5G innovation fuelling deal flow and growth pipelines

The industry may have just clocked up its effective fifth birthday, but 5G network infrastructure growth is just getting underway, and will present opportunities for the next decade or more, driving a market worth many tens of billions of dollars annually, according to research from Frost & Sullivan.

The Frost Radar 5G Network infrastructure 2024 report surveyed a global field of more than 100 industry participants and independently plotted the top 23 companies in the 5G comms tech market for its analysis. These companies were either leading the market overall, leading a segment or thought leaders in certain segments.

The study showed that the 5G network infrastructure industry is emerging and built upon the established 4G network infrastructure space, and that it was no surprise 4G tech leaders were ranking highly in 5G.

It added that 5G architecture brings the possibility of many suppliers working together in each area of network infrastructure: radio access network (RAN), core and edge networks, and transport networks. In other words, core networks are likely to be delivered by many suppliers, each providing one or more network functions not from a single supplier. This, said Frost & Sullivan, opens the arena to new suppliers, and that increased competitive intensity raises the level of innovation.

Overall, the analysis calculated that global communications service providers (CSPs) invested just over $60bn on their mobile and wireless network infrastructure in 2023, depending on what is included. This investment is projected to increase at a compound annual growth rate (CAGR) of approximately 2.1% over the next five years.

Most of that spending is likely to be on the RAN, with smaller spending on transport and core networks. Last year saw CSPs’ network infrastructure spending flattened worldwide, specifically on public cellular networks, and the study noted that some of that slowdown could be offset by growth in private cellular networks.

While the 5G era is underway, the analysis stressed that investments in 2G, 3G and 4G networks will continue, with the latter infrastructure remaining in the majority for the present and for the next few years. That said, investment, while still considerable, is already flattening, and will soon begin to decline. By contrast, investment in 5G networks is forecast to accelerate and become dominant. Investment in 2G and 3G networks is limited and declining.

Open and virtual RAN covering 5G and previous generations is a niche market, but is set to grow significantly over the next decade. This may be the year open and virtual RAN takes off, as at least two of the leading suppliers of traditional RAN – Ericsson and Nokia – promise open and virtual RAN services in the coming months. Private 4G and 5G networks are also small submarkets, but will experience strong growth in the coming years. Frost & Sullivan said growth opportunities presented by each should be considered by all 5G network infrastructure suppliers.

In terms of leading tech providers, Ericsson ranked highest on the Frost Radar, followed by Nokia and Huawei. All were leaders in 4G network infrastructure and continue to lead in 5G network infrastructure, with offerings including RAN, transport networks, and core and edge networks. The top five suppliers listed hold a combined market share of approximately 85%. Most of the rest either focus on a limited part of the infrastructure market or are smaller suppliers, or both.