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5G shines bright amid wireless spending contraction

5G shines bright amid wireless spending contraction

Investments in 5G network infrastructure to reach fifth of total wireless infrastructure

Credit: Dreamstime

The world’s wireless infrastructure revenue is expected to fall by 4.4 per cent to US$38.1 billion this year as old 2G and 3G networks are rapidly replaced by higher speeds.

According to Gartner, investment in 5G is expected to grow by 96 per cent in 2020 to US$8.1 billion while spending in 4G and LTE shrinks by over a fifth (20.8 per cent) to US$16.4 billion.

However, the 5G investment growth rate pales in comparison to the 2018-2019 rate which reached 576 per cent. 

Meanwhile, legacy speeds such as 3G and 2G are forecasted to fall by 37 and 40 per cent respectively, hitting US$2.6 billion and US$472 million.

In total, investment by communications service providers (CSPs) in 5G network infrastructure accounted for 10.4 per cent of total wireless infrastructure revenue in 2019 and is expected to reach 21.3 per cent in 2020.

Gartner acknowledged that the coronavirus pandemic had caused this to soften, but added that more competition among CSPs is causing the pace of 5G adoption to accelerate. 

Other areas of growth also included small cells, expected to rise by 7 per cent to US$5.7 billion in 2020, and mobile core, which is likely to grow by 0.4 per cent to US$4.8 billion.

Meanwhile, new open radio access network (O-RAN) and virtualised RAN (vRAN) ecosystem could disrupt current vendor-lock-in and promote 5G adoption by providing cost-efficient and agile 5G products in the future, the analyst firm claimed. 

“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,” said 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.”

Gartner claimed that that 5G investment will rebound modestly in 2021 and will exceed LTE/4G in 2022.


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