CIR has just issued a new report on the global 5G network infrastructure market. This blog discusses a few points from the study.
As with the previous generations of mobile technology, 5G mobile will take a great leap forward in terms of the services it can support. In the case of 5G, the claim is that for the first time a mobile platform will be able to support the most futuristic broadband services – 8K television, for example, or virtual reality. While some of the existing 4G LTE infrastructure will support 5G, a new opportunity is emerging to create new backhaul and especially fronthaul facilities.
Popular expectations for 5G mobile services tend to eclipse the reality that 5G will require massive network infrastructure deployment preceding roll out of any true 5G services by a couple of years. This infrastructure deployment push is just now ramping up — especially in Asia, but also in the West. Once built out, 5G network infrastructure technology will support ultra-fast speeds, greater reliability and low latency, as well as multiple simultaneous connections for a broad range of new applications in industry, agriculture, transportation, medicine and commercial communications.
CIR’s latest report, Optical Networking Opportunities in the 5G Infrastructure Market 2019-2028 takes a deep dive into forecasting the trajectory of infrastructure opportunities for suppliers of optical cabling and network equipment. This is a market that CIR believes will peak at $14.6 billion in 2021.
Fronthaul takes on new importance in the 5G era: As 5G infrastructure begins to be deployed in earnest over the next few years, CIR anticipates that equipment sold for fronthaul applications is expected to generate almost $2 billion by 2021. The fronthaul part of the 5G infrastructure carries traffic from the small cells that are characteristic of 5G to baseband units (BBUs).
As we see it, this represents a specifically new opportunity, because in previous generations of mobile telephony the latency and bandwidth for fronthaul were not especially demanding and there was, as a result, not much need for fiber in it until now. Specifically, the broadband aspirations of 5G and its microcell architecture will mean a lot more optical cable. Indeed, the term “fronthaul” wasn’t used much at all until recently.
In the short term, as we see it, the primary opportunity in the fronthaul will come from PONs —
specifically, NG-PON (aka WDM-PON) technology. NG-PON represents an excellent solution to fronthaul needs, since it is relatively low-cost solution with sufficient bandwidth to support the capacity needs of fronthaul. From a PON supplier perspective, the fronthaul represents a new market to add to FTTx. In the longer term, conventional WDM boxes will make their way from the backhaul to the fronthaul part of the 5G infrastructure.
International politics changes the supplier structure for 5G infrastructure: Many new 5G service trials have been announced since 2017 and a handful of core network equipment suppliers will serve carriers worldwide as prime contractors, augmented by specialist firms as needed. For example, these specialist firms include WDM suppliers, Ciena and Infinera,
Until recently most of the prospective 5G operators have looked to four primary suppliers of equipment — Ericsson, Nokia, ZTE and Huawei, but national security concerns in many countries are now keeping the Chinese firms ZTE and Huawei out of the 5G infrastructure business.
This political change, we believe will have a profound impact on the opportunities space for mobile infrastructure suppliers. If Chinese firms are kept out of Japanese and Western 5G infrastructure markets, there will be more opportunities for Ericsson and Nokia and firms affiliated with them. Ericsson has had financial worries for a couple of years now and these may lessen with Chinese competition eliminated. Of course, it is fair to assume that any chance that Ericsson and Nokia had in the important Chinese infrastructure market have now entirely evaporated
CIR’s comprehensive report on the 5G Network Infrastructure Market breaks out equipment type, network protocols and offers a detailed a ten-year forecast for specific sectors such as optical cable, PONs, WDM, Carrier Ethernet, and TDM. There is also detailed analysis of 5G infrastructure deployments by major mobile operators and product strategies from leading cable and equipment suppliers.