International Data Corporation (IDC) has announced that it expects 5G infrastructure revenues to reach $26 billion in 2022, compared to just $528 million in 2018. It said the compound annual growth rate (CAGR) of 118% will be spurred on in Q4 2018 and 2019 as 5G handsets start to infiltrate the market and customers begin to experience the new capabilities themselves and demand the faster speeds ubiquitously.
The estimates from IDC take into account 5G and 5G-related network infrastructure including 5G Random Access Network (RAN), 5G NG core, Network Functions Virtualization Infrastructure (NFVI), routing, and optical backhaul. It predicts that 5G RAN will be that “largest market sub-segment” throughout the period between now and 2022, based on information it has from previous generations of mobile networks.
Discussing the findings, Patrick Filkins, senior research analyst, IoT and Mobile Network Infrastructure at IDC, said:
“Early 5G adopters are laying the groundwork for long-term success by investing in 5G RAN, NFVI, optical underlays, and next-generation routers and switches. Many are also in the process of experimenting with the 5G NG core. The long-term benefit of making these investments now will be when the standards-compliant SA 5G core is combined with a fully virtualized, cloud-ready RAN in the early 2020s. This development will enable many communications SPs to expand their value proposition and offer customized services across a diverse set of enterprise verticals through the use of network slicing.”
Several household names including Nokia, Ericsson, and Samsung stand to gain from the expected growth in revenue as all have been playing an important part in the development of 5G, for example, in September, T-Mobile signed a $3.5 billion deal with Ericsson on 5G, Samsung started churning out 3GPP-compliant 5G modems, and Nokia has agreed a deal with Tencent, set up a 5G lab and signed a €1 billion frame agreement with China Mobile, and it signed a deal with T-Mobile.