COVID-19’s Impact on 5G in APAC and Beyond

COVID-19 has indeed affected the economy, but 5G-related developments have not stopped. Many major economies in the Asia-Pacific (APAC) region are projected to have negative real Gross Domestic Product (GDP) growth this year. For example, Japan is forecasted by the International Monetary Fund (IMF) to have -5.8% GDP growth this year, with Australia and Japan registering -4.5% and -2.1%, respectively. Emerging economies, however, are forecasted by the IMF to mostly register a contraction instead. For instance, China, APAC’s largest economy, is forecasted to register 1% real GDP growth this year compared to its 6.1% growth in 2019.

Amid this economic slowdown, 5G efforts made by many operators have largely remained unaffected. For example, NTT Docomo commercially launched 5G in March 2020, even in the face of a slow initial 5G adoption of 40,000 customers in its first month. China Telecom has also made plans to spend six times what it spent on Capital Expenditure (CAPEX) for 5G in 2019 this year.

Short-term impacts of COVID-19 on the 5G APAC market mainly revolve around supply-side shocks to hardware production, as well as delays in developing standards such as from the 3rd Generation Partnership Project (3GPP). Longer-term impacts might include a heightened sense of urgency in deploying 5G, as well as an increase in awareness of how 5G can potentially help workflows and operations stay afloat during times of disruption.

Analyzing the impact of the 5G prosumer market in APAC, we see that while there was an initial supply-side slowdown for Virtual Reality (VR) and Augmented Reality (AR), there was a ramp up in demand for AR and VR by businesses. For example, while China’s Nreal light and Hong Kong’s MAD Gaze initially saw shipment delays, there was also an increase in demand for AR and VR in some market segments. Some of these segments include the beauty industry, where Taiwan’s Perfect Corporation saw a 43% increase in daily usage using its AR for trying cosmetics.

For the 5G enterprise market in APAC, we see 5G being used actively to combat the COVID-19 virus. For example, the Guangzhou Gosuncn robot company deployed a 5G-powered smart robot that can use Artificial Intelligence (AI) to detect people not wearing a mask and high temperatures in real time. It is powered by Advantech’s edge computer, which powers its self-driving and AI capabilities.

ABI Research has identified three major post-COVID-19 5G trends for both operators and vendors to keep in mind. The first is that there will generally be a diversification in 5G production. There will be reduced reliance on a single supplier, manufacturer, or location, with the relocation of production to emerging markets that are increasing production up the supply value chain. Second is the acceleration of a digital lifestyle. Consumers and enterprises will become used to the idea of incorporating a digital lifestyle. Last would be the acceleration in the development of certain 5G use cases. For example, remote healthcare, autonomous form factors, and wireless factories are use cases that have seen increased usage and investments in during COVID-19.

ABI Research has also identified major 5G markets to look out for in APAC. These include the 5G digital factory, the 5G online cloud video market, and the 5G automotive market. In APAC, ABI Research forecasts the 5G digital factory market will be worth US$63 billion by 2030 in our Digital Factory Data (MD-IICT-105), that the 5G online cloud video market will be worth US$11 billion by 2024 in our Over-the-Top (OTT) and Multiscreen Digital and Video Content (MD-OTMS-168), and that the 5G automotive Internet of Things (IoT) market will be worth US$4.5 billion by 2026 in our IoT Market Tracker: 5G (MD-IOTM5G-107).

While the digital factory will still continue to rely on fixed line, wireless will become increasingly ubiquitous as factories increase in mobility in terms of deploying more moveable components such as Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs). With 5G more use cases can be enabled, such as wireless software downloads into manufactured vehicles, live Mixed Reality (MR) collaborations for product design, and AMRs, many of which would be able to produce tangible cost savings. On the 5G online cloud video front, 5G network slicing would be able to meet the requirements for remote production. This use case would be able to reduce the number of cameras at a live event by 50%. For the automotive market, an autonomous vehicle could generate up to 100 GB of data per second, which needs to be processed either at the edge or the cloud center. 5G’s enhanced Mobile Broadband (eMBB) would be able to accommodate such a bandwidth, while Ultra-Reliable Low-Latency Communications (URLLC) would enable these vehicles to fulfill mission-critical operations.