Telecom companies need to take immediate action to address the pressure on their 5g investments, PwC wrote in the report. Specifically, they must re-examine their 5g business case and deployment schedule, taking into account the significant growth and changes in network capacity requirements due to the new coronation epidemic blockade.
We expect (Telecom) to re prioritise capex plans across all business areas to ensure that there is sufficient funding to continue to invest in 5g and mitigate the risk of delayed deployment to some extent, while responding to the growing demand for their fixed infrastructure. This will involve a difficult choice: a comprehensive review of capital expenditure plans, promotion of further capital expenditure efficiency and postponement of selected transformation projects in other areas.
PwC pointed out that delaying the deployment of 5g will bring serious risks and costs to operators, because many operators have limited 5g spectrum license term, and the longer the delay of service delivery, the more difficult it will be for operators to achieve the return on investment target.
The initial business case of operators depends not only on providing faster versions of the available services, but also on providing new applications, such as supporting Internet of things and autonomous driving vehicles. Unless these services can be delivered, 5gs business case prospects will be affected. The delay of 5g investment also brings serious risks to equipment manufacturers, whose sales may be threatened in the next two years. Finally, regulators face challenges because their plans to develop the digital economy depend heavily on the ability of telecom companies to provide national 5g connectivity.
The report also stressed that investment in the development of innovative platforms and services could be suspended indefinitely, delaying many advanced applications of 5g technology, such as many IOT use cases, into the future.
The new crown crisis is likely to lead to a significant slowdown in investment in European telecom companies in the next two years, especially in mobile networks. This will have a significant impact on the launch of 5g services. There is no doubt that 5g will still be the technical focus of telecom companies in the near future, but we believe that the business cases used by telecom companies in the past must be revised. More advanced applications that rely on 5G may be shelved, such as intensive microcellular networks that provide ubiquitous connectivity for autonomous vehicles.
The company also noted that in European countries that have not yet sold 5g licenses, operators may be reluctant to make significant investments in new spectrum under current conditions. Under such circumstances, the speed of 5g launch in these countries will slow down significantly, according to PwC.
In order to reserve enough space to invest in 5g deployment, operators need to rethink the capital expenditure allocation in all their business areas and further improve their capital expenditure management to achieve efficiency improvement. At the same time, suppliers need to rethink their production and investment plans to cope with the slowdown in 5g investment. The report said.
According to the extended reading news, Huawei has placed a huge order for more than 120 million chips from MediaTek. Analyst: Samsungs wafer foundry business will further develop in the second half of the year. American Dishnetwork chooses VMware to provide 5g cloud platform. Source: c114 communication network editor in charge: Liu Fei_ NBJS10390