Coronavirus Matters – But Numbers are Uncertain

The best epidemiologists are not sure when the pandemic will be controlled. That makes it impossible to provide an accurate estimate of the effect on telecom and 5G.

If production gets back to normal by the end of Feb, the natural drop in 5G subs will be 10-15 million. I’ve reduced my “surprise-free” 2020 projection from 210 million to 195 million because of corona and the slowdown in December in Korea. I have too little data to be confident.

China has a large economic stimulus planned. If 5G is included, the lost ground could be recovered. World leadership in 5G is important in China and it may choose to get back on track.

If production limits extend past February, the impact will likely be large. Supply chains could break and the world could go into recession. The slowdown in 5G – and much else – could be severe.

Does Korea Slowdown Mean 5G Demand is Falling?

Korea added only 313,000 5G users in December, half the August total. It missed the 5 million year end 2019 goal. The 15 million projection for 5G users in Korea at the end of 2020 is now uncertain.

Phone subsidies have been cut sharply from the $400-600 earlier in the year. Coverage, at over 80%, is the highest in the world but the 90% target for yearend has been missed. The Korean press has been reporting reliability problems, even in Seoul.

One month is not enough to prove a trend. However, I have a few other data points that are making me wonder about demand.

Verizon has delayed its 5G buildout by 1-3 years. Last year, it predicted significant 5G revenue in 2020. Hans Vestberg on the financial call put that off until 2021. The build is also slowing. Verizon’s original plan was to cover about a quarter of the U.S. with mmWave by 2022. It has now pushed that back to 2024-2025. Viavi, whose test equipment is used in most 5G networks, sees very limited growth in 5G networks in 2020 outside of Asia.

5G offers few benefits to consumers, who may be becoming disillusioned. Alternatively, these holdbacks may be an exception. It’s reasonable to reduce the surprise-free projection from 210 million to 195 million because of Korea and coronavirus, but the data is not yet clear.