Gartner Group – Technology Blog

Gartner: Worldwide 5G Network Infrastructure Revenues to hit $4.2bn in 2020

Posted on August 30, 2019 by Alan Weissberger

Executive Summary:

Gartner Group forecasts that the worldwide 5G wireless network infrastructure revenue will double between 2019 and 2020. [That’s really amazing since the IMT 2020 standard for 5G RIT/SRITs won’t be completed till December 2020. That means each and every 5G pre-standard deployment is proprietary to the wireless network operator].

The market research firm has predicted that the global 5G network infrastructure revenue will reach $4.2bn in 2020, an 89% increase from 2019 revenue of $2.2bn.

Additionally, Gartner forecasts that investments in 5G network infrastructure will account for 6% of the total wireless infrastructure revenue of communications service providers (CSPs) in 2019, and that this figure will reach 12% in 2020.

Gartner believes that 7% of CSPs across the globe have already deployed 5G infrastructure in their networks. However, all of those pre-IMT 2020 standard 5G networks use different frequencies and require a LTE network for the control and management planes.

“5G wireless network infrastructure revenue will nearly double between 2019 and 2020,” said Sylvain Fabre, senior research director at Gartner.

“For 5G deployments in 2019, CSPs are using non-stand-alone (NSA) technology. That means LTE signaling, EPC (LTE mobile packet core) and LTE based network management. In most, but not all 5G deployments 3GPP release 15 “5G NR” is used for the data plane.

3GPP 5G New Radio NSA enables wireless network operators to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G-LTE core network infrastructure.”

In 2020, CSPs will roll out stand-alone 5G technology, which will require 5G NR equipment and a 5G core network.

Table 1: Wireless Infrastructure Revenue Forecast, Worldwide, 2018-2021 (Millions of Dollars)

Segment

2018

2019

2020

2021

LTE and 4G

Small Cells

Mobile Core

612.9

1,503.1

5,578.4

20,454.7

4,785.6

4,599.0

2,211.4

697.5

3,694.0

19,322.4

5,378.4

4,621.0

4,176.0

406.5

2,464.3

18,278.2

5,858.1

4,787.3

6,805.6

285.2

1,558.0

16,352.7

6,473.1

5,009.5

Total

37,533.6

35,924.7

35,970.5

36,484.1

Due to rounding, figures may not add up precisely to the totals shown.

Source: Gartner (August 2019)

………………………………………………………………………

5G services will launch in many major cities in 2019 and 2020, Gartner predicts, and services have already begun in the U.S., South Korea and some European countries, including Switzerland, Finland and the U.K. CSPs in Canada, France, Germany, Hong Kong, Spain, Sweden, Qatar and the United Arab Emirates have announced plans to accelerate 5G network building through 2020.

5G networks are expected to expand the mobile ecosystem to cover new industries, such as the smart factory, autonomous transportation, remote healthcare, agriculture and retail sectors, as well as enable private networks for industrial users.

CSPs Will Increasingly Aim 5G Services at Enterprises:

Although consumers represent the main segment driving 5G development, CSPs will increasingly aim 5G services at enterprises. 5G networks are expected to expand the mobile ecosystem to cover new industries.

Equipment vendors view private networks for industrial users as a market segment with significant potential. “It’s still early days for the 5G private-network opportunity, but vendors, regulators and standards bodies have preparations in place,” said Mr. Fabre. Germany has set aside the 3.7GHz band for private networks, and Japan is reserving the 4.5GHz and 28GHz for the same. Ericsson aims to deliver solutions via CSPs in order to build private networks with high levels of reliability and performance and secure communications. Nokia has developed a portfolio to enable large industrial organizations to invest directly in their own private networks.

“National 5G coverage will not occur as quickly as with past generations of wireless infrastructure,” said Mr. Fabre. “To maintain average performance standards as 5G is built out, CSPs will need to undertake targeted strategic improvements to their 4G legacy layer, by upgrading 4G infrastructure around 5G areas of coverage. A less robust 4G legacy layer adjoining 5G cells could lead to real or perceived performance issues as users move from 5G to 4G/LTE Advanced Pro. This issue will be most pronounced from 2019 through 2021, a period when 5G coverage will be focused on hot spots and areas of high population density.

