5G Market Status
Ericsson Mobility Report touts “5G SA opportunities”
State of 5G SA:
“It’s been exciting to see the industry evolve in the last decade or so, and see first-hand the massive growth of 4G and the arrival of 5G,” said Fredrik Jejdling Executive Vice President and Head of Business Area Networks and Publisher of Ericsson Mobility Report.
The latest edition of Ericsson’s Mobility Report opens with the assertion that “5G standalone brings new opportunities,” which sounds promising, but there’s nothing in the report which shows what those opportunities are.
Ericsson says that 40 service providers have deployed or launched 5G SA in public networks, which agrees with Analysys Mason’s findings. To put that in context, around 280 service providers globally have launched commercial 5G with the overwhelming being 5G NSA.
Dell’Oro counted just seven 5G SA launches to date in 2023, while the GSA – which worked with Ericsson on the stats for its Mobility Report – shared data that also showed little growth in 5G SA this year.
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- 1. 6 bn Global 5G mobile subscriptions are projected to reach 1.6 billion by the end of 2023.
- 30% 5G mid-band population coverage outside mainland China has increased from 10 percent in 2022 to around 30 percent at the end of 2023.
- 56 GB Global mobile data traffic consumption per smartphone is expected to reach 56 GB per month at the end of 2029.
Ericsson predicts that there will be 1.6 billion 5G subs in the world by the end of this year, or 18% of all mobile subscriptions, driven by North America, where 5G penetration will reach 61%. As recently as June, the network equipment vendor forecast that the year-end 5G total would hit 1.5 billion, so clearly the market is increasing faster than expected. In the third quarter there were 163 million 5G subscriber additions taking the total to 1.4 billion by the end of September. As such, the year-end target look eminently achievable.
Ericsson puts total global 5G subscriptions at 5.3 billion by the end of 2029, by which date 5G network coverage should reach 85% of the population, up from 45% at the end of this year.
“With more than 600 million 5G subscriptions added globally this year, and rising in every region, it is evident that the demand for high performance connectivity is strong,” said Fredrik Jejdling, Executive Vice President and Head of Networks, at Ericsson. “The roll-out out of 5G continues and we see an increasing number of 5G standalone networks being deployed, bringing opportunities to support new and more demanding applications for both consumers and enterprises,” he added.
References:
https://www.ericsson.com/en/reports-and-papers/mobility-report
https://www.telecoms.com/5g-6g/5g-subs-exceed-expectations-but-they-re-not-standing-alone
Analysys Mason: 40 operational 5G SA networks worldwide; Sub-Sahara Africa dominates new launches
GSA 5G SA Core Network Update Report
Dell’Oro: Mobile Core Network market has lowest growth rate since 4Q 2017
WSJ: Has 5G Lived Up to Expectations?
Hundreds of billions of dollars have been invested worldwide in 5G. What was the return on that huge investment? As we forecasted five years ago and ever since then, 5G hasn’t revolutionized whole swaths of the economy the way past mobile technologies did.
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Opinion: Network operators and 5G vendors promised too much and under delivered. 3GPP and ITU-R WP 5D are partially to blame for the commercial failure of 5G.
In particular, URLLC- the key 5G use case- could not be realized because 3GPP Release 16 spec for Enhancements for URLLC in the RAN wasn’t complete and so could not be implemented. Those enhancements were to enable URLLC end points to realize ITU-R M.2410 performance requirements, e.g. <1 ms latency in the data plane and <10 ms latency in the control plane.
Also, the 3GPP specs for 5G Architecture did not include implementation of 5G SA Core network, but instead provided many options. Hence, there are many versions of 5G SA Core networks, with many major network operators, e.g. AT&T and Verizon, still using 5G NSA (with LTE infrastructure for everything but the RAN).
ITU-R M2150, the terrestrial 5G RIT/SRIT recommendation, did not meet the M.2410 URLLC performance requirements (due to absence of 3GPP Rel 16 URLLC in the RAN spec), Also, it was not accompanied by the companion recommendation M.1036 issue 6 IMT Frequency Arrangements, which could not be agreed upon till a few months ago (it’s expected to be approved by ITU-R SG 5 meeting this November). As a result, there were no standard frequencies for 5G. That resulted in a “frequency free for all” where administrations like the FCC chose frequencies for 5G that were not agreed upon at WRC’19 and assigned to ITU-R WP 5D to specify the frequency arrangements.
For sure, the U.S. wireless carriers offering 5G service have not had anywhere near a good ROI. That’s indicative of the decline in their stock prices this year. Despite an 8.67% dividend, Verizon (VZ) stock has lost -16.39% YTD through Friday Oct 13th. AT&T (T) stock has performed slightly worse with a -16.74% YTD total return. The Dow Jones U.S. Telecommunications Index is -17.34% YTD through Friday.
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In markets with widespread 5G, cellphone users often fail to notice a difference in service compared with 4G-LTE. This author has had a 5G Samsung Galaxy phone for over one year and does not notice any difference from 4G-LTE.
A key growth opportunity for 5G—businesses installing private networks in places such as manufacturing plants and arenas—has yet to take off.
In the U.S., about 43% of people had 5G mobile subscriptions as of June, ranking 10th worldwide, according to estimates from research firm Omdia. Hong Kong had the world’s highest 5G penetration rate, with 74% of its population subscribed to the mobile service. Ranked second- and third-highest in the world were mainland China and South Korea, which registered 5G mobile-subscription rates of 60% and 59%, respectively.
The high uptake in China and its neighbors is no accident. Smartphone users in several Asian countries have benefited from affordable next-generation devices, strong fiber-optic infrastructure and government policies that encouraged broad 5G cellular coverage. China and South Korea also host technology giants like Huawei and Samsung that are spearheading the wireless technology’s advancement.
