The 5G infrastructure market was valued at USD 1,619.61 million in 2019 and it is expected to reach USD 29,077.45 million by 2025, registering a CAGR of 53.01%, during the forecast period 2020-2025.
- The market for 5G infrastructure is expected to revolutionize the domain of various broadband services and is supposed to empower connectivity across different end-user verticals. According to GSMA, around 45% urban coverage level has been achieved for 5G networks in the early deployment trails. Countries, like China, India, among others, plan to implement 5G network by 2020, the development of which requires large amounts of capital investment in 5G capable infrastructure.
- A majority of the 5G networks are likely to be composed of small cells. They also help providers reduce costs by eliminating expensive rooftop systems and installation costs, and they are expected to help improve the performance and battery life of mobile handsets.
- Moreover, companies are investing in the development of 5G core services and architecture. For instance, ZTE Corporation, in January 2019, completed the IMT-2020 third phase of 5G test for core network performance stability and security function, thoroughly verifying the maturity of ZTE’s 5G core network.
- 5G technology is expected to unleash a massive IoT ecosystem that would allow networks to serve for billions of connected devices. For instance, according to Ericsson's Mobility Report of June 2019, more than 10 million 5G mobile subscriptions were anticipated globally by the end of 2019. This is indicative of the fact that the market is poised to grow throughout the forecast period.
- The sudden outbreak of COVID-19 pandemic is likely to affect the 5G infrastructure market. For instance, Huawei announced delays in launching 5G mobile networks in Europe. Additionally, the longer the COVID-19 sustains, it becomes more difficult for the functioning of the supply chain in the infrastructure market, through bottlenecks in raw material access, production, and distribution.
- Also, the recent announcement by 3GPP to delay the 5G standard updates due to COVID-19 will impact the Releases 16 and 17, which had to include critical standards for the further development of the technology.
Key Market Trends
Increasing Machine-to-Machine/IoT Connections is Expected to Drive the Market
- Emerging applications and business models, coupled with falling device costs, have been instrumental in driving the adoption of IoT and, consequently, the number of connected devices - connected cars, machines, meters, wearables, and consumer electronics.
- According to Ericsson, it is estimated that the 400 million IoT devices with cellular connections in 2016 are projected to reach 1.5 billion in 2022. This robust growth is expected to be driven by increased industry focus on deploying a connected ecosystem and the standardization of 3GPP cellular IoT technologies.
- While existing 4G and 3G, Wi-Fi, and wireless mesh networks are already being utilized in these smart devices around the world, they are limited by the number of connections they can support, the data can transmit, and most importantly, the speed they can offer, which are hurdles to the IoT revolution.
- Industrial Revolution 4.0 is aiding cellular connectivity throughout the industry, through the rise of IoT and machine to machine connections, which have been instrumental in driving the market.
Europe is Expected to Register a Significant Growth Rate
- Europe is expected to account for a significant portion of the global demand in the 5G infrastructure market, due to the presence of large vendors and carriers' investment to launch technology in this region.
- The joint venture of the European Commission and European ICT industry to provide 5G infrastructure public-private partnership (5G PPP) will deliver solutions, architectures, technologies, and standards for the coming generation. The aim is to save up to 90% of energy per service provided and also the focus will be on mobile communication networks where the dominating energy consumption comes from the radio access network.
- Germany and the United Kingdom are actively involved in testing 5G technology. For instance, Vodafone is trialing 5G at the MediaCity UK tech hub in Salford and is rolling out tests in other areas, such as Birmingham, Glasgow, Liverpool, Bristol, Cardiff, London, and Manchester.
The 5G Infrastructure market is fragmented and is based on new product launches and proven results of the latest products. Hence, the leading industry pioneers have made use of different approaches, including high investments on R&D, new product launches, market initiatives, agreements, joint ventures, mergers and acquisitions, partnerships, collaborations, and other strategies to expand their presence in this market. Key players in the market are Oracle Corporation, Cisco Systems Inc., Intel Corporation, among others.
- February 2020 - Mavenir announced a strategic partnership with Turkcell, which is Turkey’s one of the major digital operators. The alliance, will test and deploy OpenRAN vRAN within the Turkcell Group, initially in their home market, Turkey. The Mavenir vRAN architecture and platform will support 4G as well as both the NSA and SA implementations of 5G NR. The Virtual RAN solution will be deployed on Turkcell Telco Cloud and it will be going live on Turkcell Edge Cloud.
- January 2020 - NEC Corporation announced the development of millimeter-wave distributed antennas (MIMO) for the efficient use of 5G millimeter-wave spectrum (28GHz band). With this newly developed product, it has resolved the issues of shielding and diffraction of propagation paths for interior mobile communications using millimeter-wave communication. This technology applies the company’s proprietary massive MIMO, which combines a large number of independent antennas, to deliver high-speed, high-capacity communications with stable communication quality.
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