After just five years of commercial deployment, 5G adoption has been much faster than companies expected, especially in terms of subscriber base, network coverage, and the large number of 5G handsets on the market. In the next phase of 5G growth, there are some areas of opportunity, like XR services, B2B markets, and the development of new capabilities.
Transition to 5G, the Fastest-Growing Segment in the Wireless Network Infrastructure
5G is the fastest-growing segment in the wireless network infrastructure market, according to a forecast by Gartner. Of the segments that comprise wireless infrastructure in this forecast, the only significant opportunity for investment growth is 5G. Investment in legacy wireless generations is rapidly deteriorating across all regions, and spending on non-5G small cells is poised to decline as CSPs move to 5G small cells.
As forecasted by Gartner, on a global scale, 5G network infrastructure revenue is set to increase from $13.7 billion last year to $19.1 billion in 2021. Regarding regional predictions, North America is expected to produce a 5G revenue growth of $1.4 billion from 2020 to 2021. Gartner attributes this partly to “increased adoption of dynamic spectrum sharing and millimeter wave base stations.” In Western Europe, the priorities of CSPs are set to include licensing spectrum, making upgrades to mobile core infrastructure, and optimizing regulatory systems. In this region, 5G revenue is forecasted to rise from $794 million in 2020 to $1.6 billion this year. Finally, Greater China will retain its top 5G revenue position globally, with an expected increase of $1.7 billion over the one-year period, with total revenue amounting to $9.1 billion in 2021.
Applications in sectors such as manufacturing, mining, and ports have already passed the testing phase and are being replicated widely. Broader changes in the field will have a long-term impact on the ICT industry, including the acceleration of digital transformation caused by the pandemic.
Preparing for New Technologies
In recent years, cloud and AI have become indispensable to all organizations. Boosted by 5G, these new technologies offer many opportunities, but they also create some challenges.
Firstly, the industry must prepare networks, devices, and content for explosive growth in Extended Reality (XR). Networks need to offer download speeds over 4.6 Gbps, with latency of no more than 10 milliseconds, to support a smooth XR experience.
Reducing barriers to VR headset adoption is key to achieving a peak in virtual reality, one of the key technologies in the AR, VR, and MR extended reality repertoire. Improvements to both the headset and the content must be made to reach that peak. Additionally, to enrich the content ecosystem, the industry must provide cloud platforms and tools that simplify content development, which is known to be difficult and expensive to produce.
Industry-specific telecoms standards are also important to drive wider adoption of 5G in industries. For example, in China, operators and their industry partners have already started working on standards for the application of 5G in industries such as coal mining, steel production, and electricity, which has contributed to a higher penetration rate in these sectors.
Strong Networks: The Key to 5G Applications
Telecom operators need to improve their networks and develop new capabilities to prepare for business-to-business (B2B) applications of 5G. A strong network is central to 5G applications for industrial use, so operators must continue to improve network capabilities such as uplink, positioning, and sensing.
Because industrial scenarios are much more complex than consumer scenarios, companies are now developing autonomous networks that bring intelligence to all aspects of 5G networks – from planning and construction to maintenance and optimization.
Digital transformation also requires different roles for service providers. In addition to providing connectivity, operators can also serve as cloud service providers, system integrators, and more.
76% of Manufacturers Plan to Adopt Private 5G by 2024
According to a report by Accedian, cited by Venture Beat, 76% of manufacturers plan to adopt private 5G by 2024.
Accedian, a provider of performance analytics, cybersecurity threat detection, and end-user experience solutions, partnered with Analysys Mason on a new study of 5G adoption trends. The result was overwhelmingly positive: more than three-quarters of respondents are planning to adopt private 5G networks by 2024, and list the benefits of increased network security (63%), network performance (49%), and application performance (45%) as a few of the key reasons why.
Venture Beat explains that “Respondents also pointed out a few challenges that have impeded their adoption process thus far, such as the increased complexity of managing the network (43%). This is where service providers have a part to play, particularly in moving from being solely a vendor to becoming more of a strategic partner throughout the 5G adoption process. It’s with this collaborative mindset that the promise of 5G in manufacturing will become a reality, and usher in Industry 4.0.”
5G offers a formidable opportunity for companies of all sizes to transform their business, but many might not yet recognize it. With its low latency, enhanced security, and the ability to support artificial intelligence (AI) and augmented reality (AR), many economic sectors will be forever altered by 5G, and the good news is that this transformation has already started.
