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Telecom Business Review | Tuesday, July 11, 2023
With the advancement of enabling technologies, the expansion of private networks, and the collaboration of partners, 5G applications will expand in the coming years.
FREMONT, CA: According to Everest Group, telecom companies, and other enterprises are preparing for 5G, fueling a growth boom in the 5G engineering services industry. In 2021, investment in 5G engineering, a nascent and rapidly growing market, is expected to reach USD12.0 to 12.2 billion, with 80 percent of total spending allocated in-house and 20 percent outsourced.
Engineering services spending can grow at a 30 percent annual rate for the next four to five years, with outsourcing spending growing at a 45 percent annual rate by 2022.
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5G: 5G, the most recent advancement in mobile network technology, provides high data transfer speeds and ultra-low latency. Not only are telecommunications companies investing heavily in 5G engineering and deployment, but non-telecom enterprises are also showing interest in how 5G can solve industry-specific challenges. The overall enterprise spending for 5G engineering services has been increasing steadily yearly; however, COVID-19 caused a slight dip in growth rate during the contract year 2020. Despite high setup costs, complex use cases, and a regulatory landscape around 5G, the private network market is growing quickly. For developing solutions and providing services to a rapidly expanding market, various 5G-driven use cases have led to collaboration among network participants.
Market trends: North America, home to many of the large telecom companies involved in 5G, is the largest and most mature market for 5G engineering spend, accounting for 35-40 percent of the global market. Europe is the second-largest market (30-35 percent of the total) and is as mature as North America. Asia Pacific, which accounts for 15-20 percent of the market, is rapidly gaining ground.
Everest Group's recently published report, "Envisioning the Connected Future - 5G Engineering Services State of the Market Report 2022," includes these and other findings. The report analyses the global 5G engineering services market and the emerging trends resulting from the growing use cases.
Future potential: Telecommunications companies and other businesses recognize 5G's potential, which has already become the fastest-growing market segment in the global engineering services market. This is ushering in a new era of engineering services outsourcing, in which engineering service providers assist enterprises and telcos with conceptualizing and scaling various use cases across industries. Over the next several years, opportunities in 5G will expand, particularly as enabling technologies advance, private networks expand, and partners collaborate to realize the full potential of 5G applications.
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