August 18, 2020
As COVID-19 Delays Other Countries’ 5G Builds, U.S. is Full Steam Ahead .
A new study projects that COVID-19 will significantly delay European countries’ 5G rollouts, with impacts lasting for years. We’ve also seen 5G slowdowns in other countries—from Israel to Japan—around the world.
Here in the U.S., there’s a much better 5G story to tell. In fact, U.S. wireless providers are going full speed ahead, constructing 5G networks ahead of schedule and positioning this next-generation wireless platform to be a critical driver of America’s economic recovery.
One of the main drivers of our 5G buildout is the long-standing national regulatory framework for wireless services, a framework that promotes competition and investment. This approach helps spur U.S. wireless providers to build for the future—and the future is 5G.
Let’s contrast PwC’s projected European 5G impacts with how the U.S. 5G build is faring.
- 5G Investment. PwC expects “significant” impacts to European telco’s 5G capex investments, with overall investment spending declining by $7–10 billion over the next two years. By contrast, in the U.S. many providers have increased capital spending; Verizon, for instance, upped its 2020 capex by half a billion dollars, AT&T “invested an additional $1 billion in new 5G spectrum” and T-Mobile’s 2Q capex has increased by 26% over the previous year.This increased investment is part of the U.S. wireless industry’s commitment to continue providing Americans with world-leading mobile connectivity. In the past three years, U.S. wireless providers have steadily increased their financial investments in America’s wireless networks, from $25.6B in 2017 to $27.4B in 2018, and $29.1B last year.
- 5G Rollout. PwC projects that European 5G network rollout will be “delayed by 12 to 18 months.” In the U.S., by comparison, wireless providers are “ahead of plans” right now, even when dealing with COVID-19. As Qualcomm President Cristiano Amon noted, U.S. providers “are ahead of schedule,” “accelerating [5G] rollout by at least a quarter.”This matters because companies, app developers, and entrepreneurs need to make their own investments in services and products that leverage the capabilities of 5G networks. If the buildout of 5G networks are delayed, so too will the “advanced applications of 5G technology [including] many IoT use cases,” as PwC notes.
- 5G Economy. PwC also predicts that European regulators will face hurdles in developing a digital economy in their countries because such plans “depend heavily on the telcos’ ability to deliver nationwide 5G connectivity.”By contrast, the U.S. has 5G nationwide, with multiple nationwide 5G networks to be lit up by year-end, and U.S. operators to reach over 67% of Americans, including in rural communities like Sioux Falls, SD. And regional carriers like US Cellular will have dramatically expanded their 5G coverage by year’s end.
These unflattering projections for Europe are no surprise if one looks to the past, either. European mobile operators invested ~$17.7B in 2018, while the U.S. wireless industry invested $27.4B—nearly $10 billion more.
That investment flows down in a significant way to each wireless subscriber: U.S. wireless providers invested over 70% more—$82.28 per person vs. $47.94 per person—in 2018 on a per capita basis, compared to European operators.
So when COVID-19 started battering countries around the world, there was a marked difference between how mobile networks fared in Europe versus the U.S. Over two-thirds of European countries experience mobile speed decreases of up to 30% in late March, while mobile download speeds in the U.S. actually went up by a “statistically-significant” amount.
* * *
While Americans have been staying at home as much as possible, U.S. wireless providers have continued deploying the spectrum and infrastructure that will power the next generation of wireless networks. 5G will boost our economy, create jobs, and bring people new wireless-powered services—like telehealth and remote learning—at a time where we’re seeing firsthand the benefits of this type of connectivity and the opportunities it enables.
We’re in this strong position thanks to smart government policies that already incentivize investment, promote competition, prioritize more licensed spectrum, and speed the buildout of wireless infrastructure. This regulatory framework has been embraced by policymakers on both sides of the aisle.
By contrast, European countries have tried to achieve, through aggressive regulatory intervention, what America’s competitive wireless industry has achieved under a pro-investment regime. Ironically, the PwC report urges European regulators to double down on some of those interventionist policies to avoid delays in 5G rollouts.
If the U.S. continues its winning formula, we will help ensure our leadership of the emerging 5G economy and help spur the economic growth and job creation that America needs to begin to recover from COVID-19.
Keeping Us Connected Through COVID-19
Learn how the wireless industry is working to keep us connected.