Post COVID-19, the "COVID-19 Impact on 5G Infrastructure Market by Communication Infrastructure (Small Cell and Macro Cell), Core Network Technology Type (SDN and NFV), End-User (Commercial, Residential, Government, Industrial), and Region - Global Forecast to 2025" size is estimated to grow from USD 12.6 billion in 2020 and projected to reach USD 44.9 billion by 2025, at a CAGR of 29.0%. The projection for 2025 is estimated to be down by 22.7% as compared to pre-COVID-19 estimation. The major factors driving the growth of the 5G infrastructure market include an exponential rise in data traffic, the need for high data transfer speed with low latency, rising adoption of IoT devices, and increasing adoption of M2M connections across various industries. However, supply chain disruptions, delay in the release of 5G specifications, and China-US trade war will result in lower market projection compared to Pre COVID-19 estimation.
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“Shutdown of production facilities impacted the production and sales of 5G smartphones.”
Increasing the 5G subscriber base will be the major revenue contributor to the telecommunication operators during the forecast period. The 5G infrastructure market is expected to be driven by 5G enables smartphones and increasing implementation of home automation technologies. Smart home synchronized watches, smartphones, and fitness apps are gaining traction and are expected to grow with the speed and performance capabilities of 5G. COVID-19 has adversely impacted smartphone production. Several smartphone OEMs were supposed to launch 5G smartphones for mass consumers, which could have led to the aggressive deployment of base stations worldwide. However, smartphone production has halted temporarily; the smartphone shipment is declining month-on-month, with a 35% decline in January and another 55% in February 2020. Closure of retail stores and self-isolation has further impacted the sales of 5G smartphones. Consumers and enterprises are expected to show a lack of interest in the adoption of 5G technology due to financial instability as the technology comes with a cost.
“Delay in the release of 5G specifications has resulted in a slowdown in the development of 5G ecosystem.”
In March 2020, 3GPP, the global association developing the world’s 5G technology, announced a three-month delay in the timeline for the completion of 5G specifications: Releases 16 and 17. Currently, 5G network deployments are based on Release 15, which largely relies upon 4G networks as the backbone for “non-standalone” 5G services. Delay in Releases 16 and 17 will result in the slowdown of the commercial development 5G devices and 5G deployments.
“Telecommunication authorities of several countries have postponed the 5G spectrum, which will delay 5G rollout plans thereby affecting the 5G infrastructure market.”
Several telecommunication operators and government authorities have delayed the 5G rollout plans and spectrum auction. For instance, in India, DoT (Department of Telecommunication) has postponed 5G spectrum auction to next year. On 17 February 2020, Brazilian telecoms regulator Anatel launched a public consultation to discuss the rules of 5G spectrum auction, which was scheduled to be held in March but is delayed due to COVID-19. This is adversely impacting the 5G rollout plans of telecommunication operators.
Key Market Players
Some of the major players in the 5G infrastructure industry are Ericsson (Sweden), Huawei Technologies Co., Ltd. (China), Nokia Networks (Finland), Samsung Electronics Co., Ltd. (South Korea), and ZTE Corporation (China), among others. These players account for the majority of the global 5G infrastructure market share.
The impact of COVID-19 on Ericsson and Nokia will be high as the majority of these vendors have 5G contracts in the US and European countries. In 2020 and 2021, the majority of the market will be driven by the aggressive 5G rollout plans by Chinese telecommunication operators. These telecommunications operators mainly prefer domestic vendors instead of Nokia and Ericsson. The majority of the 5G contracts released by Chinese telecommunication operators have been offered to Huawei and ZTE, with a remaining few to Nokia, Ericson, and Samsung.
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