1H25 5G & 6G Telecom Market Landscape

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FWA will persist as the dominant 5G use case for operators for foreseeable future as ROI of emerging use cases for 5G SA and 5G-Advanced remains uncertain

Communication service providers (CSPs) in many countries (developed and developing) globally will leverage 5G fixed wireless access (FWA) to provide competitive high-speed broadband services. CSPs view 5G FWA as a viable and, in many cases, more cost-effective alternative to traditional fixed broadband services.
 
In many cases, FWA also provides CSPs with a time-to-market advantage versus traditional, fixed-access operators in greenfield environments such as rural areas. According to the November 2024 Ericsson Mobility Report, more than 130 CSPs globally are currently offering 5G FWA services.
 
The U.S. remains a market leader in FWA adoption as T-Mobile and Verizon recently updated their FWA customer targets to reach 12 million and up to 9 million customers, respectively, by the end of 2028. Additionally, TBR believes fiber-poor markets, such as Germany, the U.K. and India, are especially attractive candidates for 5G FWA as they provide a faster and more cost-effective way to deliver fiber-like services to end users compared to building out fiber to the premises (FTTP). TBR notes that deploying fiber everywhere is not economically feasible and that governments are becoming more aware that FWA is a viable alternative.
 
Despite its potential to generate revenue and customer growth, TBR believes FWA is largely viewed as an ancillary offering in the mobile industry and is lacking a level of attention and innovation in the market. Additionally, existing standards do not adequately account for FWA, and network architectures are not optimized to fully support this use case. Spectral efficiency technologies tailored to optimize FWA traffic could free up significant capacity on existing networks, which could then be utilized for other purposes.

Lack of a clear ROI for the private sector to justify investing sufficiently in 6G puts the fate of the technology into the hands of the government

The telecom industry continues to struggle with realizing new revenue and deriving ROI from 5G, even after five years of market development. TBR does not see a solution to this challenge, and with no catalyst on the horizon to change the situation, CSPs’ appetite for and scope of investment in 6G will likely be limited. TBR expects CSP capex investment in 6G will be subdued compared to previous cellular network generations and deployment of the technology will be more tactical in nature, which would be a marked deviation from the multihundred-billion-dollar investments in spectrum and infrastructure associated with the nationwide deployments during each of the prior cellular eras.
 
In a longer-term effort to address this situation, TBR expects the level of government involvement in the cellular networks domain (via stimulus, R&D support, purchases of 6G solutions and other market-influencing mechanisms) to significantly increase and broaden, as 6G has been short-listed as a technology of national strategic importance.
 
With that said, 6G will ultimately happen, and commercial deployment of 6G-branded networks will likely begin in the late 2020s (following the ratification of 3GPP Release 21 standards, which is tentatively slated to be complete in 2028). However, it remains to be seen whether 6G will be a brand only or a legitimate set of truly differentiated features and capabilities that bring broad and significant value to CSPs and the global economy. Either way, the scope of CSPs’ challenges is growing, and governments will need to get involved in a much bigger way to ensure their countries continue to innovate and adopt technologies deemed strategically important.
 

 

Global CSP spend on 5G infrastructure is slowly growing following a dip in 2024 as CSPs reassess their capital allocation and become more conservative

A pull forward of capex into 2023 in the U.S. and India resulted in a decline in CSP 5G capex in 2024, but slow growth will resume in 2025 as CSPs gradually deploy additional 5G base stations for coverage and capacity as well as roll out 5G core.
 
Though some CSPs will continue to test and commercially deploy the newest technologies for 5G, most CSPs are in no rush to deploy 5G Stand-alone or 5G-Advanced due to the lack of ROI-positive B2B use cases.
 
FWA is one key area that will receive increased attention and investment through the forecast period as more CSPs legitimize the technology as an economically viable means of bridging the digital divide and bringing more competitive broadband services to existing markets that have fixed access.
 

 

CSP investment in 5G infrastructure and technologies is being limited by ROI uncertainties

Phase 3: Ecosystem maturity (2025-2030)

• Most CSPs will have at least begun commercial deployments of 5G SA.
• Global operators implement 5G-Advanced, which is dependent on a 5G SA core, to realize benefits in areas including network performance, sustainability and enhanced AI/machine learning (ML) capabilities.
• Network slicing will mature and become commercialized, likely creating new 5G B2B revenue opportunities for operators.

Enterprise 5G use cases in areas including private cellular network and multi-access edge computing will gain greater traction but account for a relatively limited portion of overall CSP revenue. FWA will remain the most predominant 5G revenue-generating use case, likely contributing tens of billions of dollars in net-new revenue annually for CSPs globally.
 
The first 6G specification in 3GPP Release 21 is expected to be finalized in 2028. Initial commercial 6G network deployments are expected by 2030.

TBR assessment

CSPs are becoming more conservative about investing further in their 5G networks until they see a clear path to ROI. LTE remains sufficient for most customers, and the technology is likely to persist in the market for an extended period. This CSP approach is drawing out the migration to the new RAN architecture (e.g., open vRAN) and to 5G SA, which uses a 5G core. 5G-Advanced will lead to a slight increase in capex but will not reach anywhere near the peak levels experienced in prior years.

Scope of government support for the telecom industry will increase and persist to facilitate 6G market development

The persistent lack of ROI to justify private sector investment in 6G (and cellular networks more broadly) will ultimately push governments further into the telecom industry, prompting them to increase the scope of their involvement in the wireless technology ecosystem as well as embed these support structures more deeply in the market.
 
During the first half of the 5G cycle, governments from various countries around the world pumped many hundreds of billions of dollars in aggregate into their respective domestic technology sectors via various stimulus programs, which provide direct or indirect capital, low- or zero-interest rate loans, as well as subsidies and other means of market support. Governments have also been fostering and overseeing various consortiums and other initiatives to promote 6G market development.
 
Still, additional government backing will be required to enable the full benefits of 6G to come to fruition. Governments have a vested interest in supporting the telecom industry and the broader technology sector as the telecom industry provides innovations of societal and national security importance and serves as foundational infrastructure to support long-term economic development.