Global 5G Market Poised for Significant Growth
October 25, 2016
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5G equipment market is expected grow at a CAGR of more than 32%
during the period 2016-2020, according to Technavio's latest report.
"Proliferation of smartphones and tablets is fueling the growth
opportunities of this market. In addition, telecom operators globally
have observed rising demand for enhancing their network management
capabilities to provide strong and stable connectivity solutions for
smart applications," says Abhishek Sharma, a lead M2M
and connected devices research expert at Technavio.
The company's ICT research analysts segment the global 5G
equipment market into the following regions:
In 2015, with a market share of 43%, Americas dominated the global 5G
equipment market, followed by EMEA with 36% and APAC with 21%.
In 2013, approximately 35 million IoT connections were recorded only in
the US region. Smart solutions are widely used in different sectors,
including energy and utilities, automotive,
and logistics. International expansion by US-based operators to provide
IoT solutions will contribute to the market growth.
Nearly 80% of enterprises in the US have been using IoT products
and services, with the support of cloud platforms and data analytics to
improve their business efficiency. With the penetration of Internet of
Everything, all industries are highly in need of efficient and reliable
communication networks to process business operations. This trend is
expected to continue during the forecast period. The US is expected to
witness approximately 30,000 small cell nodes to handle LTE-A and mobile
The demand for high speed broadband access network has been increasing
rapidly. In addition, advent of several online applications and social
media has put pressure on telecom operators to provide high quality
services. This has led telecom operators to expand wireless networks to
meet the rising customer demand and implement power-efficient solutions
to reduce power usage. For instance, Verizon is looking to expand its
power efficiency program to help deploy more small cell nodes for LTE
networks and reduce operational expenses (OPEX) on energy by half of its
current OPEX by 2020. Similarly, Sprint has decided to replace almost
one-third of its cell sites with high-efficiency nodes.
In the EMEA market, telecom vendors such as BT, Vodafone, and Deutsche Telekom are competing
to release their smart technology products and corresponding package
services, which act as a key enabler to the growth of this market.
Increased adoption of sensors in the automotive and healthcare sectors
and growing number of connected devices drive the adoption of 5G
technology in this region. Nordic regions like Sweden, Norway, Denmark,
and Finland have an objective to develop smart cities and hence, huge
investments have been allocated for the development of 5G technology.
In some African countries like South Africa, Kenya, and Nigeria, smart
mobility technology is widely used in applications such as fleet
management, asset tracking, POS, and pay-as-you-go insurance. The rapid
adoption of mobile media by enterprises for promoting products and
services and the increasing adoption of location-enabled searches by
individual users are among the factors that will increase market growth.
Service providers are seeking to improve the performance of network
connectivity to enhance user experience with the roll-out of LTE
networks across the region. In addition, some of the African governments
have established regulations to enforce smart monitoring of electricity
and water meters, driving the use of 5G communications in the energy and
utility sectors. Saudi Araba is also set to invest USD 70 billion in
various smart city projects and is planning to invest heavily in IoT
In the Asia-Pacific region, the increasing rate of urbanization in the world's most populated
countries such as India and China is creating a demand for economic and
environmental development. Government investments in the development of
cities are rising and numerous central government programs (designed to
promote urban developments) have been proposed.
Japan is the major contributing country in this region. Due to the early
deployment of 4G LTE networks, Japan is a potential market for 5G
technology. As service providers have already been offering effective 3G
and 4G solutions, the demand for low latency wireless mobile technology
is expected to grow during the forecast period. Other potential
countries in the region are South Korea and Singapore. "As APAC has the
largest penetration of mobile internet, it is expected to accelerate the
demand for 5G services among individual consumers," says Abhishek.
A few Asian countries including Indonesia, Malaysia, and Thailand are
investing in ICT technologies to help develop efficient and enhanced
public services in the interest of sustainable city management. These
countries are investing in intelligent transportation systems, smart
grid technologies, smart buildings, and smart water management
systems. In addition, Australia and China are investing in IT
infrastructure to support smart city projects designed to promote
quality cities and accelerate economic growth.
The top vendors in the global 5G equipment market highlighted in the
report are Ericsson, Huawei Technologies, Nokia, Qualcomm, Samsung, and ZTE.
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