This will be most evident between 2019 and 2021, when 5G coverage will primarily be used for hot spots and better coverage of high population density.

Key Challenges for 5G in the enterprise:

The potential performance benefits of 5G networks intrigue enterprises, but service providers have provided few granular details about the availability and full specifications of existing and planned 5G coverage, compatible endpoints and planned 5G corporate service plan structures.
Providers’ plans regarding pricing and service plan structures for 5G beyond initial launches remain unclear.
Mobile providers have not aligned their early performance claims for 5G with concrete plans to offer guarantees for throughput speeds, latency, network availability and security.
Enterprises with planned applications or use cases that are reliant on 5G attributes report getting little carrier guidance on how to implement or integrate with incipient 5G networks.

CSP Migration from Network Services to Digital Services:

Different access technologies will support the requirements of different connectivity use cases (such as using network as a service).

Network services remain important for CSPs that are diversifying into adjacent digital services. However, their most strategic asset will be the real-time information about network usage and behavior, which can be used to optimize experience based on context (such as mobile self-organizing networks do, for instance). This information also improves decision making for further infrastructure investment for capacity and performance. A drive to open-source infrastructure and software is also prevalent, not only in the core network elements, but also increasingly in the radio access.

References:

https://www.gartner.com/en/newsroom/press-releases/2019-08-22-gartner-forecasts-worldwide-5g-network-infrastructure

Worldwide 5G Network Infrastructure revenues set to hit $4.2bn mark in 2020

https://www.telecomstechnews.com/news/2019/aug/27/global-5g-revenues-likely-reach-34bn-2020-says-gartner/

https://www.mobileeurope.co.uk/press-wire/global-5g-network-infrastructure-revenue-to-hit-4-2bn-in-2020

https://www.gartner.com/document/3939748?ref=solrAll&refval=229372094&qid=bc5ed57de8ed9ba83ae92cd

(Gartner subscription required)

Gartner: Enterprise Network Service Prices Continue to Decline

Posted on February 22, 2019 by

Prices for enterprise fixed and mobile network services around the globe have declined from 2017 through 2018 by up to 20%, with further declines expected through 2019. Highlights:

Since 2012, overall network service prices in the developed world have declined by 5% to 20% annually, depending on the specific service and geography, but enterprises often fail to achieve the full potential savings.
Prices for nonstandard or legacy network services see little decrease or even increases.
Although network technology improvements can reduce an operator’s cost of delivering service, network service providers (NSPs) will only pass on savings to customers when they’re pressured to do so.
By 2020, 10 Mbps Ethernet access to Multiprotocol Label Switching (MPLS) or internet services will be priced lower than T1 or E1 access to the same services, from a premium of up to 1.5 times today’s T1/E1 price.
By 2020, MPLS pricing in mature markets will equalize with business-grade internet services, down from the 10% to 20% premium in 2018.
By 2020, the cost of 5G enterprise cellular services will be priced at a premium of 10% or less above 4G cellular services.

There is considerable country-to-country variation within regions. The countries with a greater degree of competition (three or more viable choices for a service) have seen larger price decreases than countries that have little or no competition. We have noted with an asterisk (*) the regions in which there is either too little data or where large variations in pricing exist, negating any meaningful “average” price trend.

…………………………………………………………………………………………………………………………………………………………………………………………..

The North American telecommunications market is very mature, with highly competitive conditions. Within all five service group categories, there are more than three providers. Since the competitive landscape has seen some consolidation, the only truly viable way for Gartner clients to take advantage of these conditions is to create a competitive RFP.

