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5G technology development

5G technology development is accelerating, investment in base station is decreasing trend
Research and development for realizing 5G (5th generation mobile communication) is accelerating, but investment in base stations is expected to decrease in the next few years. Market research firm Dell’Oro Group announced its forecast.

According to a report released by Dell’Oro Group, capital investment in cellular base stations will continue to decline significantly over the next three years despite the growing fever over 5G (5th generation mobile communications) It is said that the field will turn into growth in 2021.

This report is roughly consistent with forecasts by Ericsson, a major telecom equipment manufacturer that announced a quarterly settlement of less than expected. Dell’Oro predicted that base station sales will decline at the rate of one-digit declines in 2017, following the declines in the single-digit earnings decline in 2015 and 2016. Ericsson shows that the market will grow flat in 2019.

This news clearly shows the unstable position of wireless related equipment vendors. While these vendors are currently investing huge investment in the development of 5G technology and services, they are about to lead the large-scale deployment of 4G (fourth generation mobile) to the end.

Stefan Pongratz, senior director and analyst at Dell’Oro, said: “Such lullies have affected every vendor in all regions – three major vendors, Ericsson, Nokia and Huawei, Huawei seems to be getting better than Ericsson and Nokia so far so far although there are some bright signs in North America but the Chinese market is expected to shrink in 2017. In addition, It is expected to decline in Europe as a whole. ”

According to Reuters (Reuters) reports, Ericsson posted a loss of US $ 145.3 million in the second quarter of 2017. Both sales and gross margin were lower than consensus expectations. In addition, the company is planning to cut costs by about US $ 1 billion.

According to Pongratz, the rapid rise of LTE, especially in China, the annual sales of cellular base stations reached a peak of US $ 33 billion in 2014. Since then, this sales has declined by nearly US $ 4 billion to date, and by about 2 billion by 2021, by the 5 G macrocell and LTE small cell sales and boosted little by little, It is said that the US dollar is expected to decline.

5g technology

From 2014 to 2020, it is predicted that base station sales will be reduced by US $ 10 billion. Source: Dell’Oro Group announced in July 2017
Pongratz said, “The cumulative revenue for the wireless access network market from 2017 to 2021 is expected to be the most stagnant since the Company began monitoring the same market in 2000. LTE Advanced and LTE Advanced Pro plan to upgrade somewhat. However, the upgrade phase generally does not bring about growth and will only compensate for the decrease in the number of macrocells. ”

At the beginning of 5G deployment, macrocells in the frequency bands of 3 GHz and 6 GHz or less will be the focus. Later, it seems that 5G small cells will be installed in cities earlier. In 2021, about 5% of the capital investment in the 5 G market by telecommunication carriers is said to be occupied by services using the millimeter wave band.

According to Reuters’ report, small cell sales are expected to be quadrupled from 2017 to 2021, but most of it will be for LTE.


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