Worldwide 5G network infrastructure spending expected to nearly double in 2020

Investments in 5G network infrastructure by communications service providers (CSPs) are predicted to reach 21.3% of total wireless infrastructure, according to Gartner’s latest forecast (Forecast: Communications Service Provider Operational Technology, 2Q20 Update and Forecast Analysis: Communications Service Provider Operational Technology, Worldwide”). This year, worldwide 5G network infrastructure spending is expected to nearly double, as revenues are expected to dip 4.4% to $38.1 billion. 

Gartner is a research and advisory company that offers practitioner-sourced and data-driven research. Gartner’s forecast predicts an unexceptional 5G investment rise, which is expected to exceed LTE/4G in 2020. The 2021 rebound will be credited to CSPs’ determination to capitalize on shifting behaviors aligned with subscribers’ heightened dependence on communication networks. 5G investment will exceed LTE/4G in 2022, the firm predicts. 

SEE: Future of 5G: Projections, rollouts, use cases, and more (free PDF) (TechRepublic)

“Investment in wireless infrastructure continues to gain momentum, as a growing number of CSPs are prioritizing 5G projects by reusing current assets including radio spectrum bandwidths, base stations, core network and transport network, and transitioning LTE/4G spend to maintenance mode,” said Kosei Takiishi, senior research director at Gartner, in a press release. “Early 5G adopters are driving greater competition among CSPs. In addition, governments and regulators are fostering mobile network development and betting that it will be a catalyst and multiplier for widespread economic growth across many industries.”

5G adoption’s swift acceleration is due to the escalating competition among CSPs.
By providing economical and future agile 5G products, the promotion of 5G adoption and existing vendor-lock-in may be disrupted via new O-RAN (open radio access network) and vRAN (virtualized RAN) ecosystems. 

China, Taiwan, and Hong Kong (Greater China); Asia/Pacific; North America; and Japan CSPs, Gartner predicts, will reach 5G coverage across 95% of national populations by 2023.

Takiishi said, “Despite investment growth rates in 5G being slightly lower in 2020 due to the COVID-19 crisis (excluding Greater China and Japan), CSPs in all regions are quickly pivoting new and discretionary spend to build out the 5G network and 5G as a platform.”

For now, with 49.4% of 2020’s worldwide investment, Greater China leads the world in 5G development. Chinese CSPs can rapidly build 5G coverage due to economical infrastructure made in China, reduced regulatory barriers, as well as state sponsorship. However, Takiishi warned, “Other early adopting and technologically adept nations are not far behind.” 

Anticipated are the moderately paced addition of stand-alone (SA) capabilities to existing non-stand-alone (NSA) 5G networks. Gartner also predicts that by 2023, 15% of worldwide CSPs will operate SA 5G networks, without any reliance on 4G network infrastructure, and wireless investments will quickly be diverted from LTE/4G, and will rapidly mark the downward spiral of legacy RAN infrastructure. 

Gartner explained in its report, “5G is the next-generation cellular standard after 4G. It has been defined across several global standards bodies, including the International Telecommunication Union (ITU), 3GPP, and ETSI. The official ITU specification, International Mobile Telecommunications-2020, targets maximum downlink and uplink throughputs of 20 Gbps and 10 Gbps, respectively; latency below 5 ms endpoint to RAN; and massive scalability, although initial deployments may be less ambitious. New system architecture includes core network slicing and edge computing.”

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