The rollout of 5G in Europe will be delayed by 12-18 months as a result of the impact of the Covid-19 pandemic on operator investments, according to a report by PwC. The capex budget at telecommunication companies will be redirected to support demand for network capacity caused by increased home-working and reduced commuting. Overall, investments at European telecommunication companies will decrease by an estimated EUR 6-9 billion over the next two years. Based on this outlook, PwC urged telecommunication companies to review the timetable for the rollout of 5G networks.
To balance the demand for fixed-infrastructure services and 5G, network operators should review capex plans to achieve further efficiencies and mitigate delays to selected projects in other areas, the report recommends. The major capex impacts will likely be on mobile networks and IT projects, according to PwC.
Defaults and late payments among consumers and business customers, coupled with users choosing cheaper subscription packages or renegotiating their contracts, will cause revenues for telecommunications operators to fall, the market researcher expects. The report estimates a 2-3 percent decline in 2020 and a further 1-2 percent in 2021, before recovery begins during 2022.
Delays in 5G deployment carry serious risks and costs for operators, that will struggle to achieve their return on investment targets, PwC said. Regulators also face challenges because their plans to develop the digital economy depend heavily on the companies’ ability to deliver nationwide 5G connectivity, the report added.
