“ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, announced significant findings in the 5G & Mobile Network Infrastructure, Telco Digitization, and Video, VR & OTT markets”.
China Won’t Be First to Deploy 5G, but will Ultimately be the World’s Largest 5G Ecosystem
China has announced aggressive plans with the superfast “fifth generation” (5G) connectivity and has positioned the new cellular generation as a key pillar of its economic development initiatives. However, despite China’s vigorous pursuit to win the 5G race, it is U.S. operators who will actually deploy 5G before their Chinese counterparts, according to ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies.
“While they won’t be the first country to deploy 5G, once they do, China will be the world’s largest 5G ecosystem. At present, China has more than 160 cities with a population of more than 1 million and 15 cities with a population of more than 10 million,” said Emanuel Kolta, Research Analyst at ABI Research. “This will make China the biggest single mobile broadband market and the Chinese government aims to position 5G as a key technology in its industrial revolution strategy.”
ABI Research expects that China Mobile, China Unicom, and China Telecom will all start large-scale deployments in 2020, prior to 2019’s pre-commercial deployments. While the provision of enhanced mobile broadband to consumers will be the core proposition in early Chinese 5G deployments, industrial applications and network slicing will be the target of all Chinese operators. The Chinese central government has positioned 5G as a core component of its 13th Five-Year Plan and Made in China 2025 strategic plan to upgrade the Chinese industry. Augmented Reality (AR) and Virtual Reality (VR) have significant importance in consumer and industrial applications. While consumer application VR games are more well-known within the public, the Chinese government has high expectations for industrial applications of AR/VR, such as for virtual instruction manuals and virtual assistance.
The United States, China, South Korea, and Japan have been the forerunners in the 5G race. “For the winner, 5G will stimulate economic growth, establish geopolitical superiority, and even gain advantages in terms of military and intelligence powers. China has a unique position because its government does not just regulate the telecommunications market, but also actively shapes and encourages the market and its participants,” Kolta concluded.
These findings are from ABI Research’s 5G in China report. This report is part of the company’s 5G & Mobile Network Infrastructure research service, which includes research, data, and Executive Foresights.
5G Slicing Will be a US$66 Billion Market but First, Telcos Need to Recast Themselves
Physical industries are rapidly transforming on an unprecedented scale with digitization becoming a critical priority. End-to-end 5G network slicing is promised to be a growing part of that transformation but mobile service providers must change all aspects of their business before they address it. ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, forecasts that network slicing stands to create approximately US$66 billion in value for enterprise verticals including manufacturing, logistics, and transportation by 2026.
5G network slicing has become the focus of much attention in part due to its intrinsic ability to afford flexibility and dedicated resources tuned to different industrial use cases. Legacy networks and wired technology dominate in the fragmented industrial environment of today, a rigid arrangement that is not conducive to high productivity levels. “Industrial segments such as manufacturing, logistics, and automotive are pursuing digitalization and automation with vitality and substantial investments. 5G network slicing aims to serve as a stepping stone to drive productivity growth and enable the high-performance connectivity that underpins the dynamic, secure, and reliable interconnection of industrial systems and machinery,” said Don Alusha, Senior Analyst at ABI Research.
Despite illustrating substantial growth in the coming years and reaching US$66 billion by 2026, network slicing revenues will be a mere 6% of total mobile service provider consumer revenues during the same year. Making this a much bigger opportunity and one that provides major growth prospects will require mobile service providers stepping out of their comfort zone: they will need to radically improve their marketing messages to enterprise verticals, they will need to change their terminology and language to their B2B clients, the will need to invest in Proof of Concepts in previously unexplored areas, they will need to engage in new brand partnerships and finally, they will need to invest in creating customized solutions for enterprise verticals.
The adoption of 5G network slicing for manufacturing alone is expected to create a US$32 billion of value, at a CAGR of 96% through 2026. The second biggest revenue opportunity lies in the logistics sector, where the market is projected to increase from US$65 million in 2019 to US$20 billion in 2026, at a CAGR of 127%. “Our projections point to a healthy growth outlook but except for Telefonica, BT, and Deutsche Telekom, there is not much market activity of substance. The MSP ecosystem extends beyond this trio of operators, so we anticipate the wider community to start addressing enterprise verticals and entering an exploration phase in the coming years,” Alusha concluded.
These findings are from ABI Research’s 5G Network Slicing and Industry Verticals report. This report is part of the company’s Telco Digitization research service, which includes research, data, and Executive Foresights.
Cloud Video Segment Expected to Surpass 25% of the Enterprise Video Solutions Market by 2023
ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, forecasts the enterprise video solutions market to pass US$49 billion by 2023. While changes in viewer behavior and the shift from on-prem hardware to cloud services have posed challenges to some market segments such as encoders/transcoders, middleware, and conditional access (CAS), new opportunities in OTT and cloud video are adding fuel to the market – UHD and ongoing codec transitions (e.g.,HEVC) will also help balance out declines and slowing growth in some pay TV markets.
“Video services and operators are increasingly moving workflows and operations to the cloud – doing so allows companies to better scale operations both up and down to meet demand and helps lower CAPEX spend, particularly among those companies without extensive history in the OTT space. These changes also reflect the need for video platforms and services to be more flexible to meet the needs of a wider breadth of customers and, ultimately, end viewers,” explained Michael Inouye, Principal Analyst at ABI Research.
The video market is expected to grow at a 4.8% CAGR from 2017 to 2023, but the increasing trend of moving to the cloud will help the cloud video segment achieve a stronger 11.7% CAGR. Beyond the spread of cloud content and services, the industry is also looking forward to upcoming opportunities that will enrich the value proposition of content and, where possible, gain efficiencies to reduce costs.
“The video industry is an interesting space, with aspects of the market undergoing significant transitions and a regional diversity that sees subscriber losses in the United States but continued growth in others such as the Asia-Pacific. On the horizon: AI and advanced advertising are expected to help achieve some of the earlier stated goals around value proposition and efficiencies. In addition, other technologies and services, such as those in the smart home, will create new opportunities for operators to engage with customers – all of which will further redefine what it means to watch TV,” Inouye concluded.
These findings are from ABI Research’s TV as a Service report. This report is part of the company’s Video, VR & OTT research service, which includes research, data, and Executive Foresights.
About ABI Research
ABI Research provides strategic guidance for visionaries needing market foresight on the most compelling transformative technologies, which reshape workforces, identify holes in a market, create new business models and drive new revenue streams. ABI’s own research visionaries take stances early on those technologies, publishing groundbreaking studies often years ahead of other technology advisory firms. ABI analysts deliver their conclusions and recommendations in easily and quickly absorbed formats to ensure proper context. ABI Research analysts strategically guide visionaries to take action now and inspire their business to realize a bigger picture.
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