The global 5G equipment market was valued at USD 8.28 billion in 2023. It is estimated to reach USD 130.48 billion by 2032, growing at a CAGR of 35.85% during the forecast period (2024–2032). In an increasingly interconnected world, there is a growing need for seamless global connectivity, increasing the adoption of 5G worldwide. This is anticipated to drive the global 5G equipment market. Governments from several nations worldwide are immensely supporting the rollout of the 5G network and investing in the development of its infrastructure, thereby boosting the global market. Moreover, the launch of new and more efficient 5G equipment technology is estimated to create opportunities for market growth.
5G equipment comprises the hardware and software for deploying fifth-generation wireless networks. This includes advanced base stations with sophisticated antennas like Massive MIMO and beamforming, enabling high-speed data transmission. Routers and switches manage data traffic within the network, ensuring efficient routing. Backhaul equipment connects base stations to the core network through high-speed fiber-optic cables. Software-defined networking and virtualization technologies optimize resource allocation and network performance.
Edge computing infrastructure brings computational tasks closer to users for low-latency applications. Security equipment like firewalls and encryption mechanisms also safeguard data integrity and confidentiality. Together, these components form a robust ecosystem supporting the fast, reliable, and secure connectivity that defines 5G networks, facilitating a wide range of applications from smart cities to autonomous vehicles and the Internet of Things.
Highlight
The increasing adoption of 5G technology stimulates demand for 5G equipment, propelling growth in the market. The number of global 5G wireless connections experienced a significant growth of 76% between the conclusion of 2021 and the end of 2022, reaching a total of 1.05 billion. According to the latest figures from Omdia, there were 455 million new global 5G connections in 2022. Therefore, these statistics indicate a 14 percent increase in quarterly growth from 922 million in Q3 2022 to 1.05 billion in Q4 2022.
The growth of global 5G connections is expected to maintain momentum in 2024, with an estimated number of about 2.23 billion connections. By the end of 2027, this number is expected to reach 5.9 billion. As more telecommunications companies upgrade their infrastructure to support 5G networks, there is a heightened need for compatible equipment such as base stations, antennas, routers, and switches. This surge in demand is fueled by the desire for faster data speeds, reduced latency, and enhanced connectivity, driving innovation and competition among equipment manufacturers to meet the market's evolving needs.
Many governments worldwide invest heavily in 5G infrastructure to stimulate economic growth, improve competitiveness, and support technological innovation. Nations, including China, the United States, Japan, and South Korea, have made substantial progress toward being 5 G-ready and are investing significantly in its development. China is a prominent nation with outstanding expertise in all aspects of 5G implementation. This is mostly attributed to the government's strategic planning and effective coordination with industry entities that utilize 5G technology.
Telecommunication vendors produce 5G infrastructure components and receive extensive government assistance worldwide. The favorable effects of implementing 5G technology on a country's economic standing motivate different national administrations to expedite its implementation. For instance, the Chinese government has allocated a substantial sum of USD 400 billion to implement 5G technology, working closely with manufacturers of 5G equipment and providers of technological solutions. As the deployment of 5G accelerates, there will be a surge in demand for 5G equipment, leading to growth in the global market.
The high initial investment required for the 5G equipment market encompasses various expenditures, including upgrading existing infrastructure, deploying new hardware, and implementing advanced technologies. This significant financial commitment often poses a barrier to entry for many companies. Moreover, the costs extend beyond mere equipment procurement; they include expenses related to spectrum acquisition, regulatory compliance, and talent acquisition to manage the complex 5G ecosystem.
Such investments demand meticulous financial planning and may strain the budgets of telecommunications companies, particularly smaller players. Additionally, the uncertainty surrounding the returns on these investments further complicates decision-making. As a result, while the potential benefits of 5G technology are enticing, the considerable upfront costs often necessitate careful strategic planning. They may delay widespread adoption until the financial viability becomes more apparent.
The key market players are introducing novel 5G equipment in response to the rising proliferation of 5G. For instance, in October 2023, Ericsson, a Swedish telecommunications equipment manufacturer, introduced a new software toolkit. This toolkit allows telecom operators to provide advanced 5G services that demand high throughput, reliability, and low latency. These services include mobile cloud gaming, video conferencing, live broadcasting, remote-controlled machines/vehicles, public safety services, and upcoming Extended Reality (XR) applications. Ericsson's software toolkit improves functionality for Massive MIMO, Advanced RAN Slicing, Time-Critical Communication, and 5G Core.