T1 or any other TDM-based access to any network services should be treated as legacy and only used when no other access services are available. These prices are not changing, and Gartner predicts they could possibly increase in the near future as providers are eager to shed those amortized assets.
The pricing of MPLS and direct internet access, over optical Ethernet access, continues to converge with internet access typically not more than 10% to 15% cheaper than MPLS, while Ethernet services remain significantly cheaper. Broadband internet access pricing is not decreasing significantly, although average speeds are continuing to increase, as are the number of providers in the market.
SIP trunking is fully mature, and existing ISDN lines should be replaced with SIP as soon as the contractual opportunity arises.
Cellular is a mature service, with 4G LTE the default network technology for most voice, messaging and data plans. While 3G network fallback still is available for areas of weak 4G coverage, providers do not differentiate service plans or prices for the two technologies. Data plan cost reductions primarily have occurred due to more competitive negotiated discounts from standard or rate card prices. Standards-based 5G technology providing higher data speeds, lower latency and the ability to support significantly higher cellular endpoint density than 4G LTE will begin commercial availability in 2020 and later.

…………………………………………………………………………………………………………………………………………………………………………………………………………

Recommendations:

Avoid sourcing services that are not part of provider’s standard portfolio, even if this means accelerating the depreciation of nonstandard devices or losing some functionality of nonstandard configurations.
Migrate away from legacy network services, even if it means replacing edge devices, while seeking improved pricing from the provider in return for adopting the current offerings.
Ensure you are fully aware of any end-of-life announcements for network services you are using and aim to migrate away from such services.

Gartner Group: Enterprise WAN Recommendations & Predictions

Posted on January 17, 2019 by

Key Findings:

As enterprises increasingly rely on the internet for WAN connectivity, they are challenged by the unpredictable nature of internet services.
Enterprises seeking more agile WAN services continue to be blocked by network service providers’ terms and conditions.
Enterprises seeking more agile network solutions continue to be hampered by manual processes and cultural resistance.
Enterprise’s moving applications to public cloud services frequently struggle with application performance issue

Recommendations:

IT leaders responsible for infrastructure agility should:

Reduce the business impact of internet downtime by deploying redundant WAN connectivity such as hybrid WAN for business-critical activities.
Improve WAN service agility by negotiating total contractual spend instead of monthly or annual spend.
Improve agility of internal network solutions by introducing automation of all operations using a step-wise approach.
Ensure the performance of cloud-based applications by using carriers’ cloud connect services instead of unpredictable internet services.
Improve alignment between business objectives and network solutions by selectively deploying intent-based network solutions.

https://www.gartner.com/document/3837967?ref=solrAll&refval=214376480&qid=34247aea1a93a7c1348f772a6c3e155a

Gartner Group Innovation & Insight: Cutting Through the 5G Hype

Posted on December 12, 2018 by

Executive Summary:

Most 5G deployments will initially focus on islands of deployment, without continuous national coverage through 2022. Enterprise architecture and technology innovation leaders must adapt digital business initiatives to the available network services.

Key Findings:

Despite service provider hype, most 5G rollouts will initially focus on islands of deployment. Broad availability of full-function public 5G from CSPs is unlikely before 2023, putting some digital business plans at risk — unless private networks are rolled out.
Early public 5G deployments will be spotty in coverage, but will satisfy some enterprise use cases such as high-speed fixed wireless access.
Enterprises may choose to deploy private 5G networks to address specific needs such as upgrading factory, stadium or warehouse networks. This may leverage Wi-Fi for access and 5G for the backbone.
Application use-case requirements (such as latency) must be clearly defined, so alternatives to 5G can be considered where applicable. In many cases, Proto-5G (an enhanced 4G) will be good enough to satisfy application use cases.

Recommendations:

Enterprise architecture and technology innovation leaders responsible for accelerating enterprise infrastructure innovation and agility should:

Incorporate realistic networking assumptions for business plans by working with business leaders and network service providers to identify the availability of required advanced wireless services such as Proto-5G and 5G.
Address current use-case requirements by identifying where 5G alternatives such as Proto-5 G can be leveraged when and where 5G is unavailable or too expensive.

Strategic Planning Assumption:

Less than 45% of CSPs (Communications Service Providers) globally will have launched a commercial 5G network by 2025.

