Due to coronavirus, telco cloud revenue from 5G core deployments is expected to fall around 25% short of the $9 billion forecast for this year.
This is according to the latest outlook from global tech market advisory firm ABI Research. The estimate suggests investment in modernising telco networks may be $2 to $3 billion lower in the short term than previously expected.
Don Alusha, Senior Analyst at ABI Research, said, “The 5G market was growing faster than anticipated, with 2020 expected be the starting point for 5G Standalone (SA) core commercial deployments in communications service providers’ (CSPs) networks. But that expectation may take a little longer to materialise.
“That is due, in part, to the fact that COVID-19 will almost certainly derail further trials and testing to verify the processing performance and stability of 5G SA networks.”
“In the short term, the industry may have no choice but to protect existing consumer revenue,” he added.
Operational efficiencies
Alusha said that CSPs are likely to accompany this defensive approach with small-scale projects that seek operational efficiencies without necessarily committing to new investments for 5G SA networks.
In the longer term, COVID-19 disruption could serve as a springboard for the industry to “mull over alternative growth options at its disposal,” according to Alusha, who noted the industry’s “hard-to-duplicate network assets and infrastructure”.
He said that although challenges will remain, it is possible for the telecom industry to “usher in a new era of prosperity, innovation, and collaboration for enterprises, communities, and individuals” based on 5G SA core, fibre-optic networks and dynamic new software.