Finland had the highest 5G penetration rate in Europe, at 58%, while the United Arab Emirates led the Middle East, also with 58%.
Getting “4G for all, not 5G for few,” has been the mantra for the past two years at Veon, a network operator that serves cash-strapped markets from Ukraine to Bangladesh.
The Amsterdam-based company has already covered 90% of the six countries it serves with 4G signals. Some areas lack the fiber-optic-cable infrastructure to support 5G-capable cellphone towers, and roughly half of the population in those markets lacks even a smartphone, let alone one capable of picking up 5G connections. Some countries also impose high taxes on smartphones, which puts the devices out of reach for many consumers, says Veon Chief Executive Kaan Terzioğlu.
“This is really matching the needs of the markets with the technologies that are available,” Terzioğlu told the WSJ. Spending money on 5G infrastructure before the people it covers are ready to tap it “would be irresponsible,” he added.
Business owners and executives in many poorer countries say they wouldn’t plan around ultrafast wireless connections in places where 2010 technology is still the norm. “There’s not enough coverage or towers here,” says Nicholas Lutchmiah, retail manager at Topbet, a licensed gambling bookmaker and sports-betting company in South Africa, which has most of its shops in poorer townships and rural areas. “That’s the biggest problem that we face. In rural areas and townships, we get 3G, which is rather slow.”
Despite the limitations, some developing countries have invested heavily in 5G technology. Indian telecom companies have committed tens of billions of dollars to the latest network technology and making a push for ultracheap smartphones, for instance. Domestic conglomerate Reliance Industries has led much of its country’s aggressive telecom investments through its Jio brand, the spearhead of leader Mukesh Ambani’s ambition “to connect everyone and everything, everywhere.”
The wireless companies that invested in 5G technology early paid handsomely to refresh their networks. and they have the balance sheets to prove it. The world’s biggest wireless companies—excluding China’s state-backed operators—carried $1.211 trillion of corporate debt at the end of 2022, up from $1.072 trillion four years earlier, according to Moody’s Investors Service.
The credit-rating service said that those companies spent more than in past years building up their wireless networks and issued more debt to finance big spectrum purchases. The price of that spectrum has varied but generally risen. One auction raised $19 billion in India while another group of licenses fetched $81 billion in the U.S.
Debt is nothing new to big telephone networks. The capital-intensive companies have historically run through cycles of heavy upfront spending on new equipment and installation before paying down the tab over time through reliable subscription fees; phone and internet service is a modern necessity, after all.
But securing airwaves for new 5G signals has forced companies to speed up their borrowing. “There’s a lot of debt on these companies,” Moody’s analyst Emile El Nems says. “We’re not ringing the alarm bells, but we’re saying there’s limited flexibility for an accident.”
Executives at telecom companies that borrowed the most to amass 5G-friendly spectrum licenses have said that they made prudent investments to meet customers’ demand for mobile bandwidth, and that their biggest spending is behind them, at least in the near term.
China moved early to enhance its national infrastructure, blanketing the country with 5G base stations as soon as manufacturers started making them. The country’s three major mobile-phone carriers anchored those transmitters to a dense network of fiber-optic cables and encouraged a range of businesses from seaports to coal mines to use the ultrafast connections. It has also provided subsidies and regulatory support to telecom operators and tech companies, facilitating their growth and enabling them to compete on a global scale.
At the end of June, 5G base stations in the country connected 676 million 5G phones and more than 2.12 billion Internet of Things devices, China’s central-government officials said in a press conference in July.
U.S. officials offered their national cellphone carriers fewer direct subsidies than their Beijing counterparts, but policy makers granted many requests on the companies’ wish lists. Trump administration appointees fast-tracked auctions of 5G-capable wireless frequencies and consolidated the wireless sector by approving T-Mobile’s takeover of rival Sprint, a deal that the company and government leaders said would accelerate long-planned network upgrades.
At the same time, the U.S. has tried to persuade other countries to not buy Chinese gear—an effort that prompted some governments to ban its telecom equipment. But China’s homegrown supplier, Huawei, has weathered the U.S. efforts and played a pivotal role in both the domestic and global 5G markets. At the same time, they have turned away from Western suppliers like Qualcomm for some components and are now relying on domestic suppliers.
Huawei remains the world’s largest seller of telecom equipment, commanding about a third of the global market, with sales about twice those of the second- and third-ranked suppliers, Nokia and Ericsson, according to market-research firm Dell’Oro Group.
What happened to businesses being big 5G consumers?
One of 5G’s most alluring promises remains the private network: a system built to the same standard as a high-speed cellphone service but tailored for a business operating in a smaller area like an office, farm or factory. Those networks can connect a range of computers, sensors and robotics without the hassle and cost of hooking them up with wires.
For now, though, companies have been slow to adopt private networks. Consider “the factory of the future” that Ford and Vodafone previewed outside London in 2020. The companies detailed plans for a swarm of mobile robot welders receiving orders over superfast 5G connections, so they could assemble electric cars more quickly and precisely than traditional equipment.
Three years later, the factory of the future is still just a concept. Ford doesn’t use the high-tech wireless standard on its production line, and Vodafone says it ended its proof-of-concept project with the American automaker. A Ford spokesman didn’t respond to a request for comment.
In total, organizations have built more than 750 private cellular networks around the world, according to Besen Group, a private-network consultancy. Installations run the gamut from college campuses to open-pit mines, though many of them use less-advanced 4G gear instead of the latest-generation electronics.
