For casual observers of the telecommunications market, the state of 5G adoption might seem like a mixed bag at best. The pace of new commercial deployments actually slowed last year. Look deeper, however, and you’ll find a much more encouraging story. Despite macroeconomic headwinds and technical challenges, 2023 saw significant, durable growth in 5G investment.
In our role providing testing and validation for service providers, network equipment manufacturers (NEMs), and device original equipment manufacturers (OEMs), we often get an early preview of where the industry is placing bets for the future. Behind the scenes, we saw a major uptick in 5G activity last year from stakeholders preparing new deployments, validating use cases, and readying for the explosion of new 5G devices hitting the market. This included:
- More 5G projects: We participated in more than 500 new 5G-related engagements last year with more than 150 customers, bringing our current total to 3,100 5G projects worldwide.
- Broader 5G investment: While 2022 engagements were dominated by service providers, 2023 saw a surge in activity among NEMs and device OEMs. This leveling out of testing (34% service providers, 27% NEMs, 29% OEMs) offers a preview of what to expect in 2024.
- More diverse 5G testing: 5G engagements encompassed a mix of testing activity across 5G Core and testing automation, radio access networks (RAN) and devices, transport, service experience, and service assurance.
All this activity bubbling beneath the surface points to a market reaching an inflection point. We appear to be approaching a perfect storm of 5G acceleration, and 2023 may prove to be merely the calm preceding it. Spirent recently released the 2024 5G Report detailing our 5G outlook for 2024 and the “mega-trends” we’re following. Here are some of the highlights.
5G standalone deployments will accelerate
Transitioning from traditional telco infrastructure to cloud-native 5G Cores represents a drastic change to how service providers deploy and manage their networks. Despite the formidable challenges this evolution entails, however, service provider investment in 5G SA is currently growing at 3-5x the rate of uptake of previous network generations. The biggest factor in this growth: we finally have a mature 5G ecosystem to support it. There are now:
- 17+ 5G Core network vendors
- 89+ 5G SA modems and chipsets available
- Nearly 1,750 device types that support 5G SA
In all, 5G SA now spans 51 live commercial networks worldwide, with more than 120 operators across 55 markets currently investing in it. Driving this adoption is a growing acceptance among operators, cloud providers, and NEMs alike that enterprises want and will pay for the advanced service capabilities that 5G SA enables.
Based on testing activity, look for early activity in 2024 in private networks (see next section) and premium 5G services like secure network slices, voice-over New Radio (VoNR), and reliable low-latency networks for industrial applications. We expect dozens of commercial deployments to launch this year, starting regionally and scaling nationally over time. By early 2025, we should see more than 100 live 5G SA networks.
Private networks will dominate enterprise investment
For service providers anxious to start monetizing their 5G investments, 2024 will provide a clear target: enterprise private networks. There are already more than 1,200 private networks deployed globally, with manufacturers representing the largest segment, followed by transport and logistics. Seaports, public venues, and government and defense sectors are also growing rapidly.
Many initial use cases don’t have particularly complex requirements. Enterprises simply need reliable 5G mobile connectivity in the right place, usually with a lightweight radio footprint sufficient to cover their indoor and outdoor environments. We’re expect ongoing growth in lightweight, low-cost Network-in-a-Box (NIB) offerings, combined with edge application hosting and automation.
The biggest factor driving private network adoption, however, is the results. Early adopters have achieved an ROI in as little as six months, with many reporting reduced downtime and increased productivity among their outcomes. As word spreads about these benefits, we expect deployments to accelerate in 2024 and become a meaningful source of incremental revenue for operators.
They key for those seeking to capitalize: SLA management. The primary drivers for enterprises deploying private networks are achieving network reliability, security, and predictable performance for their mission critical applications. According to an STL Partners survey, enterprises will pay a premium for network SLAs that can guarantee these outcomes.
AI will drive 5G efficiencies
Service providers already use artificial intelligence and machine learning (AI/ML) to help detect anomalies across large-scale networks, and even in customer-facing use cases like chatbots. But few other areas will be benefit from the “perfect storm of 5G” next year than the use of AI in telecom. The complexity of cloud-native 5G systems, paired with the explosion of generative AI capabilities coming to market, is pushing service providers to explore broader and more strategic AI initiatives.
Over the next 24 months, look for significant AI investment among operators targeting:
- Network management and operations: The challenges that come with operating vast networks connecting millions of devices and users are a perfect match for AI. Telecoms are investing in AI-driven automation of diverse operational processes including network lifecycle management, root cause analysis of failures, and fraud and attack detection. Many are also beginning to use AI strategically for things like predictive maintenance and data-driven network design and planning.
- Customer experience management: AI-assisted customer-facing services will go beyond making it easier for subscribers to access support. Service providers aiming to improve user satisfaction and reduce churn will use AI classification and prediction capabilities to automatically tailor solutions and dynamically optimize network performance.
- Energy efficiency: AI will play a growing role in helping service providers reduce carbon footprints and operating costs. Look for a wide range of AI initiatives to automate and optimize the most energy-intensive areas within telecom, including radio resource management, labs, and data centers.
Looking ahead
This is just a subset of the 5G trends we’re watching in 2024. Based on global testing activity, we also expect:
- Accelerated telecom digital transformation
- New use cases for 5G Advanced features
- Growing adoption of Open RAN
- Massive growth in satellite-based services
Don’t be taken in by techno-pessimists. The 5G revolution may be taking longer than some hoped, but it’s already begun. In 2024, all the activity we’ve been seeing behind the scenes will be ready for the spotlight.
