Gartner predicts global 5G network infra spend will all but double this year

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The analsyt house reckons investments in network Infrastructure for 5G will hit $8.1 billion (€6.9 billion) – equal to 21.3% of the total spend on wireless infrastructure.

Gartner says wireless infrastructure revenue is expected to decline 4.4% to $38.1 billion in 2020. Investment by communications service providers (CSPs) in 5G network infrastructure accounted for 10.4% of total wireless infrastructure revenue in 2019.

“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.

He added, “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.”

Rising competition among CSPs is causing the pace of 5G adoption to accelerate. New O-RAN and vRAN ecosystem could disrupt  vendor-lock-in and promote 5G adoption by providing cheaper, agile 5G products in future.

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

Table 1: Wireless infrastructure spending forecast, worldwide, 2019-2020 (millions of US dollars)

Source: Gartner (July 2020)  Due to rounding, some figures may not add up precisely to the totals shown.

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

In the short-term, Taiwan, China and Hong Kong lead the world in 5G development, with 49.4% of worldwide investment in 2020 attributed to the region. Cheaper infrastructure manufactured in China coupled with state sponsorship and reduced regulatory barriers enabling rapid build out of 5G coverage by major CSPs in China. “However, other early adopting and technologically adept nations are not far behind,” said Takiishi.

Gartner expects that 5G investment will rebound modestly in 2021 as CSPs seek to capitalise on populations’ greater reliance on communications, so 5G investment will exceed LTE/4G in 2022.

CSPs will gradually add stand-alone capabilities to their non-stand-alone 5G networks, and Gartner predicts by 2023, 15% of CSPs worldwide will operate stand-alone 5G networks that do not rely on 4G network infrastructure.

This will rapidly divert wireless investment away from LTE/4G and spending on legacy RAN infrastructure will rapidly decline.