Analysis:

To optimize their planning and deployment decisions, enterprise architecture and technology innovation leaders need to understand when advanced cellular network technologies will be available, and how they can be beneficial to their organizations (see Figure 1). Deployments of 5G will not be consistently available worldwide, but enhanced 4G (referred to collectively as “Proto-5G” in this research) may suffice for some use cases, and 4G radio may be combined with edge computing and core network slicing.

Adding to the confusion about 5G availability is the fact that many CSPs are claiming that everything they deploy is 5G. However, what they deploy may be little more than rebranded or advanced LTE, or a subset of 5G that is deployed in a very limited footprint.

Ubiquitous availability of 5G will be hampered by the following:

5G deployments will take more than twice as long as 4G/LTE because higher-frequency radio spectrum is required. This will force deployment of large numbers of new cellular radios.
Spectrum allocation is progressing slowly.
4G/LTE is successful and profitable.
There are no killer applications to pay for the required investment.

Network-based CSPs in North America, Greater China and Japan will launch projects to complete 90% of nationwide 5G population coverage by 2023. CSPs in Western Europe will achieve similar coverage by 2026, while other regions will not achieve the same coverage until after 2026.

Technological variation in frequency bands worldwide means that the deployment timelines and benefits will vary by geography (see Figure 1).

Figure 1. Estimated Timing of 5G Network Launches

Source: Gartner (December 2018)

Definition:

5G is the next-generation cellular standard after 4G. It has been defined across several global standards bodies, including the International Telecommunication Union, 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.

Description:

For the first time in cellular technology development, 5G represents a shift in focus to go beyond consumer handsets to address the networking needs of a much broader group of wireless devices with very divergent requirements (see Figure 2).

Figure 2. Three Technology Pillars of 5G

AR/VR = augmented reality/virtual reality; eMMB = enhanced mobile broadband; IoT; Internet of Things; mMTC = massive machine-type communications; URLLC = ultrareliable and low-latency communication

Source: Gartner (December 2018)

…………………………………………………………………………………………………………………………………………………………………………….

Blending the following three capabilities will allow 5G to address multiple use cases, although the implementations for each use case may be very different.

eMBB: High-throughput data transfer, with maximum speeds of 20 Gbps for downlink (although initial deployments will fall between 4 Gbps and 8 Gbps) and 10 Gbps for uplink.
mMTC: Targets support of up to 1 million low-power nodes per square kilometer.
URLLC: End-to-end cellular network latency of 5 ms or less.

From an enterprise perspective, 5G may serve as an alternative to landline connections for branch-office networks, as a replacement for some in-building networks or as a way to reach dispersed fixed (sensors) and mobile (vehicles) endpoints. Mobile voice and text messaging are not target use cases for 5G.

The Evolution of 4G Versus the Promise of 5G:

While much has been made of the advanced capabilities that will be provided by 5G networks, the reality is that Proto-5G, which is still 4G, is good and getting better. As Table 1 shows, Proto-5G is a kind of 4G-extended technology mainly for data communication and IoT connectivity support. In some, or even many, cases, Proto-5G capabilities may be good enough to support your emerging applications. As CSPs deploy 5G, migration to this new service may require equipment refresh.

Table 1: Proto-5G (Enhanced 4G) Compared to Existing 4G and 5G Wireless Access in the Future

Feature	4G	Proto-5G	5G Wireless Access
Requirement and Target	Up to several hundred Mbps downlink throughput About several tens of ms latency	More than 500 Mbps downlink throughput About 10 ms latency IoT connectivity support	More than 10 Gbps downlink throughput About 1 ms latency URLLC support
Frequency	Licensed (less than 6GHz)	Licensed and unlicensed (less than 6GHz)	Millimeter waves, in addition to Proto-5G’s frequency bands
Device IoT Support	LTE user equipment Cat. 1	LTE user equipment Cat. 0, M1 and NB-IoT	To be discussed in the technology standards
LTE = Long Term Evolution; URLLC = ultrareliable and low-latency communication

Source: Gartner (December 2018)

Deployments of 5G will occur over several years, and with multiple versions with very different capabilities because equipment vendors (Ericsson, Fujitsu, Huawei, NEC, Nokia, Samsung and ZTE) have their own evolutionary roadmap from 4G: LTE, to Proto-5G, to 5G. This will lead to inconsistent service across markets and carriers.

