Kevin Restivo (Research Manager)

Plans to spend on 5G technology remain largely intact this quarter given the unexpected pressure the COVID-19 pandemic has placed on many European businesses.

Our first European IT Buyer Sentiment Survey, conducted from March 23 to March 26 to gauge the impact of the pandemic on IT spending plans this quarter, revealed that 58% of spending on 5G technology will be increased or will remain the same.

That is largely good news for IT suppliers as plans to spend on 5G technology haven’t been completely forsaken by enterprises despite the ongoing crisis and corresponding shutdowns in European countries.

In a crisis, it’s easier for enterprises to delay or cancel spending plans altogether given short-term pressures. The positive sentiment expressed by decision makers regarding 5G spending should be encouraging for those hoping to salvage 5G projects this year.

There are troubling signs in the data for 5G suppliers. Almost a third (30%) of the 231 senior decision makers surveyed believe spending on 5G will decrease, while a further 13% “don’t know.”

The results aren’t a reason to panic for suppliers of 5G technology; a slump in demand is expected given the circumstances.

What Are Business Priorities?

However, technology deployment plans are easier to set aside during times of crisis. Cash flow issues and unclear revenue prospects can lead to cutbacks. As such, it’s reasonable to assume more companies will shelve 5G plans or put trials involving 5G and assorted other technologies on hold if their revenue prospects worsen considerably.

The longer the crisis lasts, the harder it will be for firms to stick with their 5G spending plans this quarter. The potential of a prolonged recession off the back of the pandemic will test the resolve of decision makers further.

There may not be a way to deploy 5G, even if the will to do so exists. The delay in spectrum auctions in countries such as France may lead to delays in network rollouts despite best intentions.

Coverage may not satisfy the needs of enterprises even if 5G networks have been deployed. Huawei Vice-President Victor Zhang underscored the point to media earlier this month when he noted that network deployments in Europe will “certainly be delayed” by the pandemic.

Finally, a scarce supply of 5G-ready devices makes it easier for businesses to stick with 4G networks.

What’s the New Future for 5G Technology in the Enterprise?

Adoption of 5G by European enterprises was always going to be a longer-term proposition despite initial enthusiasm expressed last year in our annual Enterprise Mobility survey for the next generation of mobile technology.

Before the crisis hit, 5G subscriptions were expected to comprise less than 1% of mobile subscriptions and mobile M2M connections in Europe by the end of 2020.

The pandemic and the economic turmoil caused by it can still dampen the impetus to adopt 5G and set back adoption plans if economic woes continue. As a result, promising use cases could take longer to emerge than expected in Europe.

5G Adoption in Enterprises

Nevertheless, we remain buoyant about the future of 5G. The long-term outlook for 5G adoption in Europe remains strong. The benefits of the technology (e.g., low latency) that can help European enterprises create greater efficiencies in concert with complementary technologies such as cloud, edge computing, and analytics remain.

IDC’s 5G Task Force is working to better understand how enterprises will incorporate 5G technology in future given the circumstances. The results of our Enterprise Mobility survey next month and ongoing COVID-19 research will prove telling in this regard.

In the meantime, mobile network operators, equipment makers, and other 5G ecosystem players should help clients maximize their investments in the meantime with an eye on 5G deployments in future.

Work with the largest of enterprises is particularly important to the future of 5G in Europe as smaller companies often see 5G, and other emergent technologies, as beyond their means initially. IT investments must meet their immediate needs.

Projects involving exploratory technologies, such as 5G, are often perceived as too expensive with questionable returns and hard to manage given limited resources.

In contrast, larger companies can potentially create a variety of 5G use cases, but internal champions face myriad challenges including internal politics and Byzantine corporate structures. Vendors should help 5G champions in enterprises create use cases by helping them navigate choppy waters internally and choose where to place previous investment dollars.


If you want to learn more about the COVID-19 Impact on 5G deployment, or have any questions, please contact Kevin Restivo, or drop your details in the form on the top right.

If you want to know more about how COVID-19 will affect the technology landscape, see more resources here