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Governments have passed over $30T in stimulus since the pandemic began, of which about $3T is earmarked for ICT

1Q22 5G Telecom Market Landscape infographic

Key Insights

Government funding will incentivize communication service providers to pull forward and broaden the scope of their 5G deployments, causing demand for 5G infrastructure to reach critical mass by the middle of this decade. ​

Of the $3 trillion earmarked for ICT, TBR estimates approximately $800 billion, or nearly 27%, will be allocated for connectivity infrastructure, of which 5G is a major component. ​

Money is targeted at key areas of strategic importance, such as quantum computing, semiconductors, 5G, broadband infrastructure, edge computing, AI, IoT and other ICT-related domains. ​

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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.

Limited set of vendors to continue benefiting from China’s 5G rollout

China’s 5G deployment was the driving force behind TIS market growth in 2020

Following the temporary shutdown associated with China’s initial battle with COVID-19 in 1Q20, China’s CSPs accelerated the rollout of 5G RAN, deploying over 700,000 5G base stations in 2020, in addition to the 100,000 base stations that were rolled out in 2019. TBR believes the country is nearing peak 5G RAN deployment levels after growth for Huawei, ZTE and China Communications Services (CCS) slowed in 4Q20, but China’s investment in 5G will remain elevated in 2021, with between 600,000 and 1 million base stations set for deployment as the government makes 5G a centerpiece technology of its newest national infrastructure development initiative.

A significant and growing portion of China’s government stimulus is being allocated to enable the ICT sector to accelerate infrastructure and ecosystem development. China has earmarked over $1.4 trillion for ICT initiatives over the next five years. These investments will primarily benefit CCS, Huawei and ZTE, though Ericsson and smaller China-based vendor CICT are also taking part in 5G RAN builds. China’s government heavily influences CSPs’ contract allocation and prioritizes business for domestic firms. Huawei was allocated the bulk of business in the 5G cycle, increasing its share from the LTE cycle, and TBR expects Huawei will maintain its leading market share, despite supply chain disruptions.

TBR believes that due to stockpiling, China’s ICT ecosystem has sufficient chipsets to meet the country’s 5G RAN deployment targets in 2021, which suggests the supply chain encumbrances instituted by the U.S. government are not having a significant impact on China’s original 5G deployment timelines.

Register today for an exclusive TBR webinar examining TBR’s Telecom Infrastructure Services (TIS) Global Market Forecast for 2020-2025, including the expected market impact of unprecedented government support in telecom over at least the next five years and increasing support, and mandate, from Western-aligned governments for CSPs to swap out gear from Huawei and ZTE.

Government stimulus and enterprise digital transformation will accelerate 5G deployments

Government stimulus will accelerate 5G rollouts

An increasing number of governments worldwide are becoming directly and/or indirectly involved in ensuring new technologies, such as 5G, are widely deployed in their respective countries. This spend is, in many cases, tied to economic recovery packages to counter the impact of the COVID-19 crisis and is being justified based on economic, national security and public health grounds.

TBR’s research indicates governments worldwide will invest in excess of $2 trillion in the ICT sector over the next five years, starting in earnest in 2021. Of that $2 trillion, several hundred billion dollars will flow directly into the 5G market, primarily for the purposes of providing internet access to underserved and unserved people around the world as well as ensuring respective economies are able to transform to be relevant and competitive in the digital era.

China’s CSPs will maintain an accelerated 5G rollout in 2021; domestic vendors will be primary beneficiaries

Following the temporary shutdown associated with China’s initial battle with COVID-19 in 1Q20, China’s CSPs accelerated rollout of 5G RAN, deploying 700,000 5G base stations in 2020, in addition to the 100,000 base stations that were rolled out in 2019. China’s investment in 5G will remain elevated in 2021, with between 600,000 and 1,000,000 base stations set for deployment as the government makes 5G a centerpiece technology of its newest infrastructure development initiative.

These investments will primarily benefit China Communications Services (CCS), Huawei and ZTE, though Ericsson and smaller China-based vendor CICT are also taking part in 5G RAN builds. China’s government heavily influences CSPs’ contract allocation and prioritizes business for domestic firms. Huawei was allocated the bulk of business in the 5G cycle, increasing its share from the LTE cycle.

TBR believes China’s ICT ecosystem has sufficient chipsets to meet the country’s 5G RAN deployment targets in 2021, which suggests the supply chain encumbrances instituted by the U.S. government are not having a significant impact on China’s original deployment timelines.

CSP 5G Capex Spend 2019-2024E

The 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.