Benefits and Uses:

The benefits of 5G will evolve as the technology matures. In the short term, 5G will deliver higher bandwidth and lower latency connections, in many cases, in the form of fixed wireless access networks and early IoT networks.

In a shift from traditional cellular deployments, organizations will benefit from private network deployments that replace or augment campus Wi-Fi networks and wired in-building networks for applications such as factory automation and surveillance.

This deployment will be driven by 5G’s increased bandwidth, lower latency and support for IoT devices, as well as by the flexibility afforded by operating on unlicensed frequencies.

A recent Gartner survey indicates that, enterprise leaders have a broad awareness of 5G and have identified primary use cases (see Figure 3).

The figure shows that 5G-capable networks are expected to be most broadly used for IoT communications and video, including 4K and 8K video streaming to mobile devices, or ultrahigh definition wireless, closed-circuit TV applications.

Figure 3. Expected Use for 5G-Capable Networks

AR = augmented reality; VR = virtual reality

Source: Gartner (December 2018)

The 5G support of a massive number of endpoints will enable IoT applications such as dense sensor networks for agriculture optimization. Improved operational efficiency is cited as the reason to deploy 5G for noncritical sensors, fixed wireless access, IoT communications and video. The 5G-capable networks are expected to be most broadly used for IoT communications and video. Controls/automation, fixed wireless access, high-performance edge analytics, and location tracking are a second tier of uses for 5G-capable networks.

Figure 4 shows use cases that benefit from improved operational efficiency enabled by 5G.

Figure 4. Use Cases for Deploying 5G-Capable Networks for Operational Efficiency

Source: Gartner (December 2018)

In many cases, 5G is linked to organizations’ edge computing deployments, which are driven by digital business initiatives. Bandwidth- and latency-sensitive applications benefit from placing compute as close as possible to the wireless client device, especially when bandwidth is constrained from the edge back into the core. As a result, many enterprises may find it advantageous to leverage emerging CSP edge computing services (see Figure 5).

Figure 5. Migration to 5G Will Enable Emerging Edge Computing Applications

P2P = peer-to-peer; VNFs = virtualized network functions

Source: Gartner (December 2018)

Migration to 5G Will Enable Emerging Edge Computing Applications

Over the longer term, 5G deployments will deliver multigigabit bandwidth and extremely low latency. When combined with dense coverage, which will require a dramatic increase in the number of antenna deployed, 5G promises enablement of new services, including mobility-enhanced AR/VR and autonomous vehicles. AR, VR, immersive video or holograms, and smart city are key use cases being deployed primarily to drive new service provider revenue.

Figure 6. 5G Use Cases That CSPs Expect to Drive New Revenue

Source: Gartner (December 2018)

Adoption Rate:

From 2018 through 2022, organizations will mainly utilize 5G to support IoT communications, high-definition video and fixed wireless access. Use of higher frequencies and massive capacity will require very dense deployments with higher frequency reuse.

As a result, Gartner expects most 5G deployments to initially focus on islands of deployment, without continuous national coverage, typically reaching less than full parity with existing 4G geographical coverage by 2022 in developed nations.

In addition, slower adoption of 5G by CSPs (compared to 4G) means less than 45% of CSPs globally will have launched a commercial 5G network by 2025 (see Table 2).

