AT&T And Verizon Agree To Delay Their 5G Rollout After The Aviation Industry Raises Concerns

  The Business Research Company’s 5G Services Global Market Report 2021 - COVID-19 Growth And Change

The telecom giants AT&T and Verizon have finally agreed to delay their much-awaited 5G rollout in the United States by two weeks. Earlier, the two companies had announced that they will go ahead with their planned roll-out on the 5th of January, which was already pushed back from December 5, 2021.

The announcement had created ripples in the aviation space in the United States. Any activity in the 5G space comes with its fair share of raised eyebrows. The aviation sector and officials from the transportation department voiced their concerns over the possible impact of 5G transmissions on radar altimeters, the equipment that uses radio signals to inform pilots of their distance from the ground. Telecom industry groups have, however, maintained that 5G in the C-band frequencies have already been implemented across the globe with no reported incidents whatsoever involving 5G and aircraft. Despite all this, the roll-out is expected to happen sooner rather than later.

This demand for the global 5G services market is seen in its growth from $69.39 billion in 2020 to $83.24 billion in 2021 at a notable compound annual growth rate (CAGR) of 20%. The global 5G services market will continue to grow rapidly for the next five years and reach $188 billion by the end of 2025, at a CAGR of 23%. The growing digital economy is expected to be a major factor driving the 5G market. There is an increase in broadband and internet penetration, consumption of premium content digitally, exponential growth in data absorption, coupled with governments focusing on digitalization in developing and developed nations, and an increasing trend of technology adoption across industries. The rapid development in the digital economy space will require significant performance in terms of speed and will pave way for the increase in the demand for 5G services. As a result, companies in the telecom industry will continue to expand their capabilities in the 5G space.

Delay in standardization of spectrum allocation is challenging the growth of the 5G services market. The timely deployment of 5G is essential for achieving the objectives of service providers, especially in emerging markets. However, there is a delay in spectrum auction and standardization across many countries. A key reason for the delay is the financial health of the service providers, who have been struggling to pay licensing fees and other penalties. Another major reason is that the unit pricing of the spectrum is high – a few countries such as India are taking more time to raise as much money for the spectrum auction. Additionally, long-term and high investment in 5G is bound to further impact operators' finances. This is resulting in a delay in the standardization of spectrum allocation. The delay in the use of spectrum for mobile broadband networks also comes at a significant cost.

The Internet of Things (IoT) that has been transforming businesses and peoples’ lives is continuing to ignite innovations. IoT represents one of the key growth opportunities for 5G telecommunication service providers. Several factors, including increased demand from consumers and enterprises and the availability of more affordable devices, are driving the adoption of the Internet of Things, which in turn is expected to drive the 5G market. 5G will be driven largely by IoT applications including remote healthcare, traffic safety and control, smart grid automation, industrial application and control, and remote manufacturing, training, surgery, and education. Growth in IoT technology will drive significant operator investment in 5G technology, spectrum, and infrastructure.

 Source: The Business Research Company media announcement