5G has been the primary focus in the telecom industry thus far in 2022. Communication service providers (CSPs) in key countries, especially the U.S. and China, continued their aggressive, nationwide public network deployments of the technology while a broad range of CSP and non-CSP entities participated in the nascent private 5G market opportunity.
Edge computing also gained momentum in the telecom industry in 2022, with select telcos such as Verizon building out edge computing environments to support their vRAN initiatives, and hyperscalers such as Amazon Web Services (AWS), Azure and Google Cloud Platforms building out metro and far edge sites at an accelerating rate.
Revenue growth from 5G and edge computing remains tepid thus far in 2022, but new use cases for these technologies are likely to emerge and scale as the digital ecosystem evolves.
Prediction No. 1: Supply-demand imbalance delays pace of 5G market development
Supply chains remain a challenge in 2022, especially for sourcing certain components such as semiconductors. But overall, the supply chain recovered over the course of the year. The ongoing zero-COVID policy in China as well as geopolitics remain a risk, but aside from a major event occurring, the supply side of the ICT industry should continue to normalize. The new focus areas in supply chains going forward are supplier diversification, friend shoring and resiliency.
Prediction No. 2: Hyperscalers scale out edge cloud
Hyperscalers have been active in the edge computing market in 2022, especially in the metro and endpoint device domains. Hyperscalers are still trying to figure out an economically and technologically feasible way to scale far edge infrastructure to support their growth initiatives. Ultimately, TBR believes hyperscalers will establish deep partnerships with shared infrastructure owners, such as towercos and data center REITs (real estate investment trusts), to site their edge stacks closer to endpoints.
Prediction No. 3: Government becomes leader in 5G spend among nontelecom verticals
Activity in the government domain to leverage private 5G networks has been significant in 2022, especially at the national level. Government entities are exploring a broad range of use cases for 5G in the disaster recovery, public safety and first responder, and defense segments of the market, and CSPs are playing a role in many of these engagements. The U.S. Department of Defense’s $600 million 5G contract remains the largest publicly disclosed contract to date globally for private 5G networks, and it will continue to support growth in the private 5G market over the next few years.
Predictions is an annual TBR series examining market trends and business changes in key markets. 2022 covered segments included cloud, telecom, devices, data center, and services & digital.