By Stéphane Téral, executive director, mobile infrastructure and carrier economics, IHS Markit

Highlights

• Total combined 2G, 3G, 4G and 5G infrastructure hardware revenues are forecast to bottom out at $49.7 billion in 2018, declining 8 percent over the previous year.
• Global 5G hardware revenue is expected to reach $19 billion in 2022, starting from a very low base of early adopters in the United States in the second half of 2018, followed by 5G rollouts in South Korea and massive 5G trials set for China in 2019.

IHS Markit analysis

After more than two decades of existence, the global mobile infrastructure hardware market – including all types of radio access network (RAN), switching and core equipment – has reached maturity. It now fluctuates between $31 billion and $48 billion annually, depending on macroeconomic cycles and shifts in technology generations. The 2G and 3G markets are both continuing to decline, as 4G reached maturity after its rollout peak in 2015. Today, 5G is on the imminent horizon, with the first rollouts occurring in the second half of 2018.

Fueled by LTE upgrades and the start of 5G rollouts in the third quarter of 2018, hardware revenue was stronger than it was the rest of the year. Continuing LTE activity in the US again propelled sequential double-digit growth in the North American market. There was also moderate activity in Europe and South Korea and other countries in Asia. In China, which has the world’s largest LTE footprint of 4 million E-UTRAN Node Bs (eNodeBs), the market dipped significantly again at the end of the first half of the year.

It’s still an LTE world, as we know it

LTE continues its penetration around the world, becoming even more ubiquitous globally. Although preparing existing LTE footprints for 5G upgrades is bringing much-needed fuel to the mobile infrastructure market, LTE deployment volume is far from its peak level as the number of LTE-upgradable mobile networks continues to diminish significantly. 5G is not expected to create a major investment spike any time soon, and mobile network operators are still struggling to deliver a compelling business case for 5G, even as LTE is delivering more 5G-like elements and services as it develops.

5G plans around the world

In order to leverage the LTE network, most service providers are starting their 5G rollouts with 5G non-standalone (NSA) New Radio (NR) technology, as follows:

• United States: AT&T’s and Verizon’s initial rollouts of 5G NSA NR 28 gigahertz (GHz) and 39 GHz for enhanced mobile broadband (eMBB) and fixed wireless access (FWA) use cases, respectively, have started as planned in the second half of 2018. Verizon launched its 5G FWA service in October, using its own 5G Technical Forum (5GTF) standard. Sprint is deploying 5G in its 2.6 GHz by implementing massive multiple-input multiple-output (MIMO) for eMBB services, while T-Mobile is targeting coverage with the 600 megahertz (MHz) spectrum band.
• South Korea: SK Telecom, LG U+ and KT recently turned on their 5G networks, beginning the launch of commercial 5G services in the country. The country’s three telecommunications companies [1] have already deployed a few thousand 5G NR units — LG U+ alone already has 4,000 in Seoul — and are gearing up for 5G eMBB commercial launch at 3.5 GHz and 28 GHz with NSA NR in the first quarter of 2019.
• China: The country is gearing up for its massive 5G trial in 2019 and has already started minor trials this year. China Unicom pledged to roll out more than 300 5G NRs. Trials will be conducted in six cities, to test 5G connectivity, coverage and mobility. China will increase 5G NR volumes very quickly, having so far shown little interest in 5G NSA NR.
• Japan: Moderate 5G rollouts are planned for 2019, to test the technology during the Rugby World Cup. The country will also showcase potential 5G services — 4.5 GHz and 28 GHz — during the 2020 Tokyo Olympics, followed by a commercial launch in 2021. A nationwide 5G launch is not expected until 2023.
• United Kingdom: EE, the leading mobile network in the UK and part of BT Group, is rolling out 5G, to switch on 5G sites in 16 cities in 2019.

Note 1.   At yesterdays excellent SCWS Americas conference, Ki Seok Yang, Manager, Access Network Lab introduced SK Telecom’s in-building service in LTE: improving network quality and capacity in 5G which included an in building 5G repeater.  After his talk he told me that SK Telecom and the two other South Korea wireless network operators have been coordinating and collaborating  their 5G network specs and IMT 2020 RIT contributions.  That will ensure there is a comov 5G spec implemented on all of Korea’s 5G networks, which is very much UNLIKE the U.S. where each carrier will have their own version of 5G, based on 3GPP NR non standalone (LTE Core network),  Suc carrier collaboration might be inferred from the IEEE Techblog post titled South Korean Mobile Operators to Launch 5G Simultaneously on Korea 5G Day.

Mr. Yang sai that South Korea’s Telecommunications Technology Association (TTA) facilities that coordination and collaboration covers telecommunications, information technology, radio communications and broadcasting.  The Association establishes industry standards and has been instrumental in creating the current Korean Information and Communication Standards.  TTA also collaborates with international and national standards organizations, such as ITU and other organizations.

Mobile Infrastructure Market Tracker – Regional

The “Mobile Infrastructure Market Tracker” from IHS Markit provides quarterly data and analysis for the 2G, 3G, 4G and 5G mobile infrastructure market – including market size, vendor market share, forecasts and market trends.