A new report by Dell’Oro Group provides a fairly positive forecast for growth in 5G New Radio (NR) investments over the coming five years, no doubt based on the flurry of activity that has been signaled by operators globally as they get ready to launch 5G on a commercial basis.
Stefan Pongratz, an analyst at Dell’Oro, noted that there are now reasons to be optimistic about the mobile infrastructure market over the next couple of years, following three consecutive years of declining revenues. 5G NR is expected to advance at a faster pace than LTE and account for the majority of the overall RAN market by 2023.
“Even if 5G will be just another G initially, the reality is that for the carriers that have the right spectrum, the business case of capitalizing on the existing macro infrastructure using Massive MIMO is extremely compelling,” Pongratz added.
In detail, Dell’Oro expects the overall RAN market will increase at a 2 percent compound annual growth rate (CAGR) between 2018-2023. The group added that even through the growth rates have not changed much since the last forecast update, “cumulative revenue projections for the 2018-2022 period have been adjusted upward to reflect a stronger 2018 than previously expected, as well as improved 5G momentum. Within the mix, we have adjusted the 5G NR projections upward and the LTE forecast downward.”
The primary drivers of growth remain broadly the same, and include robust data traffic growth for mobile broadband (MBB) applications coupled with the rapid shift toward 5G; new capex to address IoT, fixed wireless access (FWA), in-building coverage, and public safety opportunities for both private and public deployments; and the shift toward active antennas, which Dell’Oro said will shift capex from the antenna to the RAN market.
The group further noted that the Asia Pacific region is expected to grow at the fastest pace, reflecting strong growth in China. “The growth rates outside of China are expected to be more muted. Positive momentum in the North America region is expected to prevail over the next couple of years,” Dell’Oro said.
Certainly, there are plenty of signs that operators are eager to move into the 5G era, with early commercial launches by AT&T and Verizon in the U.S. as well as the three main South Korean carriers, for example. Dell’Oro added that its forecast that 5G will be deployed at a faster pace than LTE is partly based on the fact that 5G mid-band spectrum will be available sooner than LTE spectrum was made available in the 3G to 4G transition.
The Global mobile Suppliers Association (GSA) recently indicated that were 45 countries that are formally considering introducing certain spectrum bands for terrestrial 5G services, that have reserved spectrum for 5G, have announced plans to auction frequencies, or have already allocated spectrum for 5G use.