Mobile Technology and the Promise of 5G | DIGI
customer used to have a 1.5 meg connection and used it occasionally during the
day… Now they’re using it for hours—and in some cases all day—it’s having a
burden on our network, requiring us to buy more bandwidth.”
Mobile technology and the promise of 5G
- According to GSMA
Intelligence, between 2020-2025, mobile operators will invest around $1.1
trillion worldwide in mobile capex, excluding spectrum acquisitions, with
roughly 80% spent on 5G networks
By 2025, GSMA
Intelligence forecasts 25.1 billion connected objects up from 10.3 billion in
- 5G handsets will
generate almost $20 billion annually in global royalties for intellectual
property (IP) holders in 2025, according to Strategy Analytics.
- The South Korean
government targets 2026 as the year in which it will begin its 6G trials with a
stated goal of having that technology and those networks commercially available
Much like the evolution of the US road system, we have
seen the global digital infrastructure deploy new technologies to increase both
network speeds and capacity as businesses and consumers have driven digital
usage, clogging the existing network in the process. What’s different is the
global nature of this buildout; as more people have more devices chewing
through or generating more data, there is an ongoing race for network operators
and broadband providers to boost the coverage and quality of their network by
backfilling in existing technologies, such as 3G, 4G, cable, fibre and related
backhaul technologies, as well as deploying new ones, such as 5G and gigabit
fibre, and in some cases changing their technology strategy. An example of that
last point is found with Verizon (VZ), which after halting its FiOS build out
in 2010, is testing a 5G network service for in-home wireless service – a far
more cost-efficient solution than laying fibre, especially when data speeds
rival FiOS wired speeds (100 to 500 Mbps for FiOS vs. 300 Mbps to peak speeds
of nearly 1 Gbps for 5G).
Source: Statista, June 2020
to the Consumer Technology Association, 5G data speeds could reach up to
10Gbps, which would make it possible to download a two-hour movie in less than
four seconds versus six minutes on 4G. The higher frequencies that make such
speeds possible also enable directional radio waves that can be targeted. The 5G
antennas, which will be able to handle more users and more data, beam out over
shorter distances, which means we will need more of them. Extra repeaters will
need to be installed across cities. We could see modems and WiFi routers being
replaced in the future with 5G small cells to bring those 5G connections into
homes and businesses, which could end up doing away with WiFi or wired
connections entirely in homes and offices. Indeed, an emerging trend in current
home WiFi networks is a shift away from a single wireless point to so called
For illustrative purposes
Building out the 5G network comes with a hefty price
tag. According to the Heavy Reading Mobile Operator 5G Capex report, spending
on 5G globally will rise from $16 billion in 2020 to $59 billion by 2022 and
$88 billion by 2023. According to data published by GSMA Intelligence, between
2020-2025, mobile operators will invest around $1.1 trillion worldwide in mobile
capex, excluding spectrum acquisitions, with roughly 80% spent on 5G networks.
Some operators in the most developed markets are upgrading their 4G networks to
faster speeds and lower latencies, while 5G investment is still in its infancy.
How 5G will spur unquenchable demand for use and
generation of data, driving additional digital infrastructure spending
As these connective networks are built out, the very
usage of them will drive further demand for greater and greater capacity. The
greater the capacity, the greater the demand for more in a virtuous circle in
which increased supply generates incremental demand. These range from data
centres and the equipment they house to new chips and components that power and
connect devices that will talk to existing and next-generation networks.
For illustrative purposes only.
- As we
can see in the above chart, Statista forecasts that by 2025 5G smartphone shipments
will reach roughly 1.5 billion worldwide, up from 2 million units in 2019. 5G
phones will need even more RF semiconductors than 4G and drive even great
demand for chips that can communicate with 5G and existing wireless networks.
5G handsets will generate almost $20 billion annually in global royalties for
intellectual property (IP) holders in 2025, according to the latest research
from Strategy Analytics.
expects spending on off-premises cloud IT infrastructure will grow at a
five-year compound annual growth rate (CAGR) of 10.8%, reaching $55.7 billion
operators will spend $75 billion on optical transport systems over the next
five years, predicts the Dell’Oro Group, driven by rollouts of 5G mobile and
next-generation fixed broadband technologies and data centre interconnect
station shipments are expected to eclipse 20 million over the next five years,
according to the Dell’Oro Group, as carriers support the mobile broadband
usage, next-generation network deployments, and support new applications
including IoT, Fixed Wireless Access, Public Safety, and Enterprise, which are
expected to increase nearly fourfold over the 2018-2022 period.
global Data Centre Deployment Spending market is estimated to have hit $168.54
billion in 2018 and is expected to reach around $240.61 billion by 2025, a CAGR
of around 5.22% between 2019-2025. This
reflects the continued rise in internet usage and breakthroughs in the IoT
along with the large-scale demand for new data centres.
sensors and other data streams will give manufacturers new insights up and down
the supply chain, from customer demand signals to their suppliers’ own internal
processes, however, they will require chips and network capacity to do so. While IoT is growing in consumer markets,
such as consumer electronics and smart home devices, the industrial IoT segment
will be the largest source of growth going forward. By 2025, GSMA Intelligence
forecasts 25.1 billion connected objects (53% industrial) up from 10.3 billion
(41% consumer) in 2018.
newer connective technologies mature, we will see a shift in what network
operators are buying. For example, in 2016 2G, 3G and 4G wireless network
infrastructure spending reached $56 billion, but according to SNS Research, 5G
networks are forecast to account for more than 80% of wireless network
infrastructure spending by the end of 2025. According
to Qualcomm, 5G’s full economic effect will likely be realized across the globe
by 2035 and will potentially enable up to $13.2 trillion worth of goods and
services. The 5G value chain, which includes OEMs, operators, content creators,
app developers, and consumers could support up to 22.3 million jobs, and over
time, the total contribution of 5G to global GDP is expected to be roughly
equivalent to a country the size of Italy, which has the eighth largest economy
in the world.
