Forecast: 5G infrastructure spend to double

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Worldwide 5G network infrastructure market revenue will almost double in 2020 to reach $8.1 billion (€6.9bn), according to the latest forecast by research and advisory company Gartner.

Total wireless infrastructure revenue is expected to decline 4.4 per cent to $38.1 billion in 2020. Investment by communications service providers (CSPs) in 5G network infrastructure accounted for 10.4 per cent of total wireless infrastructure revenue in 2019. This figure will reach 21.3 per cent in 2020.

“Investment in wireless infrastructure continues to gain momentum, as a growing number of CSPs are prioritising 5G projects by reusing current assets including radio spectrum bandwidths, base stations, core network and transport network, and transitioning LTE/4G spend to maintenance mode,” advises Kosei Takiishi, senior research director at Gartner. “Early 5G adopters are driving greater competition among CSPs. In addition, governments and regulators are fostering mobile network development and betting that it will be a catalyst and multiplier for widespread economic growth across many industries.”

Rising competition among CSPs is causing the pace of 5G adoption to accelerate. New O-RAN (open radio access network) and vRAN (virtualised RAN) ecosystem could disrupt current vendor-lock-in and promote 5G adoption by providing cost-efficient and agile 5G products in the future. Gartner predicts that CSPs in Greater China (China, Taiwan and Hong Kong), mature Asia/Pacific, North America and Japan will reach 5G coverage across 95 per cent of national populations by 2023.

“Despite investment growth rates in 5G being slightly lower in 2020 due to the Covid-19 crisis (excluding Greater China and Japan), CSPs in all regions are quickly pivoting new and discretionary spend to build out the 5G network and 5G as a platform,” observes Takiishi.

Over the short-term, Greater China leads the world in 5G development, with 49.4 per cent of worldwide investment in 2020 attributed to the region. Cost effective infrastructure manufactured in China coupled with state sponsorship and reduced regulatory barriers is paving the way for major CSPs in China to quickly build 5G coverage. “However, other early adopting and technologically adept nations are not far behind,” notes Takiishi.

Gartner expects that 5G investment will rebound modestly in 2021 as CSPs seek to capitalise on changed behaviors sparked by populations’ elevated reliance on communication networks. 5G investment will exceed LTE/4G in 2022.

CSPs will gradually add stand-alone (SA) capabilities to their non-stand-alone (NSA) 5G networks, and Gartner predicts by 2023, 15 per cent of CSPs worldwide will operate stand-alone 5G networks that do not rely on 4G network infrastructure. This will rapidly divert wireless investment away from LTE/4G and spending on legacy RAN infrastructure will rapidly decline.

Wireless Infrastructure Spending Forecast, Worldwide, 2019-2020 (Millions of US Dollars)

Segment 2019 2019 Growth

( per cent)

2020 2020 Growth

( per cent)

5G 4,146.6 576.6 8,127.3 96.0
LTE and 4G 20,693.2 1.2 16,402.0 -20.8
3G 4,146.6 -25.7 2,608.4 -37.1
2G 797.4 -46.9 472.2 -40.8
Small Cells 5,342.7 11.6 5,736.6 7.4
Mobile Core 4,744.7 3.2 4,780.3 0.3
Total 39,871.2 6.2 38,126.7 -4.4

Because of rounding, some figures may not add up precisely to the totals shown.

Source: Gartner (July 2020)

 


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