Coronavirus hits telecoms, halting MWC and disrupting supply chains

News

The coronavirus epidemic could have a significant impact on the telecoms year ahead and beyond, experts say.

The GSMA yesterday confirmed that this year’s MWC, the world’s largest telecoms industry gathering, has been cancelled. It was due to take place on February 24-27 in Barcelona. Over 100,000 people were expected to attend from all over the world.

Mission impossible

The GSMA said it had become “impossible” for the show to go ahead in the wake of Coronavirus. Several high-profile vendors and operators had already dropped out, including BT, Ericsson, Nokia, Deutsche Telekom, Rakuten and Orange, whose CEO, Stephane Richard, chairs the GSMA.

A statement from GSMA's CEO, John Hoffman, said, “With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event.”

A report from Wired before the cancellation was confirmed suggested that the GSMA had called on Spanish authorities to declare a health emergency. It suggested the GSMA’s losses could be covered by insurance if it was required to cancel the event due to the declaration of a health emergency.

However, Barcelona's mayor, Ada Colau, reportedly said the city was "perfectly prepared" for the event and there was "no reason whatsoever" to declare such as emergency, according to  Spanish publication La Vanguardia.

The GSMA statement said, “The Host City Parties respect and understand this decision. The GSMA and the Host City Parties will continue to be working in unison and supporting each other for MWC Barcelona 2021 and future editions.”

It added, “Our sympathies at this time are with those affected in China, and all around the world.”

Supply chain

Meanwhile, Omdia, Informa’s new consolidated research and analyst house (bringing together Ovum, Heavy Reading, Tractica and the recently acquired IHS Markit technology research portfolio), warns that the outbreak could slow 5G roll-out.

A statement from Omdia said, “With the epidemic arriving at [the] dawn of 5G’s mainstream deployment phase, the coronavirus has the potential to disrupt the progress of the next-generation wireless standard, as the crisis slows or threatens to slow the production of key smartphone components, including displays and semiconductors.”

While some factories in China have been reopened, few are likely to be at capacity and many employees remain unable to return to their workplaces because of travel restrictions in China, media reports say – particularly as a lot of Chinese people travelled for the Lunar New Year holiday.

Chinese Ministry report

A report from a meeting of China’s Ministry of Industry and Information Technology (MIIT) on Tuesday noted, “the negative impact on the industrial communications industry” caused by the epidemic.

It highlighted challenges such as insufficient demand, difficulties in component supply and production and operation issues.

“Due to the impact of the epidemic, enterprises in some industries are expected to weaken and their capacity to expand is facing constraints,” the report said.

“While continuing to do a good job of scientific prevention and control, the steady and orderly restoration of normal production in the industrial communications industry, and the stabilisation of supplies and social expectations have become very important and urgent tasks,” it added [translated].