That is partly because of a chicken-or-the-egg problem with private networks. A device maker might not want to create 5G gear for factories until more factories have installed cellular networks. But factory owners don’t want to invest in those networks unless there are enough 5G-ready devices on the market to justify the upgrade.
“This is actually fairly typical for new network equipment,” says Vodafone cloud and private-network chief Jenn Didoni. “The devices will certainly come, but there aren’t as many as in 4G, and they aren’t as tested and understood.”
Dell’Oro estimates that private networks make up less than 1% of the market for the relevant 5G equipment, but the research firm predicts that early revenue will grow, on average, at a 25% annual rate over the next five years as more connected gadgets hit the market.
“In the beginning, a lot of the conversations used to be about feasibility,” says Durga Malladi, a senior vice president at chip maker Qualcomm. “If I am interested in moving robots and overhead cranes using 5G, can I even get the same level of reliability and latency that I have expected from just wired? And the answer to that is, in almost all instances, absolutely yes.”
Many industries have yet to experience the market disruption that 5G’s boosters promised. A notable exception: Some telecom companies are enjoying a windfall from wireless bandwidth improvements at the expense of their cable-internet rivals.
Mobile network carriers like T-Mobile and Verizon have used new high-speed wireless equipment to beam internet service straight into customers’ homes, racking up more than five million new subscriptions altogether in under three years. The over-the-air service has dented cable-industry revenue and forced companies to compete in areas where they were once the only game in town.
Telecom companies have long known how to beam internet connections into people’s homes without the considerable expense of new wires and equipment. But wireless companies faced an uphill fight against their hard-wired competitors until 5G improvements brought advances such as more-efficient signals that could run through the same cell-tower antennas that companies were already installing to connect cellphones.
That helped mobile-network operators quickly rack up home-internet customers at much lower variable costs, especially in America, where cable companies’ dissatisfied customers offer a juicy target.
“The U.S. is very unusual because we pay so much for home broadband,” says Jeff Heynen, an analyst for Dell’Oro. “The way T-Mobile and Verizon are addressing the service, clearly you know who they’re going after.”
Markets with many far-flung customers, like Australia and Saudi Arabia, could soon follow the U.S. lead in 5G home-internet service, Heynen adds. Industry experts warn that the booming wireless-broadband business isn’t going to replace cable soon, however.
Capacity is the main factor holding back wireless internet services. A single cellular tower can only handle so many videogames, TV streams and Zoom calls at once, even after 5G upgrades offer those towers more bandwidth to go around.
T-Mobile CEO Mike Sievert has even played down his company’s booming home-internet business, telling investors at a Goldman Sachs conference in September that the service would eventually reach a customer base in the single-digit millions. That is a sliver of the more than 100 million U.S. households that could use broadband service. “It’s a very mainstream offer, but we don’t think it’s going to take over cable and fiber,” Sievert said.
Omdia forecasts weaker 5G market growth in near term, 4G to remain dominant
5G is a big letdown and took a “back seat” at CES 2023; U.S. national spectrum policy in the works
Another Opinion: 5G Fails to Deliver on Promises and Potential
3GPP Release 16 5G NR Enhancements for URLLC in the RAN & URLLC in the 5G Core network
Ericsson: Global 5G subscriptions close to 1.3 billion in Q2-2023
According to Ericsson’s Mobility Report update, approximately 260 communications service providers (CSPs) have launched commercial 5G services. About 35 CSPs have launched 5G standalone (SA) networks. The Q2-2023 additions bring the global number of 5G subscriptions close to 1.3 billion.
India continues to lead the world in 5G subscription growth rate with more than seven million of the 175 million global subscriptions added between April and June (the second financial quarter – Q2) 2023 accounted for in the country.
China had the second highest country growth rate with more than five million 5G additions during Q2.
The United States was in third place with more than three million 5G subscription additions.
The four-page August 31 update is an addendum to the full edition of the Ericsson Mobility Report, published in June 2023. It focuses on recent updates to the quarterly subscription and traffic data sections.
Other information in the Q2-2023 update includes:
- In Q2 2023, the number of mobile subscriptions totalled 8.3 billion, with a net addition of 40 million subscriptions during the quarter. The number of unique mobile subscribers is 6.1 billion.
- Global mobile subscription penetration was 105 percent.
- The number of mobile broadband subscriptions grew by about 100 million in the quarter, totalling 7.4 billion, a year-on-year increase of five percent. Mobile broadband now accounts for 88 percent of all mobile subscriptions.
- Mobile data traffic grew by 33 percent between Q2 2022 and Q2 2023.
- 4G subscriptions increased by 11 million, totalling about 5.2 billion and representing 62 percent of all mobile subscriptions.
- WCDMA/HSPA subscriptions declined by 85 million and GSM/EDGE-only subscriptions dropped by 59 million during the quarter. Other technologies fell by about two million.
References:
https://www.ericsson.com/en/news/2023/8/emr-q2-2023-update
https://www.ericsson.com/en/reports-and-papers/mobility-report/reports/june-2023
Ericsson Mobility Report: 5G monetization depends on network performance
Ericsson Mobility Report: 5G subscriptions in Q2 2022 are 690 million (vs. 8.3 billion total mobile users)
June 2022 Ericsson Mobility Report: 5G subscriptions increased by 70 million in Q1-2022 to reach 620 million
U.S. Network Operators and Equipment Companies Agree: 5G CAPEX slowing more than expected
We noted in a recent IEEE Techblog post that the 5G spending slowdown in the U.S. is broader than many analysts and executives expected. Well, it’s worse than that! The previously referenced negative comments from the CEO of Crown Castle, were corroborated by American Tower last week:
“The recent pullback was more abrupt than our initial expectations,” said Rod Smith, the CFO for cell tower firm American Tower, during his company’s quarterly conference call last week, according to Seeking Alpha. Smith was discussing the reduction in US operator spending on 5G, a situation that is now cutting $40 million out of American Tower’s margin expectations. “The initial burst of 5G activity has slowed down,” agreed the financial analysts at Raymond James in a note to investors following the release of American Tower’s earnings.
