Revenue generated from 5G infrastructure will nearly double to $4.2 billion next year, as operators around the world begin to launch next-generation network services, says Gartner.
The first commercial 5G services went live last year in the US, with South Korea, the UK and Switzerland among several nations to follow suit. In the UK, EE and Vodafone offer mobile 5G networks, while Three has a Fixed Wireless Access (FWA) broadband services.
Globally, Gartner believes seven per cent of operators have already deployed 5G infrastructure in their networks ahead of expanded rollouts over the next two years
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Last year, just $613 million was generated by 5G, a figure that is expected to increase to $2.2 billion in 2019. By 2021, revenues will reach $6.8 billion, say analysts.
Investments have so far focused on 5G New Radio (5G NR) equipment, which uses the same core infrastructure as LTE. However starting next year, operators will start to deploy ‘standalone’ 5G that uses a new core network.
The use of a 5G core will reduce operating costs for telcos and significantly lower latency – a development which will enable a whole host of new enterprise applications and revenue opportunities.
“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 technology. This enables them to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G core network infrastructure.”
Gartner believes 5G will account for six per cent of telco revneues in 2019, before increasing to 12 per cent in 2020. However, although coverage will expand significantly, analysts believe rollout will be slower than 3G and 4G.
“National 5G coverage will not occur as quickly as with past generations of wireless infrastructure,” added 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.”
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Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.