A new Gartner report has indicated that 5G infrastructure spend is set to boom over the next 12 months. With investments in 5G expected to generate significant returns, will the telecoms industry finally see a resurgence?
Network infrastructure vendors have struggled over the last few years since telcos reined in their infrastructure spending to boost their bottom lines. However, this may be all set to change as 5G breathes new life into an industry that has been in the doldrums. According to new research from Gartner
, spending on 5G wireless network infrastructure is set to double between 2019 and 2020.
The report identifies how CSPs are using non-standalone technology for 5G deployments that makes it easier for them to launch 5G services quickly, with 5G New Radio Equipment functioning alongside existing 4G network infrastructure.
Gartner predicts that CSPs will have increased 5G spending from $612 million in 2018 to $2.2 billion by the end of 2019. These numbers are then expected to rise to $4.1 billion in 2020 and $6.8 billion in 2021. While telcos will continue to spend on improving existing 4G networks, the expectation is that vendors will be pushing them forward with their 5G investments as soon as possible.
5G networks have already been launched in countries such as the UK, US and South Korea, and the 5G race is only expected to heat up in the next 12 months as more operators join the fray in other countries.
Network vendors are set to profit from the new gold rush as more companies join the 5G race and others upgrade their 4G infrastructure to improve performance. According to Gartner analyst Sylvain Fabre, CSPs will need to invest in the legacy 4G layer, by upgrading infrastructure around 5G areas of coverage. A legacy 4G layer adjoining new 5G infrastructure could lead to performance issues, resulting in a poor 5G user experience.
Nevertheless, increased spending on network infrastructure provides no guarantees of higher revenue for CSPs. For this, they must also decide on their 5G monetisation and pricing strategies, whether that be targeted enterprise solutions based on network slicing, new tiered pricing schemes for consumers or innovative subscription bundles.
However, traditional BSS platforms are typically not agile enough to respond quickly to the evolving 5G landscape and operators risk jeopardising their network investments without a joined up network and BSS strategy.
Find out more about the impact of 5G in our blog series - 5G: Driving change for BSS - Part 1 and Part 2.
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