Cell tower giant SBA Communications said it too is seeing the broad pullback in spending that has affected its cell tower competitors (i.e. American Tower and Crown Castle). But the company’s management sought to reassure investors with promises of continued growth over the long term. During their earnings call, SBA executives said they expect activity to increase next year as T-Mobile looks to add 3.45GHz and C-band spectrum to its network, and as Dish Network restarts its network buildout.
The two largest 5G network equipment vendors that sell gear in the U.S. are seeing similar CAPEX cutbacks. “We see some recovery in the second half of the year but it will be slower than previously expected,” Nokia CEO Pekka Lundmark said earlier this month during his company’s quarterly conference call, in response to a question about the company’s sales in North America. His comments were transcribed by Seeking Alpha. Ericsson’s CEO, Borje Ekholm, is experiencing similar trends: “We see the buildout pace being moderated,” he said of the North American market, according to a Seeking Alpha transcript
AT&T’s CFO Pascal Desroches confirmed the #1 U.S. network operator is slowing its network spending. “We expect to move past peak capital investment levels as we exit the year,” he said during AT&T’s quarterly conference call, as per a Seeking Alpha transcript. AT&T’s overall CAPEX would be $1 billion lower in the second half of 2023 when compared with the first half of this year due to greatly reduced 5G network build-outs.
“This implies full year capex of ~$23.7 billion, which management believes is consistent with their prior full year 2023 capex guidance of ‘~$24 billion, near consistent with 2022 levels’ and includes vendor financing payments,” wrote the financial analysts at Raymond James in their assessment of AT&T’s second quarter results, citing prior AT&T guidance.
“Although management declined to guide its 2024 outlook, it has suggested that it expects capital investments to come down as it progresses past the peak of its 5G investment and deployments. We believe the trends present largely known CY23 [calendar year 2023] headwinds for direct 5G plays CommScope, Ericsson and Nokia. Opportunities from FWA [fixed wireless access] might provide modest offsets and validate Cambium’s business. AT&T’s focus on meeting its FCF [free cash flow] targets challenge all of its exposed suppliers, which also include Ciena, Infinera and Juniper,” the financial services firm added.
Verizon CEO Hans Vestberg told a Citi investor conference in January that CAPEX would drop to about $17bn in 2024, down from $22bn in 2022″ “We continue to expect 2023 capital spending to be within our guidance of $18.25 billion to $19.25 billion. Our peak capital spend is behind us, and we are now at a business-as-usual run rate for capex, which we expect will continue into 2024,” explained Verizon CFO Tony Skiadas during his company’s quarterly conference call last week, according to Seeking Alpha.
“After years of underperformance, perhaps the best argument for Verizon equity is that expectations are very low. They are coming into a phase where capex will fall now that they’ve largely completed their 5G network augmentation. Higher free cash flow will flatter valuations, but it will also, more importantly, lead to de-levering first, and potentially even to share repurchases down the road,” speculated the analysts at MoffettNathanson in a research note to investors following the release of Verizon’s earnings.
T-Mobile USA had previously said its expansive 5G build-out had achieved a high degree of scale and it would reduce its capex sharply starting in 2023.”We expect capex to taper in Q3 and then further in Q4,” said T-Mobile USA’s CFO Peter Osvaldik during his company’s quarterly conference call last week, according to Seeking Alpha. He said T-Mobile’s capex for 2023 would total just under $10 billion. T-Mobile hopes to cover around 300 million people with its 2.5GHz midband network by the end of this year. Afterward, it plans to invest in its network only in locations where such investments are necessary.
Similarly, Verizon and AT&T are completing deployments of their midband C-band 5G networks, and will slow spending after doing so. That’s even though neither telco has deployed a 5G SA core network which involves major expenses to build, operate and maintain.
Dish Network managed to meet a federal deadline to cover 70% of the U.S. population with it’s 5G OpenRAN in June. As a result, the company said it would pause its spending until next year at the earliest.
American Tower was a bit more hopeful that CAPEX would pick up in the future:
- “Moderation in carrier spend following the recent historic levels of activity we’ve seen in the industry isn’t unexpected and is consistent with past network generation investment cycles,” explained CFO Rod Smith.
- “The cycles typically progress as there’s a coverage cycle. It’s what we’ve seen in past cycles, including 3G and 4G. It’s an initial multiyear period of elevated coverage capex, and it’s tied to new G spectrum aimed at upgrading the existing infrastructure,” said American Tower’s CEO Tom Bartlett. “And then later in the cycle, it will fill back into a capacity stage where we’ll start to see more densification going on. So I’m hopeful that our investor base doesn’t get spooked by the fact that this is a pullback. It’s very consistent. The cadence is really spot on with what we’ve seen with other technologies.”
In April, Dell’Oro Group analyst Stefan Pongratz forecast global telecom capex is projected to decline at a 2% to 3% CAGR over the next 3 years, as positive growth in India will not be enough to offset sharp capex cuts in North America. He also predicted that wireless CAPEX in the North America (NA) region would decline 10% to 20% in 2023 as per this chart:
Now, that NA CAPEX decline seems more like 30% this year!
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References:
U.S. 5G spending slowdown continues; RAN revenues set to decline for years!
