Technology Business Research’s 5G Telecom Market Forecast 2017‐2022 revealed that despite the lack of standard, including 5G radios, many of the operators in the early adopter category have decided to pull forward their deployment timetables by up to two years.
This acceleration was stoked by government influence as well as the need to make networks more efficient to carry ever‐increasing data traffic. The fixed‐wireless use case also provides a unique opportunity to bring a competitive broadband offering to market that can rival traditional fixed‐access offerings.
“5G has become a highly politicized topic, particularly as it pertains to the tech race between the U.S. and China. Governments in both nations have made 5G a key political initiative and view the technology as critical to remaining a world power,” said Chris Antlitz, a senior analyst in TBR’s telecom practice.
“This governmental oversight has exerted pressure on operators in those countries to pull forward their 5G deployment timetables and leverage their investments as a means of obtaining good favor with regulators.”
Despite initiatives by some operators to accelerate their 5G deployment plans, the business case for 5G remains vague and compatible smartphones remain at least a year away from commercial debut. These factors will cause most operators in non‐lead markets to take a wait‐and‐see approach before moving forward with 5G investment.
Meanwhile, early adopter operators will justify their investment in 5G for the competitive advantage it provides (fixed wireless broadband [FWB] use case) and the cost efficiencies it promises (mobile broadband [MBB] use case), which is encouraging some operators to push forward with their deployment initiatives. Industry studies have shown that 5G can be around 10 times more efficient on a cost‐per‐gigabyte basis compared to LTE.
In the short-term spending on telecom infrastructure services (TIS), which grew only 0.6% in 2017 to $96.8 billion, will decline until 2020, at which time spending on 5G will return the market to growth.
Antlitz attributed recent year’s TIS market growth to maintenance contracts and other services-related work that covered LTE and fixed gear deployed in China. “TIS spend in China is now post-peak, which will have significant implications for key vendors that have exposure to the country and will be a drag on the overall market for the next few years. This will be offset by 5G and transformation-related investments,” he added.
Figure 1: TIS Market Forecast and Growth (US$ billions, 2017-2022)
Source: TBR estimates 2018
He warned that growth in Asia Pacific will decline during the forecast period impacted by M&A in India and post-peak LTE spending in the region, driven by China.