Insight

COVID-19 outbreak increases need for robust 5G technologies

Carriers are analyzing strategies for spectrum allocation, expanding rollouts and accelerating 5G deployments in the U.S.

  Sean Sullivan

Sean Sullivan

National Telecommunications Industry Leader, KPMG US

+1 303-296-2323

The COVID-19 outbreak and “shelter in place” orders have led to the rise in remote work, school, and entertainment for thousands of people across the country. This has caused Internet use to surge --   placing big demands on communication networks. 

For example, people are signing up for streaming services at a rapid clip. Recently Forbes reported that signups for Disney+ tripled last week from the week before, HBO Now signups increased 90%, and Netflix subscriptions rose 47%. This is in addition to work at home and remote educational needs.

Also, recent analysis shows that the overall average daily fixed broadband consumption per user in the U.S. has increased approximately 3GB from January to now. All of this has increased the need for more robust networks in the U.S – and most likely an acceleration in the deployment of 5G-based technologies.

Rising to the challenge

With increased Internet demand, a number of providers are stepping up to the plate by expanding network  capacity, suspending overage caps, offering lower cost wireless and broadband services, and promising not to cancel service for those impacted by the virus.

As part of the Keep Americans Connected Pledge, the FCC granted AT&T, Verizon, Sprint, T-Mobile, and US Cellular temporary access to additional wireless spectrum to bolster nationwide access during the pandemic. We will likely see more requests for additional spectrum as the crisis continues to unfold and demand keeps surging.

5G spectrum concerns

This brings up issues relevant to 5G deployment, specifically around spectrum allocation. Telcos in many markets have faced challenges upgrading network infrastructure and are bidding large sums to acquire spectrum licenses, and this was before the COVID-19 pandemic.

The FCC’s largest spectrum auction (to date) held in mid-March netted $4.7 billion for 5G mmWave bands.  This high-band spectrum allows for speeds in the tens of Gbps with extremely low latency; however, the coverage area is limited and building penetration is poor.

In comparison, the mid-band spectrum offers a good balance of wide coverage and acceptable building penetration.  It also boasts faster speeds and lower latency than today’s current systems. The FCC was planning to hold two separate auctions for mid-band spectrum later this year – one for 3.5GHz and another for 3.7GHz C-band spectrum. However, they just pushed out the 3.5GHz auction by a month under the current conditions. So what does this mean for future roll-outs?

U.S. 5G rollouts

Currently 5G is expanding across the U.S. and release dates differ for each carrier. As of mid-March, many carriers are still on track, or even announcing plans to accelerate their deployments:

  • Verizon: Fixed and mobile 5G is live in several areas. They have announced an additional $500 million to accelerate the company’s transition to 5G and help support the economy during this period of disruption.
  • AT&T: Mobile 5G for customers in 100+ metropolitan markets with nationwide coverage planned by end of 2020.
  • T-Mobile: Commercial 5G service available in more than 5,000 cities and towns. They announced a $15/month 5G plan to be available after their merger with Sprint.
  • Sprint: Mobile 5G in Atlanta, Chicago, Dallas-Fort Worth, Houston, Kansas City, Phoenix, Los Angeles, New York City, and Washington, D.C.
  • U.S. Cellular: 5G is available in parts of Iowa and Wisconsin.
  • Comcast: Will roll out 5G in early 2020 via a MVNO agreement with Verizon.

During this period of disruption, providers are playing a critical role in connecting people and businesses. Only time will tell how much of an impact COVID-19 will have on the continuing U.S. rollout of 5G. 

Learn more about how KPMG is helping our clients navigate the challenge COVID-19 presents here.