USA’s 5G capex bubble will burst this year as three main operators cut back
GSM 5G-Market Snapshot Highlights – July 2023 (includes 5G SA status)
Worldwide Telecom Capex to Decline in 2023, According to Dell’Oro Group
https://www.fiercewireless.com/wireless/wireless-capex-north-america-expected-decline-10-20-2023
Dell’Oro: Telecom Capex Growth to Slow in calendar years 2022-2024
U.S. 5G spending slowdown continues; RAN revenues set to decline for years!
The 5G spending slowdown in the U.S. is broader than many analysts and executives expected. Dell’Oro’s Stefan Pongratz recently wrote:
“Even if it is early days in the broader 5G journey, the challenge now is the comparisons are becoming more challenging in the more mature 5G markets and the upside with the slower-to-adopt 5G regions is not enough to extend the growth streak. Meanwhile, growth from new revenue streams including Fixed Wireless Access and enterprise LTE/5G is not ramping fast enough to change the trajectory. With 5G-Advanced not expected to trigger a new capex cycle, the question now is no longer whether RAN will grow. The question now is, rather, how much will the RAN market decline before 6G comes along?”
AT&T, Verizon, T-Mobile and Dish Network broadly spent 50% less on their 5G network build-outs than Crown Castle [1.] CEO Jay Brown expected. As a result, Crown Castle cut $90 million in expected services revenues from its full year 2023 financial forecast.
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Note 1. Crown Castle offers services including new cell site development and equipment installation. The company has a nationwide footprint of 40K+ cell towers, ~115K small cell nodes on air or under contract and more than 80K route miles of fiber optic cable.
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“So the back half of 2023, we did see a change relative to what we previously expected,” Brown said last week during his company’s quarterly conference call, as per a Seeking Alpha transcript. “The first half of 2023 came in exactly where we thought it was going to, and we saw the change in activity during the quarter. And that’s what affected our second half of the year, the activity that we’ll see in the – we believe we’ll see in the third and the fourth quarter.”
“I believe this initial surge in tower activity [among U.S. network operators] has ended,” Brown said, arguing that early 5G network buildout programs are coming to an end. “In the second quarter, we saw tower activity levels slowed significantly. As a result, we are decreasing our 2023 outlook primarily as a result of lower tower services margin.”
“From our perspective, this new guidance is as close to a disaster as it gets,” wrote the financial analysts at KeyBanc Capital Markets in a note to investors last week. The analysts said the cell tower industry broadly is very stable, and warnings like those from Crown Castle are few and far between. “We struggle to understand how the … trajectory could change so materially.”
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Nokia and Ericsson take a hit:
5G network equipment vendor Nokia experienced a huge revenue drop of 40% from the North America market. Nokia CFO Marco Wiren stated that was “a result of declines across all business groups as inventory digestion continued and [communication service providers] reevaluated their spending plans.”
“The weakness was clearly visible,” Nokia CEO Pekka Lundmark said earlier this month, according to Seeking Alpha.
Nokia’s 5G FWA business has run into some market challenges, specifically tied to the vendor being “highly sensitive to a very small number of customers.” “Especially in North America, now when those deployments are significantly more slow, there is inherently some volatility here,” Lundmark explained.
Likewise, Ericsson’s CEO Borje Ekholm said the vendor’s quarterly sales in North America represented “one of the lowest shares we’ve seen in many years. But on the other hand, we see India growing very, very fast.”
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“We believe AT&T is a primary culprit with slow spending, but inventory absorption is occurring with other operators too,” wrote the financial analysts at Raymond James in a recent note to investors. “CommScope has exposure to the same mobile and fixed access projects as well as an operator bias to its business. Ciena has high exposure to the North American operators (fiber backhaul from cell sites), but we think guidance it offered in early June reflected AT&T absorbing inventory. Ciena, Infinera, and Juniper have material cloud exposure that we believe is improving as an offset to slower telcos.”
References:
https://www.sdxcentral.com/articles/analysis/open-ran-growth-slows-to-a-crawl/2023/07/
GSM 5G-Market Snapshot Highlights – July 2023 (includes 5G SA status)
By the end of June 2023, GSA had identified 535 network operators in 162 countries and territories were investing in 5G, including trials, acquisition of licences, planning, network deployment and launches.
This number excludes nearly 200 additional companies awarded priority access licences in the U.S. auction of CBRS spectrum, which could potentially be used for 5G
Of those, a total of 259 operators in 102 countries and territories had launched one or more 3GPP-compliant 5G services 252 operators in 100 countries and territories had launched 5G mobile services 113 operators in 62 countries and territories had launched 3GPP-compliant 5G fixed wireless access services (just over 43% of those with launched 5G services)
13 operators had announced soft launches of their 5G networks that are not counted in the above launch figures 115 operators are identified as investing in 5G standalone (including those evaluating/testing, piloting, planning and deploying, as well as those that have launched 5G standalone networks).
GSA has catalogued 41 operators as having deployed or launched 5G standalone (SA) in public networks.
115 network operators are identified as investing in standalone 5G (including those evaluating, testing, piloting, planning and deploying as well as those that have launched standalone 5G networks).
GSA has catalogued 2,039 announced 5G devices, up by more than 62% from 1,257 at the start of 2022 GSA has identified 1,083 announced 5G phones, up more than 76% from 613 at the start of 2022
There are at least 1,650 commercially available 5G devices, up more than 66% annually from 990
References:
GSA: 5G Device Ecosystem June 2023 Summary
GSA FWA Report: 38 commercially launched 5G FWA networks in the EU; Speeds revealed
Malaysia’s Maxis agreement with DNB to provide nationwide 5G services
Malaysian telco Maxis executed a 5G access agreement with state-run network operator Digital Nasional (DNB), according to local press reports.
