Global spending on 5G network infrastructure nearly doubled in 2020

According to the latest forecast from Gartner, global 5G network infrastructure market revenue will almost double to $8.1 billion by 2020.

Total wireless infrastructure revenues are expected to decline 4.4% to $38.1 billion in 2020. Communications service providers’ (CSP) investments in 5G network infrastructure accounted for 10.4% of total wireless infrastructure revenues in 2019. This figure will reach 21.3% in 2020 (see 2020 Table 1).

“Investment in wireless infrastructure continues to gain momentum as more CSPs repurpose existing assets including radio spectrum bandwidth, base stations, core networks and transport networks, and transition LTE/4G spending to maintenance mode,” said Kosei Takiishi, senior research director at Gartner. “Early 5G adopters are driving more intense competition among CSPs. In addition, governments and regulators are promoting mobile network development, betting that it will be a catalyst and multiplier for broad economic growth across many industries.”

Increasing competition among CSPs is leading to an accelerated pace of 5G applications. The new O-RAN (open radio access network) and vRAN (virtualized RAN) ecosystems can break the current vendor lock-in and promote the adoption of 5G by providing cost-effective and flexible 5G products in the future. Gartner predicts that by 2023, CSPs in Greater China (China, Taiwan and Hong Kong), mature Asia Pacific, North America and Japan will achieve 5G coverage in 95% of the population.

Table 1: Global wireless infrastructure spending forecast, 2019-2020 (US$ million)

Segment 2019 growth (%) 2020 growth (%) 5G LTE and 4G third generation 2G small cell mobile core total

Due to rounding, some numbers may not add exactly to the totals shown.

Source: Gartner (July 2020)

“Although the investment growth rate for 5G has declined slightly in 2020 due to the COVID-19 crisis (excluding Greater China and Japan), CSPs in all regions are rapidly shifting new, discretionary spending to build out 5G networks and 5G as a platform,” said Mr. Takiishi.

In the short term, Greater China leads the world in 5G development, with 49.4% of global investment in 2020 coming from the region. Cost-effective infrastructure manufactured in China, coupled with state sponsorship and reduced regulatory barriers, has paved the way for major Chinese CSPs to quickly establish 5G coverage. "However, other early adopting and technologically proficient countries are not far behind," said Mr. Takiishi.

Gartner expects 5G investments to rebound modestly in 2021 as CSPs seek to capitalize on behavioral changes driven by the population’s increased reliance on communications networks. 5G investments will surpass LTE/4G in 2022.

CSPs will gradually add standalone (SA) capabilities to their non-standalone (NSA) 5G networks, and Gartner predicts that by 2023, 15% of CSPs worldwide will be running standalone 5G networks that do not rely on 4G network infrastructure. This will quickly shift wireless investments from LTE/4G, and spending on traditional RAN infrastructure will decline rapidly.