
With many city employees working remotely to slow the spread of infection, zoning and permitting offices are either closed or unable to process approvals as some still rely on paper engineering plans. Crews may also be unavailable to install infrastructure once it's approved due to social distancing and other time constraints.
"While there still is intent to deploy 5G, the ability to deploy it may be hindered in some cases," Dan Hays, principal at PricewaterhouseCoopers (PwC), told Smart Cities Dive. There could be a delay of around six months in the ramp-up of 5G, depending on how long those difficulties remain, Hays said.
T-Mobile remains bullish on fulfilling its promise of a truly nationwide network. Newly-appointed president and CEO Mike Sievert said on the company's most recent earnings call the integration of the spectrum it acquired in merging with Sprint will be key in "putting us on our path to build the world's best 5G network."
Meanwhile, Verizon Chairman and CEO Hans Vestberg said during its Q1 earnings call that the company is "on plan" with its 5G and fiber deployment, though he offered few specifics. The company did make big financial commitments to support that deployment, however, noting in its latest 10-Q filing with the Securities and Exchange Commission (SEC) that it anticipates capital spending between $17.5 billion and $18.5 billion this year, including on 5G.
Telecoms may benefit if the coronavirus keeps people working from home longer, according to Hays, as it may enhance the demand for fixed home broadband — one of the initial test cases for 5G. Former T-Mobile CEO John Legere also promised high-speed 5G home internet last year, pending the company's successful merger with Sprint.
In paperwork filed with the SEC, all three telecoms warned of the potential adverse effects of the coronavirus on their business. Depending on how long its effects are felt, they all warned in recent 10-Q filings of the potential to cut revenues, which could then affect spending on the business and associated projects.
Stimulus funding for telecommunications has thus far been limited to spending to support telehealth, in addition to existing funds from the Federal Communications Commission (FCC) to spur rural 5G deployment. Future packages may include further support.
There are signs that some Americans are still skeptical of 5G. Over 85% of Americans are familiar with 5G, but only 23% said they would consider switching their internet or mobile provider this year to have 5G, while 30% said they would not.
Other recent findings point to more optimistic signs for operators. GSMA's 2020 report on the state of the global mobile economy showed 60% of North American consumers are willing to pay extra for 5G coverage, though coronavirus could slow the release of 5G-ready devices.
"Despite all the hype that the mobile industry has put around 5G, we still have yet to see significant consumer demand or a meaningful set of mobile devices that would motivate consumers to adopt 5G," Hays warned.
And amid promises made by telecom companies regarding 5G's role in bridging the digital divide, some are yet to be convinced. Federal Communications Commission (FCC) Commissioner Jessica Rosenworcel said during a webinar in early April that policymakers should help it be spread beyond heavily populated areas and out into more rural and suburban areas too.
"[Over] time we're going to have to figure out how that technology is just not limited to wealthy urban centers, we've got to figure out how we use other spectrum bands and change policies to make sure that it reaches more people and more places so those innovations are not just limited to our urban corridors, but can reach everyone," Rosenworcel said.