Table 2: Representative Sample of 5G Deployments and Expected Use Cases to Be Supported

Country	CSP	Launch Target	Use Cases and Demos
U.S.	Verizon	October 2018 and broader rollout in 2019	Fixed wireless access 4K VR in 5G trial at Indianapolis 500 Verizon and KT test of the world’s first 5G live hologram call
	AT&T	AT&T plans to be the first U.S. company to introduce mobile 5G service in 12 cities in 2018.	Fixed wireless access
	T-Mobile	Build out 5G in 30 cities in 2018 and 2020 l for full nationwide coverage	LTE enhancement
	Sprint	5G commercial services and devices by 1H19	LTE enhancement
South Korea	SK Telecom	Commercial launch March 2019	5G connected car trial with Ericsson and BMW
	KT	Official 5G provider of the Pyeongchang Winter Olympics Commercial launch March 2019	Olympic network showcases 5G eMBB Immersive 5G broadcasting 5G safety (drones and facial recognition)
	LG U+	Commercial launch March 2019	N/A
Japan	NTT DOCOMO	NTT DOCOMO will start 5G preservice in September 2019 and launch commercial service in spring 2020.	8K live broadcast with NHK at the 5G trial site in Tokyo Skytree Town
	KDDI	Commercial launch in 2019 and massive deployment from 2020	VR, 8K
	SoftBank	Commercial launch in 2019	Immersive video, remote control of robots
China	China Mobile	Commercial 5G services in 2020	N/A
	China Telecom	Commercial 5G services in 2020	N/A
	China Unicom	Commercial 5G services in 2020	N/A
Europe	EE in the U.K.	In late 2019	N/A
	Deutsche Telekom in Germany	Strong preparation course for 5G rollout in 2020	N/A
	Telia in Finland	Target 2019 for commercial rollout of 3.5GHz	Initial demo in Helsinki in 2018
	Vodafone in the U.K.	Vodafone is gearing up for a full commercial launch of 5G services in mid-2019 and expects to have about 1,000 5G mobile sites in service by 2020.	N/A
	Telefónica in Spain	2020	Working with SEAT and FICOSA on connected car applications Working on tourism use cases with Fitur
	TIM in Italy	First 5G use cases made available in June 2018, and full rollout in Bari and Matera to be completed during 2019.	3D virtual reconstructions of archaeological sites and museums in Matera, Italy. In Bari, Italy, the technology would allow for “better management of logistics and transport.”
	Swisscom in Switzerland	Swisscom plans to introduce 5G at select sites in 2018. Extensive coverage can be expected in 2020.	N/A
Middle East	Etisalat in UAE	Per a 14 May 2018 announcement, fixed devices and services will be available from September 2018 with the service gradually extended across the UAE.	5G has applications for autonomous driving, networking vehicles, industrial automation and IoT.
	Ooredoo in Qatar	Per a 14 May 2018 announcement, the first Ooredoo 5G site was launched, just days after Ooredoo’s new 5G Commercial Core Network was activated.	The 5G Supernet will support new applications, including driverless cars and smart roads, virtual and augmented reality, and a national fleet of service drones.
	STC in Saudi Arabia	Per a 16 May 2018 announcement, the company will continue building the network gradually in Saudi Arabian cities until the 5G-capable devices are available during 2019.	5G will enable uses such as IoT, artificial intelligence and robots.
eMBB = enhanced mobile broadband; IoT; Internet of Things; N/A = not available; UAE = United Arab Emirates; VR = virtual reality

Source: Gartner (December 2018)

Risks:

Business plans that depend upon 5G availability face multiple risk factors related to 5G availability and inconsistency of services, including:

Service provider hype will convince business leaders that 5G is broadly available well ahead of actual deployments.
Differences in Proto-5G technologies will lead to inconsistent solutions across providers and regions.
CSP capital expense budgets are constrained, which will slow deployments in all but the highest-demand locations and for the applications that generate immediate service provider revenue.
Full-featured 5G requires a 4x increase in antenna density and an upgrade of the entire antenna to radio access node network, which will be challenging in cities due to existing buildings and lack of rights of way.

Acronym Key and Glossary Terms:

AR	augmented reality
CSP	communications service provider
ITU	International Telecommunication Union
LTE	Long Term Evolution
ms	millisecond
RAN	radio access network
URLLC	ultrareliable and low-latency communication
VR	virtual reality