Global governments will drive 5G development through stimulus initiatives and preference for domestic suppliers

Government stimulus will advance global 5G development; government support of domestic suppliers will aid smaller vendors

Unprecedented fiscal and monetary stimulus unleashed amid the COVID-19 pandemic will fund, both directly and indirectly, a large portion of the infrastructure cost for economic digitalization. As of August 2021, TBR estimates $3.5 trillion, or around 10% of global fiscal and monetary stimulus announced to date, will funnel into the ICT market over the next five years, a few hundred billion dollars of which is earmarked for 5G-related initiatives. communication service providers (CSPs) and their suppliers will be key beneficiaries of government stimulus, which will help CSPs ease their capex and opex burdens as they migrate to a 5G network architecture and will ensure they have the capital necessary to keep their businesses going and their debt obligations satisfied.

The rise in protectionism and government sponsorship of 5G initiatives, such as open RAN, presents opportunities for smaller RAN vendors to gain share versus incumbent OEMs. A growing number of countries aim to build domestic 5G solutions and ecosystems and are leveraging protectionist government policies and pressure on CSPs to do so, which is leading to a fracturing in the 5G market. These policies are designed to address national security concerns and to drive countries toward technological self-sufficiency and away from dependency on vendors domiciled in other countries. A prime example is the U.S. government’s strong backing of domestic open RAN vendors such as Altiostar, Mavenir and Parallel Wireless. Other countries that are pursuing similar nationalistic strategies include China, the U.K., the European Union, Japan, India, South Korea, Russia, Taiwan and Vietnam.

Coopetition is increasing globally as CSPs collaborate to share 5G network resources 

CSPs are pooling network resources to ensure nationwide 5G coverage despite competitive implications. For instance, Dish Network’s new network agreement formed with AT&T will enable Dish to support its customers while it builds its own 5G network and will provide AT&T with at least $5 billion. However, the deal will likewise limit AT&T’s customer growth from relatively higher-value retail customers if Dish’s wireless business is successful in the long term.

Other global partnerships include China Mobile’s and China Broadcasting Network’s network sharing and construction agreement, South Korean operators partnering to share 5G network infrastructure in rural markets, and Russian operators agreeing to share equal access to 5G spectrum in the country.

Customer incentive to upgrade to 5G is gradually improving though monetization remains limited

Consumer adoption of 5G services is gradually increasing and subscribers are being incentivized by expanding 5G coverage availability, accelerating data speeds, aggressive 5G device promotions, and the introduction of lower-priced 5G handsets.

Monetization remains limited, however, especially in the business-to-business space due in part to the delay of 3GPP’s Release 17, which provides industry standards for key features such as network slicing. 5G is initially being monetized primarily by fixed wireless services and serving as an incentive for customers to migrate to more expensive service plans.

TBR’s 5G Telecom Market Forecast details 5G trends among the most influential market players, including both suppliers and operators. This research includes current-year market sizing and a five-year forecast by multiple 5G market segments and by geographies well as examines growth drivers, top trends and leading market players. TBR’s 5G Telecom Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

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