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COVID-19 Temporarily Dampens 5G Market

Sept. 1, 2020
Global Re-Forecast 2020-2030 — The 5G infrastructure equipment market comprises revenue generated by the sales of 5G network hardware or network communication devices supporting 5G technology. It includes establishments that […]

Global Re-Forecast 2020-2030 —

The 5G infrastructure equipment market comprises revenue generated by the sales of 5G network hardware or network communication devices supporting 5G technology. It includes establishments that design, build, or develop, the 5G network infrastructure. This includes spectrum, macro-networks, small cells, and other network domains.

The global 5G infrastructure equipment market is expected to decline from $2.03 billion in 2019 to $1.90 billion in 2020 at a compound annual growth rate (CAGR) of -6.41%. The decline is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and reach $9.37 billion in 2023 at a CAGR of 70.16%.

North America was the largest region in the 5G infrastructure equipment market in 2019. Asia Pacific is expected to be the fastest growing region in the forecast period. Africa was the slowest growing region in the forecast period.

Food for Thought from Our 2022 ICT Visionaries

Market Drivers

The adoption of 5G for smart city networks is the primary factor contributing to the growth of the global 5G infrastructure market. The enhanced features of 5G networks such as high speed, reduced or zero latency, wider bandwidth, uniform platform, larger number of connected devices, and extended battery life, are powering smart cities, thereby causing an urban revolution.

Zero latency enables the sensors and devices that power the city’s transportation and traffic system to automatically redirect traffic, and also alert self-driving vehicle systems about the situations on the road.

Advanced 5G capabilities such as enhanced security (instantaneous transfer of videos from the security cameras), instant response to emergency situations, and personalized healthcare, are expected to bring increased digital inclusion to urban residents.

From automated grocery purchases and delivery to complex management of a building’s infrastructure, 5G will enable people to adopt new standards of living.

Due to all these enhanced features, the demand for 5G network is growing, and therefore, adoption of 5G for smart city networks is driving the market.

Market Restraints

The timely deployment of 5G is essential for achieving the objectives of telecom service providers, especially in emerging markets. However, there is a delay in spectrum auction and standardization across many countries. (5G can be in low-band spectrum below 1 GHz; mid-band frequencies from 1 GHz to 6 GHz; or high-band spectrum above 6 GHz.)

While large quantities of new radio spectrum have been allocated to 5G, they come at a high price. A key reason for the delay is the financial health of service providers, who have been struggling to pay licensing fees and other penalties. Also, because the unit pricing of the spectrum is high, few countries, such as India, are taking time to raise money for the spectrum auction.

Clearly, long-term investment in 5G will further dent operators’ finances. Unfortunately, delays in standardization of spectrum allocations also come at a significant cost.

IoT Impact

The Internet of Things (IoT) has been transforming businesses and peoples’ lives, and is continuing to ignite new innovations. IoT represents one of the key growth opportunities for 5G telecommunication service providers. A number of factors, including increased demand from consumers and enterprises, and the availability of more affordable devices, is driving the adoption of the Internet of Things (IoT), which in turn is expected to drive 5G infrastructure. 5G will be driven largely by IoT applications including remote healthcare, traffic safety and control, smart grid automation, industrial application and control, and remote manufacturing, training, surgery, and education. Growth in IoT technology will drive significant operator investment in 5G technology, spectrum and infrastructure.

Additional reports of interest include:

Telecoms Market By Product Type (Wireless Telecommunication Carriers, Wired Telecommunication Carriers, Communications Hardware And Satellite And Telecommunication Resellers), And By Regions – Global Growth, Trends And Forecast To 2022, https://www.thebusinessresearchcompany.com/report/telecoms-market

4G Infrastructure Equipment Market Global Report 2020-30: Covid 19 Growth And Change, https://www.thebusinessresearchcompany.com/report/4g-infrastructure-equipment-global-market-report

Business Processes Outsourcing Market By Type (CRM BPO, HRO BPO, F&A BPO, And Other BPO Services), Drivers And Restraints – Global Forecast To 2022, https://www.thebusinessresearchcompany.com/report/business-processes-outsourcing-market

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This article is adapted from portions of the report 5G Infrastructure Equipment Market Global Report 2020-30: COVID-19 Growth And Change by The Business Research Company.

About the Author

Oliver Guirdham

Oliver Guirdham is Managing Director, The Business Research Company. He has more than 15 years of experience in market research and intelligence. For more information, please email [email protected] or visit https://www.thebusinessresearchcompany.com.