Furthermore, in June 2023, Huawei declared its intention to introduce a comprehensive range of commercial 5.5G network equipment in 2024 during the 5G Advanced Forum held during MWC Shanghai 2023. Huawei introduced the idea of a "5.5G Era," which encompasses a complete solution that combines advanced technologies such as 5.5G, F5.5G, and Net5.5G. This strategy will safeguard the operators' prior investment in 5G technology while enhancing network performance by ten times. The 5.5G Era will have peak downlink speeds of 10 gigabits and peak uplink speeds of 1 gigabit to accommodate a wide range of service needs. This is estimated to present an opportunity for market expansion.
| Study Period | 2020-2032 | CAGR | 35.85% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 8.28 billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 130.48 billion |
| Largest Market | North America | Fastest Growing Market | Asia Pacific |
North America Dominates the Global Market
Based on region, the global 5G equipment market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North America is the most significant global 5G equipment market shareholder and is expected to expand substantially during the forecast period. North America's telecom business is growing tremendously due to an increasing number of unique mobile subscribers. Based on a study conducted by the GSM Association, the predicted number of distinct mobile users is approximately 321 million in 2019, and it is projected to increase to around 345 million by the end of 2025. North America is a promising region for the 5G equipment market growth due to its high subscriber penetration and significant consumer expenditure on mobile services. By the end of Q4 2022, North America will have a total of 119 million wireless 5G connections, making it a frontrunner in adopting this technology.
Furthermore, the North American market has achieved a 5G penetration rate of about 32 percent, adding 52 million 5G connections in the past year. This represents a significant growth of 78 percent compared to the fourth quarter of 2021. In 2023, it is estimated that North America will contribute 215 million 5G connections, primarily due to the high number of 5G smartphone shipments in the United States. Moreover, the region encompasses prominent telecommunications industry leaders and equipment makers, including AT&T, Cisco, Nokia, and Ericsson. As the deployment of 5G infrastructure increases, the region will have a corresponding rising demand for 5G equipment.
Asia-Pacific is expanding significantly in the global market owing to the rising penetration of 5G in this region. For instance, according to Statista, by 2030, 5G is projected to represent 88 percent of the overall mobile connections in China, Hong Kong, and Taiwan. By that time, it was predicted that growing markets in South and Southeast Asia would achieve a growth rate of 32 percent. China has implemented comprehensive national strategies to fully deploy 5G technology, capitalize on the economic gains inside its regional markets, strengthen its industrial infrastructure, and develop a dominant position as a global communications equipment supplier.
China implemented a program dubbed "Made in China 2025" to stimulate the expansion of materials producers, equipment manufacturers, and the overall 5G industry in the country. Moreover, Samsung Electronics Co. Ltd is currently assessing the possibility of establishing India as a central location for manufacturing 5G equipment. The South Korean firm is contemplating India and Vietnam as potential options for its plans. Consequently, all these factors are estimated to drive the regional market growth.
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The global 5G equipment market is segmented by type and application.
Based on type, the global 5G equipment market is divided into SDN, NFV, and MEC.
SDN, or software-defined networking, is a vital component in overall 5G infrastructure and is primarily adopted to achieve increased flexibility and agility. Its main function is to create architecture for network programmability, supporting the creation of multiple network hierarchies. In simple terms, SDN is a direct control that manages the entire network with its software entity termed 'controller,' shifting the focus from hardware-based operations.
One of the primary reasons behind the adoption of this technology is the higher price of 5G hardware equipment. As the network architecture expands, the demand for specific network equipment also grows, increasing overall operational costs. According to our forecast, the total Capex cost will grow from 60% in 2019 to 90% by 2025. Moreover, this cost is estimated to vary based on the geographical variation. The SDN paradigm will help increase overall networking efficiency by imparting scalability with a higher quality of services, thereby bridging the gap between business needs and management systems.
Based on application, the global 5G equipment market is segmented into automotive, commercial, consumer electronics, manufacturing, and others.
5G technology will pave its way in every manufacturing sector, and commercial applications hold a significant market share due to the digitalization of the retail sector. Retailers are utilizing digital technologies to improve the in-store experience for customers and understand consumer behavior to gain high revenue margins. This trend has established a strong growth platform for the 'Smart Retail' concept. This concept enables personalization of a customer's experience in both an online environment and a physical outlet. The high bandwidth capabilities and low latency rates of 5G will be crucial in this sector as the volume of data to be transferred will increase with the materialization of this concept.