Maxis said it will seek its shareholders’ approval for the execution of the agreement, at an extraordinary general meeting to be carried out in the third quarter. If the agreement is approved, Maxis will become the last of the country’s mobile operators to agree to execute the 5G access agreement with DNB.
Telekom Malaysia, CelcomDigi, YTL Communications and U Mobile have all agreed to the wholesale access agreement with the state-run network operator.
“DNB remains the single neutral wholesale network provider to undertake the deployment of 5G infrastructure and network nationwide as at the latest practicable date. Therefore, the entry into the access agreement with DNB will enable Maxis to provide the 5G services to its customers,” the company said in a filing to the local stock exchange.
The filing also indicated the price to be paid by Maxis to execute the agreement is yet to be determined and may be subject to periodic reviews conducted by the Malaysian Communications and Multimedia Commission as well as a by DNB.
DNB was set up by the Malaysian government in 2021 as a special purpose vehicle to develop the country’s 5G network infrastructure, which private telecommunications firms would use to offer 5G services to their customers.
However, Malaysia’s 5G roll-out by DNB had raised concerns over pricing and transparency, as well as worries that a single state-run 5G network would result in a nationalized monopoly.
Due to these concerns, the new prime minister, Anwar Ibrahim, had previously announced an overall review of the rollout of the national 5G network due to the lack of transparency. In May, the government announced it will enable the deployment of a second 5G network in 2024, adding that a new entity will be created to manage Malaysia’s second 5G network.
Malaysia’s Communications and Digital Minister Fahmi Fadzil recently said that DNB will continue to roll out 5G network infrastructure in the country until 80% coverage is achieved by the end of this year. The Malaysian government also confirmed that DNB will be taken over by a private entity once it achieves its 5G population coverage target.
Grand View Research: 5G New Radio Market to be Worth $251.37B by 2030
The global 5G New Radio (5G NR) market size is expected to reach $251.37 billion by 2030, registering a CAGR of 29.1% from 2023 to 2030, according to a new report by Grand View Research, Inc.
The market research firm says the 5G New Radio (NR) market is being driven by a number of factors, including the increasing demand for high-speed and low-latency connectivity, the growth of the Internet of Things (IoT) and Machine-to-Machine (M2M) communications, and the increasing adoption of cloud-based technologies.
Additionally, the need for faster and more reliable communication networks to support emerging applications such as autonomous vehicles, augmented reality and virtual reality, and remote healthcare is also driving the growth of the 5G New Radio market.
Key Industry Insights & Findings from the report:
- The hardware segment dominated the market in 2022 owing to the growing need for sophisticated radio units like as massive MIMO and beamforming, which provide higher coverage and capacity while also assisting in resource optimization, is a crucial element driving the segment growth.
- The Sub-6 GHz segment dominated the market in 2022 owing to Sub-6 GHz spectrum bands ability to provide a strong combination of coverage and capacity, making them suited for offering high-speed connection to large numbers of users, is a primary driver driving sector expansion.
- The Standalone (SA) segment is projected to expand at the highest CAGR owing to the advantages over Non-Standalone (NSA), including faster network performance and lower latency.
- The Ultra-reliable Low-latency Communications (URLLC) segment is expected to grow significantly over the forecast period. The growing need for mission-critical applications requiring high reliability and low latency is propelling the URLLC segment in the 5G New Radio (NR) market.
- However, neither the current 3GPP specs or ITU-R M.2150 standards meet the URLLC performance requirements in ITU-R M.2410. That is because 3GPP Release 16 URLLC in the RAN has yet to be completed and performance tested.
- The manufacturing segment is projected to expand at the highest CAGR over the forecast period. The potential of 5G NR technology to provide real-time monitoring and management of industrial processes, which leads to higher efficiency and productivity, is a key element influencing the segment growth.
- Asia Pacific dominated the regional market in 2022. The region has a sizable population and a rising number of mobile customers, which is fueling demand for innovative apps and high-speed internet services.
Industry Insights:
The telecom and IT segment dominated the market in 2022 and accounted for more than 30.0% share of the global revenue. The growing adoption of cloud-native technologies, which allow operators to virtualize network functions and deploy them on cloud infrastructure, is a significant factor contributing to segment growth. With the increased speed, bandwidth, and capacity of 5G, telecommunication companies can offer faster and more reliable mobile connectivity to their customers, enabling new applications and services that were not possible with previous generations of wireless technology. This includes things like virtual and augmented reality, high-definition video streaming, and real-time gaming. Additionally, 5G networks are highly customizable, allowing telecommunication and IT companies to tailor their services to meet the specific needs of different industries and use cases.
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The manufacturing segment is projected to expand at the highest CAGR over the forecast period. The ability of 5G NR technology to enable real-time monitoring and control of manufacturing processes, leading to greater efficiency and productivity is a significant factor contributing to the segment growth. For instance, 5G NR can facilitate the use of Industrial Internet of Things (IIoT) sensors and devices, which can provide real-time data on machine performance, production line throughput, and other critical metrics. This data can be used to optimize processes, reduce downtime, and improve quality control. Additionally, 5G NR can enable remote access and control of manufacturing equipment, allowing for greater flexibility and responsiveness in managing production processes. These benefits can lead to increased profitability and competitiveness for manufacturers, driving the adoption of 5G NR solutions in the manufacturing industry.