For illustrative purposes
This finding implies
continued growth in 5G well past 2025, but given the long lead time in
developing subsequent technologies, it should come as no surprise that we are
already starting to hear rumblings over the technical protocols that will
follow 5G. The Academy of Finland has announced the funding of
"6Genesis," an eight-year research program to conceptualize 6G under
the auspices of the University of Oulu's Centre for Wireless Communications. Already
the South Korean government targets 2026 as the year in which it will begin its
6G trials, with a stated goal of having that technology and those networks
commercially available between 2028-2030. These
trials aim to achieve 1Tbps in data transmission speeds, which amounts to
roughly five times faster than 5G and latency reduction to one-tenth of current
5G services. Much like the multi-decade evolution in the US highway network, we
have much road ahead of us when it comes to improving the global Digital Infrastructure backbone.
The chips that make digital connectivity happen
- By 2025, Statista forecasts
more than 2.7 billion mobile 5G subscriptions worldwide.
- 5G smartphone shipments
are expected to grow to 1.5 billion units by 2025 vs. just 2 million in 2019.
5G phones will need even more RF semiconductors than 4G, drive even great
demand for chips that can communicate with 5G and existing wireless networks
- Forecasts have the global RF semiconductor market
growing to $26.2 billion by 2025 up from $17.4 billion in 2018, a compound
annual growth rate of 8.5%.
there have been several devices that connect to mobile networks, including PCs,
tablets, and wearables, the original big seller was the mobile phone. While
such a rudimentary device can still be found if one searches high and low, it
has been replaced by the ubiquitous, wondrous and highly addictive smartphone.
Smartphones don't just make calls -- they are used increasingly to access the
internet, shop, chat, stream videos, interact on social media, and access other
2019, smartphone shipments totalled 1.38 billion, down modestly from 1.41
billion in 2018 according to data published by IHS Markit,
but as we’ve seen in the past, the deployment of next-generation networks that
bring greater data speeds tend to foster a smartphone upgrade cycle. For
context, at the end of 2019 GSMA found there were 5.175 billion unique mobile
subscribers across the globe. Just 2 million 5G phones were shipped in 2019
according to Statista, which sees roughly 77 million being shipped by the end
of 2021. That number is expected to explode higher in the coming years as 5G
networks start to light up across the globe, reaching 1.5 billion units by
2025. But it’s not just smartphones that will be spurring data consumption. From
smart homes to the smart grid and from industrial applications to wearables,
the number of connected devices is rapidly proliferating. Statista forecasts
the number of 5G mobile subscriptions will exceed 2.7 billion by 2025, while
IHS Markit Ltd. projects the Internet of Things (IoT) market will grow from an
installed base of 15 billion units in 2015 to more than 75 billion units by
For illustrative purposes
admit those are some aggressive and exponential growth forecasts, but they
hinge on the seemingly unquenchable thirst for connectivity and data that will
only continue to grow with 5G’s quicker data speeds, greater network bandwidth
capacity, and lower latency. Findings from Deloitte Insights seem to confirm
the expected consumer uptake in 5G:
of consumers said they would be more likely to upgrade to a 5G-compatible
smartphone when 5G becomes available;
of consumers said they will likely replace their home internet with 5G Wi-Fi
than 40% of Gen Z consumers said they will play more mobile video games with
35% of Gen Z and millennials said 5G would change how they use augmented
reality and virtual reality (AR/VR);
of home automation users rank 5G's potential to offer better connectivity in
the home as one of the top three capabilities likely to drive them to use 5G.
For illustrative purposes
the thing: In order for all of those devices to connect to a mobile network
they will need RF semiconductors, which perform tasks such as amplifying and
filtering wireless signals. That market is slated to explode in the coming
years. Forecasts have the global RF semiconductor market growing to $26.2
billion by 2025 up from $17.4 billion in 2018, a compound annual growth rate of
are two key drivers of that forecasted growth rate – first is the sheer volume
of devices that use semiconductors and the second is the greater number of RF
semiconductors needed per 4G or 3G device. The reason for that greater RF
content per 5G device is twofold in that not only do those devices need to be backward
compatible, as we mentioned above, but they also need to connect to the 5G
networks that are utilizing different frequency bands.
As a result,
a 5G smartphone will need to be able to connect across 30 frequency bands
compared to 15 with a 4G smartphone, which means a significantly greater number
of filters, switches, and power amplifiers are needed. All told, RF
semiconductor content is expected to reach $25 per 5G smartphone compared to
$18 for a 4G model and $8 for a 3G one. For the trivia buffs out there, a basic
2G mobile phone contained just $3 in RF semiconductor content.
For illustrative purposes
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