According to Gartner, communications service providers (CSPs) in mature markets accelerated 5G development in 2020 and 2021, with 5G representing 39% of total wireless infrastructure revenue this year.
5G is the fastest growing segment in the wireless network infrastructure market, and is predicted to be the only significant opportunity for investment growth in the space.
Investment in legacy wireless generations is rapidly deteriorating across all regions, while spending on non-5G small cells is poised to decline as CSPs move to 5G small cells.
“The COVID-19 pandemic spiked demand for optimised and ultrafast broadband connectivity to support work-from-home and bandwidth-hungry applications, such as streaming video, online gaming and social media applications,” said Michael Porowski, senior principal research analyst at Gartner.
CSPs by region
Regionally, Greater China is expected to maintain the No.1 global position in global 5G revenue reaching $9.1 billion in 2021, up from $7.4 billion in 2020, says Gartner.
Meanwhile, CSPs in North America are predicted to grow 5G revenue from $2.9 billion in 2020 to $4.3 billion in 2021, due, in part, to increased adoption of dynamic spectrum sharing and millimetre wave base stations.
In Western Europe, CSPs are set to prioritise on licensing spectrum, modernising mobile core infrastructure and navigating regulatory processes, with 5G revenue expected to increase from $794 million in 2020 to $1.6 billion in 2021.
5G and sustainability: a corporate responsibility
5G coverage rise in Tier-1 cities to continue
While 10% of CSPs in 2020 provided commercialisable 5G services, which could achieve multiregional availability, Gartner predicts that this number will increase to 60% by 2024, which is a similar rate of adoption for LTE and 4G in the past.
This rapid shift in customer behaviour is driving growth in the global passive optical network (PON) market as a preferred technology.
In addition, with price difference between the 10-Gigabit-capable symmetric-PON (XGS-PON) and other technologies narrowing, CSPs are willing to invest in XGS-PON to differentiate themselves in customer experience and network quality.
Gartner estimates that by 2025, 60% of Tier-1 CSPs will adopt XGS-PON technology at large-scale to deliver ultrafast broadband services to residential and business users, up from less than 30% in 2020.
“Business and customer demand is an influencing factor in this growth. As consumers return to the office, they will continue to upgrade or switch to gigabit fibre to the home (FTTH) service as connectivity has become an essential remote work service,” added Porowski.
“Users will also increasingly scrutinise CSPs for both office and remote work needs.”