5G deployment to be ‘ignited’ in 2021

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 21 Jan 2021

Technology research firm Omdia has identified the key trends that will define the telecoms industry’s focus in 2021, saying this year will mark a second wave of acceleration of fifth-generation (5G) technology deployments for service providers.

The “2021 Top Trends” report, which is part of Omdia’s “Connecting the Dots” series, was released this week, and takes a deep dive into the top trends for this year across the enterprise, service providers and communications, consumer and industrial markets.

While 5G deployments have very much been among research firms’ top tech predictions over the years, Omdia expects 5G to reach mass market readiness in 2021, with 0.5 billion global subscribers.

“Globally, 5G will reach 553 million subscriptions in 2021,” says the report. “Its distribution across the globe will be more balanced as the US and Europe will leverage the introduction of Apple's 5G devices.

“With markets approaching critical mass, the deployment of wide-ranging and denser 5G coverage will also facilitate the commercial adoption of 5G in B2B and B2B2x markets – these have so far been limited to test beds, and small and large trials.”

Omdia states that although some 5G deployments already happened in 2020, the bulk of the market will be ignited in 2021.

“Affordable 5G devices are on the horizon. Service providers are advocating for sub-$300 5G devices, but emerging-market affordability is still some time off, and 5G will remain mainly a rich-economy affair for most of 2021.”

The COVID-19 pandemic gave ICT the opportunity to show its prowess, and as a result, Omdia’s report anticipates that broadband access networks will remain vital for global connectivity in 2021.

Overall, the broadband access equipment market continues to grow, further propelled by demand generated by the pandemic and more people working and learning from home, notes the report.

“This demand will continue in 2021 due to renewed lockdowns and quarantines until a vaccine becomes widely available.”

Furthermore, the report highlights that COVID-19-related network demand has accelerated the movement of operators to 10G networks.

“Virtualisation will be a major driver in 2021 as operators seek efficient and automated networks. Cable operators continue to shrink their head ends and distribute functions into the outside plant, but will resume centralised upgrades and node splits to fulfil immediate bandwidth demands in the short-term.

“Integrated operators are looking to adopt fibre access to support multiple service segments, including access, transport and campuses.”

Hype becomes reality

Omdia predicts service provider (SP) investment in artificial intelligence (AI) will finally catch up with the hype.

In the report, the company indicates 58% of SPs will increase spend on AI tools this year, with 53% of SPs increasing spend on customer engagement systems during the same period.

“The COVID-19 crisis has impacted service provider spending plans, but technology never sleeps, and several key areas of telecom IT will demand attention in 2021.

“Overall telecom IT vendor revenue is expected to grow by 2.3% in 2021, a welcome improvement on this year’s anticipated 0.6% decline, although still below the 4% CAGR for the period to 2025.

“However, despite the overall sluggishness, there will be strong areas of growth, especially around anything to do with AI-driven network automation, data management and monetisation.”

It adds: “Automating the increasingly complex network and service management environment has become a major priority for SPs, along with the AI and data management capabilities required to support this.

“Service providers also need to invest in customer engagement solutions to digitise and unify the customer experience and the 5G monetisation tools required to support a wide range of new services and business models.”

Turning to open virtual RAN (vRAN), Omdia expects greater adoption and significant steps towards greater commercialisation of vRAN in 2021.

“Dish networks will start deploying its new mobile network in 2021, giving open vRAN proponents a second large-scale greenfield proof point for their solutions. Operators will be expanding trial and proof of concept for testing open RAN solutions, with deployments now approaching 1 000 sites in 2021 – a major expansion from earlier trials of a dozen or more sites.

“We expect to see greater message differentiation between solutions for rural coverage-driven networks and those built for high-capacity networks.”

The research firm highlights that figuring how to monetise 5G for consumers will continue to be the biggest challenge for operators in 2021.

Pricing to “differentiate” entices the consumer to upsell to 5G, it says. “As of 2Q20, 77% of 5G operators did not bundle 5G-rich apps. Conversely, 23%, or 17 of the 73 5G telcos tracked, did have a differentiated pricing model and bundled at least one 5G-rich service in 2Q20.

“Of those that didn’t bundle, 33% simply offered data tiers, with or without non-5G-ready content, such as traditional OTT services; for example, Spotify. A further 22% did not launch any new plans for 5G – a ‘do nothing’ strategy, opening only existing plans to next-generation users.”

The firm points out there is still the wait for operators in numerous developed countries to even rollout their first 5G-rich app.

“The COVID-19 pandemic’s resulting economic and job uncertainty is not going away any time soon. However, bundling 5G-rich apps (3D AR shopping, e-books, or VR cloud gaming) alongside more expensive 5G plans, will make consumer upselling easier for telcos.”

Amid the influx of 5G-enabed devices in SA, ICT pundits cautioned that the latest generation of cellular network technology will have a limited positive impact on South African 5G phone owners. This, they said, is due to limited 5G coverage in the country, as a result of the delayed spectrum allocation.

Omdia forecasts that 5G mobile usage may remain limited in SA over the next five years and will represent 15% of the South African mobile subscriptions in 2025.