5G Market Introduction
5G is a transformational technology, also referred to as the network of the future, through which enterprises will be able to choose cellular connectivity as a primary access technology, which is expected to speed up their digitalization. The Global 5G market is gaining momentum globally. However, for the 5G market to observe exponential growth, both the infrastructure/network and device domains should work hand in hand. The 5G device market has already gained traction in recent years and further continues to evolve rapidly, while the 5G infrastructure market is outpacing existing cellular technology in many parts of the world.
The global 5G market is expected to garner significant revenue over 2020-2021 on account of pivotal growth factors which include boundless connectivity for people, machines, and things; enhanced broadband; massive IoT & critical communications, and many others. As per the RationalStat analysis, the global 5G market is estimated to create more than US$ 100 billion incremental growth over 2021-2025, with a CAGR of more than 40%.
In 2020, despite the COVID-19 pandemic, the pace of introducing new 5G functionality has increased. As per the Global Mobile Suppliers Association (GSA) by the end of 2020, 412 carriers across more than 60 countries and regions had invested in 5G networks, whether it be through testing, trials, pilots, planning, or the actual deployment of 5G networks. More than 140 carriers had launched commercial 5G services, and over 350 5G devices had hit the market. Moreover, it is also estimated that there will be 1.8 billion users of 5G across the globe by 2025, accounting for 20% of global connections.
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5G device market is enjoying healthy competition among industry rivals regarding the launch of 5G devices across the globe. The marketplace has already seen the introduction of many 5G-enabled cellular devices from industry players such as Samsung. Moreover, these numbers reflect a relatively small share of the total cellular subscriptions over a historical network such as 4G/3G/2G and are expected to grow at an exponential growth rate over the next few years.
On the other hand, the global 5G infrastructure market is consolidated in nature with a limited number of industry players enjoying a dominant position in the current scenario. 5G component suppliers such as Ericsson, Nokia, and Huawei are actively participating in the marketplace, thus fostering the rate of development of 5G infrastructure globally. 5G market has seen major developments in recent years. For instance, Ericsson has distributed nearly 6 million 5G-ready radios over 2015-2020. Also, the company has announced 44 5G contracts in 2020 and ended the year with more than 120 commercial agreements and around 80 live 5G networks across the globe. Moreover, the company strives to push the global 5G industry forward by focusing on strategies to continue to develop and deploy products, solutions, and services. One of such examples is the introduction of software enabling 5G to operate independently of 4G networks.
5G - A Plethora of Opportunities Ahead
As the global 5G industry grows, it will incorporate machines and things along with the people. 5G is indeed expected to be a powerful platform for innovation that would enable telecom operators to seek new revenue opportunities across the consumer segment and enterprise segment. In current scenarios, it is quite evident that 5G is greatly supporting telecom operators. With the emergence of 5G, telecom operators are now able to deliver new and differentiating services to consumers with positive revenue potential. Moreover, this upside revenue potential can also be expected for telecom operators who are significantly investing in the development and delivery of new 5G services.
Penetration of 5G across major industry verticals such as healthcare, manufacturing, and automotive is still nascent; however, with the faster roll-out and development of 5G infrastructure and devices in industry verticals, telecom operators are expected to have additional revenue opportunities in the near future. As per the estimates by Ericsson, a total of US$ 700 billion incremental revenue opportunity is expected for telecom operators by 2030, mainly driven by healthcare, manufacturing, and automotive.
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