‘Enormous’ growth prospects for 5G in enterprises

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A study by recently launched research firm Omdia has revealed the huge shift for communications service providers (CSPs) and the wider tech ecosystem that will be created by the wider adoption of 5G products and services.

The analyst says that the report, 5G and beyond: Connecting the dots at MWC20, aims to “connect the dots” between the strategies, technologies, companies and market trends that are impacting industries as they transition to 5G, providing an overview of the interrelated opportunities and challenges.

As well as predicting that 5G will take the consumer market by storm, with 5G-enabled smartphone shipments expected to grow eight-fold by 2021, Omdia believes the growth prospects for 5G in enterprises are “enormous”, with global 5G enterprise mobile subscriptions set to rise from 500,000 in 2019 to 175 million by 2024.

It predicts that the global 5G smartphone market will surge to 231 million units shipped by the end of 2020, up from 29 million in 2019, and will double again in 2021. Omdia says this growth will be driven by declining device costs, which will be in the $700-$800 range in the next two years, making them more affordable.

The report calculates that a wide range of industries are investing in private 5G networks and that about two-fifths of the enterprise 5G network deployments announced since 2016 are for manufacturing, followed by 18% in transportation and logistics.

Omdia suggests that brands will use 5G to ease privacy fears around artificial intelligence (AI), driving revenue growth to $827bn in 2025 for edge devices and networks deployed for AI.

By 2025, it says, two or three smartphones will include built-in AI capabilities, and global revenue for AI smartphones will increase to $378bn from $29bn in 2017.

Omdia adds that to alleviate consumers’ privacy concerns, smartphone and smart speaker manufacturers will introduce 5G products that perform visual AI processing tasks on edge servers and appliances, bypassing the privacy risks involved in sending data to the cloud.

The survey also predicts that the global 5G radio access market (RAN) will more than quintuple, rising from less than $4bn in 2019 to $21bn in 2024. The analyst sees the proliferation of 5G RANs as a critical element in the establishment of an end-to-end architecture for 5G that will enable the delivery of advanced services for diverse markets, including factory automation and self-driving cars.

It is perhaps in this last regard why the UK government was so keen not to disturb the essential equipment equilibrium within the RANs of the country’s operators after it decided not to allow the likes of Huawei and other so-called at-risk vendors from supply technology for the core. The price of the changes that have been mandated – in addition to bans from the core, such suppliers will be limited to providing up to 35% of technology in use in UK communications radio networks – is potentially huge.

BT has calculated that it could spend up to £500m in adhering to the policies laid down by the UK government, and Vodafone believes that by doing the same in the UK and following similar guidelines in the EU, it will take a hit of €200m over the next two years.


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