Due to the COVID-19 pandemic, the telecommunications standard development organizations 3GPP (3rd Generation Partnership Project) decided to move all the face-to-face discussions online in 2020. As a result, Release 16 (Rel-16), the second set of 5G standards, was delayed by 3 months and completed in early July 2020.
The Rel-16 delay has affected the commercialization of 5G standalone (SA) networks. Previously, China Mobile, China Telecom, China Unicom in China and SK Telecom in Korea were planning to launch 5G SA networks in the first half of 2020. However, 5G SA equipment was not able to go through testing and certification without Rel-16 testing standards. It was not until the second half of 2020 that telecom operators were able to upgrade to 5G SA networks.
Korea Deploys 5G as Originally Planned
Since the launch of 5G commercial services in April 2019, the number of 5G users reach 1.6 million within three months in Korea. This equates to an average of 500,000 new 5G users every month and a strong momentum from the outset. However, due to the lack of 5G phones and consumers’ dissatisfaction with the 5G network quality, the growth in the uptake of 5G began to taper off in August 2019. The monthly net growth in January 2020 was a mere 290,000 users, the lowest since the commercial launch.
Although many handset vendors introduced new 5G phones in February 2020, and the operators expected the Samsung Galaxy S20 would encourage the adoption of 5G services, the new addition of 5G users did not increase significantly due to the coronavirus impact.
In terms of infrastructure, three telecom operators in Korea continued to rollout 5G coverage in 2020 by investing a total of KRW 4 trillion during the first six months of the year. This was mainly for coverage in subways, trains, department stores and universities.
As far as 5G services are concerned, SK Telecom, the largest operator in Korea, has plans to introduce differentiated 5G services such as cloud games and AR/VR in order to attract 6 to 7 million 5G users before the end of 2020. (The number of 5G users was 2.65 million in the first quarter of 2020.) SK Telecom is currently working with cloud service providers, terminal suppliers, and equipment manufacturers to offer differentiated 5G services to meet the experiences of their customers.
U.S. Accelerates its Pace by Encouraging Industry Investment
As most countries released the mid-band frequencies for 5G network, and the industry is largely focused on mid-band frequencies, the U.S. government is scheduled to release the licenses for 3.5GHz and 3.7～3.98GHz before 2020. Meanwhile, in response to T-Mobile’s proposal to cover 90% of agricultural areas in the U.S. with 5G networks, the regulators gave the merger of T-Mobile and Sprint the green light. It is obvious that the U.S. government is encouraging industry investment in 5G networks through policy support t, so that the country will not fall behind in its 5G rollout.
The three major telecom operators in the U.S. announced their commitment to 5G deployment as scheduled, despite the fierce market competition. Verizon plans to extend its 5G footprint from 31 to 60 cities by the end of 2020. AT&T intends to provide 5G millimetre-wave services in 35 cities in the U.S. by the end of 2020 and 5G services on low-band frequencies in 19 major cities, in order to cover the nation with 5G networks in the summer of 2020. T-Mobile is working to integrate its own 600MHz and Sprint’s 2.5GHz, to cover 99% of the U.S. population with 5G networks within six years, and their goal is to offer the fastest 5G networks in the U.S.
China Speeds up Deployment to Make up for Economic Losses
The Ministry of Industry and Information Technology (MIIT) on March 24, 2020 issued a notification for the acceleration of 5G developments in five aspects and with 18 measures. The goal is to promote 5G network rollouts, applications, technological development, safety, and security. The acceleration of 5G infrastructure deployment is meant to stimulate economic development, to make up for the economic losses suffered in the first quarter of 2020 due to COVID-19.
In response to the MIIT’s target for 500,000 5G base stations in 2020, the three telecom operators in China have completed their 5G equipment tenders. China Mobile completed its tender for 5G SA equipment (for about 230,000 base stations) at the end of March 2020. Chinese equipment vendors won close to 90% of the contract value. China Unicom and China Telecom jointly purchased 5G SA equipment (for about 250,000 base stations) in April 2020. In this tender, Huawei and ZTE won nearly 80% of the contract value.
In general, the policy support in China is likely to drive the rollout of 5G infrastructure and hence investment in 5G equipment and applications. According to the forecast by the China Academy of Telecommunication Research under the MIIT, the cumulative investment in 5G networks in China will reach CNY 1.2 trillion by 2025 and drive a total investment of CNY 3.5 trillion across the supply chain and in various applications in different sectors.
COVID-19 has disrupted the 5G standardization timetable and delayed the release of the licenses for 5G frequencies in the U.S. and some European countries. Whilst this is a setback to 5G development, the U.S., Korea, and China continue to push for 5G network deployment and service rollouts as originally planned. Some players have even stepped up their 5G network investment under the government support. Meanwhile, the rapid deployment, high speed and low latency make 5G one of the driving forces in smart epidemic prevention with a myriad of non-contact, home economy applications. Going forward, we can expect more services and applications to emerge.