We are still in the midst of a pandemic that will forever change the world as we’ve known it. There are certain sectors of the economy that will never fully come back to what they were. And there will be aspects of daily life that will be altered in a way similar to what happened after 9/11.
In considering how the telecom industry will be affected, let me begin by saying that it’s very difficult to forecast the short-to-medium term, since we are still in the midst of the pandemic and we don’t know when, how, and how quickly the economy will start reopening, or whether we’ll be in for a roller-coaster of partial shutdowns due to flareups. As a result, my thinking is more focused on what I think the longer-term effects on our industry will be. Here are five broad themes:
1. Networks Will be Viewed as an Integral Part of the Economy and National “Wartime” Competitiveness. We’ve certainly learned over these past few weeks that good broadband and wireless networks must meet the needs of new work patterns, which will entail more work from home and remote learning, even as things come back. This means having adequate network capacity and good in-building coverage. For broadband, there will be greater focus on getting to that last 20-30% of homes that are un-served/underserved. For wireless, it’s a boon to mid-band, which has broader and deeper coverage.
We also have to consider that this new era will feature a greater degree of economic nationalism than before. This is not a blue versus red question. There will be reduced global trade and tighter borders. There will be greater protectionism as countries take the steps needed to make sure they’re better prepared for the next pandemic. This will mean some pattern changes in the global supply chain and the repatriation of some aspects of product development/manufacturing that are deemed vulnerable or critical to national competitiveness.
2. Greater Focus on Broadband Connectivity. The move to working and learning from home has laid even more bare the disparity between the haves and have-nots in our economy. This exists for broadband as well, where 20-30% of homes remain unserved or underserved by broadband. Having a minimum 25 MB download service, with a minimum household cap of 500 GB per month (if there must be one), has rapidly moved up the chain from “nice to have” to “need to have.” This must be a focus in order to prepare for the next pandemic or other pattern-altering crisis.
We also need to look at the affordability of these broadband services. The average broadband bill of $50-60 is a tough nugget for many and will be an even tougher nugget with the fast-rising number of individuals who are financially challenged. Government funds that help people pay for food, water and electricity should also be considered for crucial connectivity. Temporary “broadband essentials” type programs put in place by the service providers will need to be extended or become semi-permanent. And with all the spectrum capacity coming on during the next few years, there will be an interesting opportunity for wireless operators to offer a discount-rate home broadband service. I see this as more of a “Metro PCS” for broadband than a ”Verizon 5G Home.”
3. An Enterprise Tilt for 5G. For consumers, I believe there’s less urgency (if there ever was any) for 5G in the short-to-medium term. For most, what they get from a good LTE service is more than adequate. The priority there is continuing to chip away at coverage deficiencies, and ensuring there’s adequate capacity to provide a gigabit-LTE experience as broadly and as consistently as possible. If 5G is the vehicle for that, whether through NR or some combination of DSS/Carrier Aggregation, then so be it.
While I’m a tad sanguine on the consumer segment for 5G, I believe there’s a greater imperative for 5G in the enterprise. Many companies and industry sectors will be permanently altered, and 5G will play a critical role in the future of work. Sectors such as remote work, factory automation, and Industry 4.0 are important areas of opportunity for 5G. I see a potential slowdown in Smart Cities initiatives, as local governments will be consumed by other priorities, and budgets will be strained. The exception will be smart city projects that are somehow virus-related.
4. Some of the Initiatives Taken by Telecom Will End Up Being Permanent. Service providers took rapid action in the early days of this crisis. For consumers, they waived numerous types of fees, promised not to disconnect customers for non-payment, and expanded the number of low-cost, entry-level service plan options. There will be some discussion about which of these new behaviors become more of a permanent fixture. There should be some requirements placed on service providers as part of stimulus dollars and other federal grants.
Also interesting will be the potential lasting effects of the spectrum loan agreements that were put in place several weeks ago. This has provided a clear benefit to MNOs such as T-Mobile, which likes its newfound spectrum so much that it is leasing some of Columbia Capital’s 600 MHz holdings. If we learned one thing, it’s that fallow spectrum can be put to work quickly, with immediate effect. This discussion gets juicy if Dish starts arguing for a delay or adjustment to its 5G network buildout plans.
5. Telecom Will Get Drawn Into a Discussion About Surveillance/Contact Tracing. A glance at what’s happening in places like China, Taiwan, and South Korea gives a sense of where we might be at least partially headed here. Smartphones, newly developed apps, and the powerful combination of wireless/location-based/messaging networks will play an integral role in some form of a testing, reporting, and contact tracing regime that will be needed to help our economy reopen and stay open.
Developing and implementing a system, however necessary it may be, will be controversial. Part of the challenge here is that the combination of Big Government and Big Tech/Telecom aren’t starting from a very high point on the ‘ole trust-o-meter. It will be a bumpy road on the way to our getting more comfortable with a new mechanism that will seem Orwellian to many. But this could also be an opportunity for leadership. If the U.S. over-indexes in anything, it’s available capital, innovation, and entrepreneurial leadership. So let’s have at it.
Read original article at fiercewireless.com.