Regional Insights:
The Asia Pacific region dominated the market in 2022 and accounted for more than 38.0% share of the global revenue. The increasing adoption of 5G technology in countries such as China, Japan, South Korea, and India is a major factor contributing to the regional growth. The region has a large population and a growing number of mobile subscribers, which is driving the demand for high-speed internet services and advanced applications. The governments in these countries are also investing heavily in the development of 5G infrastructure, which is expected to provide significant opportunities for telecom companies and network equipment providers in the region. Additionally, the region is witnessing a significant increase in the use of smartphones and other mobile devices, which is driving the demand for 5G-enabled devices and services.
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The North America region is projected to expand at the highest CAGR over the forecast period. Significant investment is being made in the development and implementation of 5G infrastructure in the area, owing to the growing demand for high-speed internet access, IoT applications, and cloud services. Furthermore, the use of technologies such as artificial intelligence, edge computing, and big data analytics is increasing, which is pushing the demand for high-performance 5G networks. Collaborations between telecom firms and technological behemoths to build and implement 5G networks and services are also developing in the area. In addition, the area has been an early user of 5G-enabled smartphones and other gadgets, which is projected to boost market development in the future years. Furthermore, the region has been an early adopter of 5G-enabled smartphones and other devices, which is expected to further drive the growth of the market in the coming years.
Key Companies & Market Share Insights:
Leading industry players are investing heavily in R&D to expand their product lines, which will help the 5G New Radio (NR) market thrive. Participants in the market are also expanding their global presence through a variety of strategic initiatives such as new product launches, collaborations, mergers and acquisitions, and cooperation. For instance, in February 2023, Telefonaktiebolaget LM Ericsson, a telecommunication technology company, introduced new 5G indoor radio equipment and software to offer corporate use cases and monetization potential. Additionally, the telecom equipment manufacturer unveiled ten new radio devices spanning RAN and Transport to expand its range, with the goal of reaching net zero emissions in networks.Telefonaktiebolaget LM Ericsson has also introduced the IRU 8850 radio for single or multi-operator deployment in medium to large venues such as airports, workplaces, and stadiums. The system can service up to eight venues from a single centralized site, with a 10km fiber reach.
Competitors in the 5G New Radio (NR) industry must provide cost-effective solutions in order to thrive and grow in a more competitive and evolving market environment. In the market, many companies are forming partnerships and working together with other market participants. They may take use of one other’s skills and resources in this way, giving their clients more comprehensive and integrated solutions. In order to expand into new areas and attract more customers, businesses are also expanding their geographical presence. Collaborations with regional players, investments in network infrastructure, and targeted marketing initiatives are all options. Some of the prominent players in the global 5G New Radio market include:
- Huawei Technologies Co., Ltd.
- Qualcomm Technologies, Inc
- Telefonaktiebolaget LM Ericsson
- Samsung
- Intel Corporation
- Cisco Systems Inc.
- Fujitsu
- NEC Corporation
- Verizon Communications Inc.
- Keysight Technologies
5G New Radio Market Report Scope:
| Report Attribute | Details |
| Market size value in 2023 | USD 42.16 billion |
| Revenue forecast in 2030 | USD 251.37 billion |
| Growth rate | CAGR of 29.1% from 2023 to 2030 |
| Base year of estimation | 2022 |
| Historical data | 2019 – 2021 |
| Forecast period | 2023 – 2030 |
| Quantitative units | Revenue in USD billion, and CAGR from 2023 to 2030 |
| Report coverage | Revenue forecast, company market share, competitive landscape, growth factors, and trends |
| Segments covered | Offering, operating frequency, architecture, application, industry, region |
| Regional scope | North America; Europe; Asia Pacific; Latin America; MEA |
| Country scope | U.S.; Canada; UK; Germany; Spain; China; India; Japan; South Korea; Australia; Brazil; Mexico; Kingdom of Saudi Arabia (KSA); UAE; South Africa . |
| Key companies profiled | Huawei Technologies Co., Ltd.; Qualcomm Technologies, Inc; Telefonaktiebolaget LM Ericsson; Samsung; Intel Corporation; Cisco Systems Inc.; Fujitsu; NEC Corporation; Verizon Communications Inc.; Keysight Technologies. |
| Customization scope | Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope |
| Pricing and purchase options | Avail customized purchase options to meet your exact research needs. Explore purchase options |
References:
https://www.grandviewresearch.com/industry-analysis/5g-new-radio-nr-market-report
Omdia forecasts weaker 5G market growth in near term, 4G to remain dominant
GSA: 5G Device Ecosystem June 2023 Summary
Highlights:
- The number of announced 5G devices rose by 1.2% between April and May 2023, reaching a total of 1,965 devices. Of these, 1,579 are understood to be commercially available, representing 80.4% of all announced 5G devices. This is an increase of 48.7% in the number of commercial 5G devices since the end of May 2022. Highlights this edition include:
- 233 manufacturers with announced available or forthcoming 5G devices
1,965 announced devices, of which at least 1,579 are understood to be commercially available
Not all devices are available immediately and specification details remain limited for some. We expect devices to continue to become more widely available and for more information about announced devices to emerge as they reach the market. - The number of commercially available devices has been growing steadily since the start of the year and should continue in this manner. GSA will continue to track and report on 5G device launches during the coming year. Its GAMBoD database contains important details about device form factors, features and support for spectrum bands. Summary statistics are released in this regular monthly publication.
