5G System Integration Market

Market Overview

The global 5G system integration market size was valued at USD 7.76 billion in 2021 and is projected to reach USD 67.16 billion by 2030 at a CAGR of 27.1% from 2022 to 2030.

5G system integration market refers to the process of combining the physical and virtual components of an organisation using the newly upgraded systems or applications that are compatible with the ultra-fast 5G network. 5G System Integration Market Growth offers seamless connectivity and data processing across multiple industries, including manufacturing, telecommunications, retail, information technology, and energy, among others. Important applications of this system integration include industrial sensors, smart city, gaming & mobile media, fast broadband/Ultra High Definition (UHD) television, industrial sensors, and smart city.

Market Dynamics

Market Drivers

The Rising Popularity Of SDN And NFV Are Driving The Market

A notable increase in demand for ultra-high-speed internet to decrease customer response time, as well as the increasing popularity of Software-Defined Networking (SDN) and Network Function Visualization, are some of the key factors driving the global market (NFV). In addition, the widespread adoption of collaborative robots and connected sensors increases the demand for 5G services to develop superior connectivity, which also contributes to the expansion of the market for system integration. According to a June 2020 publication by the European Commission (EC), eleven new 5G infrastructure projects under the 5G public-private partnership (5G-PPP) are scheduled to begin in September 2020 in Europe. The primary objective of this partnership is to capitalize on key growth opportunities in the development and innovation of 5G hardware along Europe's transnational corridor.

The Popularity of Online Gaming Is Also Driving The Market

It also provides a significant advantage over the previous technology in the form of short lag times and an unlimited capacity for browsing. In addition to fast streaming and superior video quality, 5G system integration also promises immersive gaming experiences for the next generation. Providing multisensory digital high-definition content fueled by increased capacity to support essential technologies such as three-dimensional viewing, augmented reality (AR), and virtual reality is also among the most important advantages (VR).

Market Restraints

The Pandemic And Lack Of Proper Penetration Became A Major Setback For The Market

The COVID-19 pandemic has had a significant impact on the global 5G industry as a whole. Few nations, including the United States, Spain, France, and the United Kingdom, have delayed the spectrum auctions to deliver 5G services initially. In addition, several telecom network providers, including Huawei Technologies Co. Ltd, Ericsson, and Nokia Corporation have temporarily postponed the deployment of 5G networks for telecom operators worldwide in the first and second quarters of 2020. The delay in the deployment of 5G networks has a negative effect on the demand for 5G system integration services.

Moreover, 5G is comparatively a new technology, so its penetration among the masses will take time, making it a technology lagging behind its time.

Market Opportunities

Integration Of Smartphones With Electric Vehicles Will Bring In New Opportunities

Connected vehicles and smartphones are among the primary benefits of 5G system integration. This system integration enables the ultra-high-speed internet connection and seamless connectivity required to make autonomous vehicles and self-driving cars a reality. 5G networks enable high-speed communication between all objects on the road or along the side of the road, such as gas stations, stores, etc. The integration permits communication and data processing between infrastructure, networks, vehicles, and pedestrians. As users transition from traditional 4G technology to 5G, the use of advanced 5G smartphones will soon become commonplace. These newest smartphones would have all the features that people desired in their previous 4G-enabled phones, which is a key benefit of 5G system integration.

Regional Analysis

North America dominated the global market in 2021, with a 34.6% share. This can be attributed to the presence of major IT and telecommunications companies, such as IBM Corporation, Microsoft Corporation, and Cisco Systems, Inc. Moreover, rising investments in deploying 5G infrastructure by key market players, such as AT&T Inc. and Verizon Communications Inc., are anticipated to generate a robust need to integrate overall infrastructure and applications across various verticals, including IT and telecom, energy, and utilities, and healthcare, to support 5G NR, frequency bands. This factor is expected to contribute to the overall expansion of the regional market.

During the forecast period, Asia-Pacific is expected to grow at the fastest rate, 28.8% annually. In China, Japan, and South Korea, prominent telecom companies including China Mobile, China Telecom, KT Corporation, and SK Telecom are investing heavily in the deployment of fifth-generation networks. It is anticipated that the majority of these investments will target the implementation of next-generation infrastructure for various industry verticals, including transportation, energy and utility, healthcare, media and entertainment, and manufacturing. In the coming years, the above-mentioned countries' rapidly increasing investments in the installation of 5G infrastructure are likely to create a substantial market opportunity for system integrators. In addition, a rapid increase in the number of small and medium-sized IT companies in emerging economies such as China and India is expected to drive regional market expansion.

Segmental Analysis

This market can be segmented on the basis of services, applications, verticals, regions and competitors. In terms of services value, the infrastructure integration segment dominated the market for 5G system integration in 2021 with a market share of more than 38% and is anticipated to record the highest CAGR between 2022 and 2030. This is due to the increasing demand for integrating traditional network infrastructure with next-generation network infrastructure. Thus, the integration of legacy infrastructure makes it possible for users to access the same hardware with enhanced features, thereby reducing hardware costs. Moreover, infrastructure system integration services comprise network integration, building management, and Data Center Infrastructure Management (DCIM).

In terms of application value, the home and office broadband segment dominated the global market in 2021 with a 23.7% share and is expected to record a significant CAGR between 2022 and 2030. This is due to the growing demand for 5G system integration services to provide enhanced Mobile Broadband (eMBB) connectivity to consumers and businesses. In addition, a significant increase in IoT devices in smart cities that are rapidly developing globally is anticipated to increase the demand for 5G system integration services in order to make these devices compatible with next-generation network services. From 2022 to 2030, it is anticipated that this factor will bolster the development of smart city applications.

In terms of the value of verticals, the IT and telecom segment dominated the 5G system integration market in 2021 with a share of 25.6% and is expected to record a significant CAGR between 2022 and 2030. This is attributable to the increasing demand for 5G integration services among IT and telecom companies in order to support New Radio (NR) waves. Increasing demand for integrating enterprise network infrastructure and data centre network hardware is anticipated to increase the demand for 5G system integration services in the IT and telecommunications sector. In addition, 5G network services are anticipated to be widely adopted by businesses over the forecast period due to an increased emphasis on providing seamless connectivity during virtual meetings in order to reduce the total travel time of a consultant or specialist. In order to make an enterprise's entire network compatible with the next-generation network, it is anticipated that there will be a significant increase in demand for 5G system integration services.

Recent Developments

• Accenture, Stellantis, and TIM Brazil are collaborating in October 2021 on a private 5G network trial at the Stellantis facility in Goiana, northeastern Brazil. Since the network's introduction in July, Stellantis has improved its automotive manufacturing's efficiency, safety, and business agility.
• In March of 2020, Fujitsu launched the first private 5G network for commercial use in Japan, thereby strengthening its market position.
• HCL Technologies acquired Cisco's self-optimizing network (SON) technology in May of 2020 in order to enhance its 5G capabilities and market position.