By the end of May 2023, GSA had identified:
• 26 announced form factors
• 233 manufacturers with announced available or forthcoming 5G devices
• 1,965 announced devices, including regional variants, but excluding operator-branded devices that are essentially rebadged
versions of other phones. Of these, at least 1,579 are understood to be commercially available:
• 1,024 phones (up 15 from April 2023), at least 942 of which are now commercially available (up 14 from April 2023)
• 283 fixed wireless access customer-premises equipment (CPE) devices for indoor and outdoor uses, at least 183 of which are
now commercially available
• 227 modules
• 167 industrial or enterprise routers, gateways or modems
• 68 battery-operated hot spots
• 46 tablets
• 29 laptops or notebooks
• 12 in-vehicle routers, modems or hot spots
• 15 USB terminals, dongles or modems
• 94 other devices, including drones, head-mounted displays, robots, TVs, cameras, femtocells/small cells, repeaters, vehicle
on-board units, keypads, a snap-on dongle/adapter, a switch, a vending machine and an encoder
• 1,063 announced devices with declared support for 5G standalone in sub-6 GHz bands, 864 of which are commercially available.
- Not all devices are available immediately and specification details remain limited for some. We expect devices to continue to become more widely available and for more information about announced devices to emerge as they reach the market.
- The number of commercially available devices has been growing steadily since the start of the year and should continue in this manner.
- GSA will continue to track and report on 5G device launches during the coming year. Its GAMBoD database contains important details about device form factors, features and support for spectrum bands. Summary statistics are released in this regular monthly publication.
References:
GSA FWA Report: 38 commercially launched 5G FWA networks in the EU; Speeds revealed
GSA: 200 global operators offer 5G services; only 20 (Dell’Oro says 13) have deployed 5G SA core network
GSA: 5G Market Snapshot – 5G networks, 5G devices, 5G SA status
Kearney’s “5G Readiness Index 2022” and How to Monetize 5G
A new report from management consultancy Kearney analyzes a year of 5G progress across 33 countries around the world. The Kearney “5G Readiness Index 2022” assesses 5G and how close countries are to realizing all the potential and benefits of widespread 5G in the context of the overall maturity of a country’s telecoms market and its socio-economic position. The report covers 33 countries, all of which had launched 5G by the third quarter of 2022. To be included, countries must have launched 5G by the fourth quarter of 2021.
“Europe is falling behind on 5G!” is a cry we heard at the latest Mobile World Congress. The Kearney 5G Readiness Index 2021 reflected it, and our 2022 Index confirms it, at least for now (see Figure 1).
11 out of 28 countries tracked have at least one operator with a standalone 5G core network launched. Asia leads with seven countries, while Europe trails with just Finland and Germany reaching this point. Only in two countries have all operators launched standalone cores—Singapore and China—opening up their markets for a 5G transformation.
This year’s Index reveals that only 10 countries have made high band spectrum available, and operators in just five of them (the United States, Australia, South Korea, Thailand, and Japan) have launched full commercial services within it. So far, no European countries have gotten this far, although select services have been launched on limited mmWave licenses, including in Germany. The lack of availability of mmWave spectrum is disappointing because its advantages are the cornerstone of new, high speed 5G-enabled services.
The Index identified more key developments during the past year:
- The United States continues to push ahead of other countries. Its regulator has provided spectrum in all three band classes, and national operators have made the most of it by launching services. One operator has launched a standalone 5G core. Canada also has an operator offering 5G services via its new standalone core.
- South Korea, which ranked second in the 2021 Index, has dropped to fifth because it has not made low band spectrum available, despite high subscriber penetration.
- Most Nordic countries are pulling ahead, thanks to wider spectrum availability and broader deployment across bands, but Sweden is held back by the lack of mmWave spectrum as full availability of 26 GHz isn’t planned before 2025. This slows Sweden down and risks muting consumer excitement.
- Germany moved from laggard to leader of the EU4 (France, Germany, Italy, and Spain) plus the United Kingdom, thanks to operators launching 5G in multiple bands. Only one operator has launched a 5G standalone core.
- France now trails other larger European countries because of its late launch of 5G (November 2020) and customers’ apparent limited interest in it.
- A strong showing in the Middle East (Saudi Arabia, United Arab Emirates, and Qatar) is a testament to their networks’ quality and strong rollouts. Penetration is 9 to 11 percent. A Saudi operator has launched a standalone 5G core.
- Australia was one of the first countries to launch 5G, has continuously expanded spectrum access across all bands, and enjoys successful commercialization. It has 18 percent 5G penetration, the second highest in the Index.
Kearney also uncovered the following findings:
- Take-up (as a percentage of total subscribers in the first quarter, 2022) is paltry across Europe. Switzerland is the best with 13 percent but launched in April 2019. Belgium is the worst offender at 1.7 percent of connections. Take-up is 31 percent in South Korea.
- In South Korea, the government has announced a push for creating an ecosystem of companies that innovate and leverage 5G (aiming for 1,800 5G service firms by 2026). They understand operators won’t be solo drivers but enablers.
- Rollout of new capacity in the United States allows operators to launch impactful services, such as 5G fixed wireless access (FWA). One operator is using
- 5G to equip ambulances with high-quality video feeds that medical professionals can view while patients are en route.
Europe is behind, but not irreparably so. Vigilance and focus are required, together with operators’ preparation to win with 5G when their countries have reached ready status.
Monetize 5G step-by-step, building up to an ecosystem of products, services, and partners:
Currently, 5G lacks killer uses cases to drive customer uptake. Without seductive 5G products or services, people won’t see its benefits. Yet, operators wonder whether advancing investment in 5G is wise. It’s classic chicken-and-egg, but it will start somewhere, spearheaded by first-mover operators along with third-party providers that will figure out what will make everyone want 5G. Plan monetization first with small steps, and then plan the ecosystem to realize its potential.
It still may seem like early days in the 5G journey, but time grows shorter for European telcos to catch up with the United States and other markets. Getting your strategy rolling now is the only way to take advantage of the European market when it becomes fully 5G ready.
References: