According to a new research report published by MarketsandMarkets, the global Small Cell 5G Network Market size is expected to grow from USD 626 Million in 2020 to USD 2.413 Billion by 2025, at a Compound Annual Growth Rate (CAGR) of 31% during the forecast period. The major growth drivers for the market include the increase in mobile data traffic, the emergence of Citizen broadband radio Services (CBRS) band, and the minimization of Capital Expenditure (CAPEX) and Operational Expenditure (OPEX).
COVID-19 Impact on Global Small Cell 5G Network Market
The outbreak of the COVID-19 has had a significant impact on the growth of the global small cell 5G network market with some regions impacted more than others. In North America, the US is expected to be highly impacted by the COVID-19 outbreak because of its dependency on China as a major chip and equipment supplier for the telecommunication industry.
The blacklisting of Huawei Technologies due to the US-China trade war has resulted in high tensions between the two countries, and the COVID-19 outbreak will only cause further damage. In Europe, most of the countries including the UK, Italy, and Germany are hit by COVID-19. In Italy, 5G rollout plans are badly hit due to COVID-19.
In APAC, despite being the epicenter of COVID-19, China has maintained its dominant position as a global 5G leader. With the number of COVID-19 cases in China slowing down, the country is easing restrictions, and manufacturing companies are resuming their production facilities. The outbreak of coronavirus is expected to result in the increasing implementation of industrial automation across processes and discrete manufacturing, eCommerce, and logistics and transportation sectors.
Middle Eastern countries are severely impacted by COVID-19. It is expected to slow down several investment activities in the region focused on smart city infrastructure, the preparation of FIFA World Cup Qatar 2022, and the implementation of industrial automation technologies. This would impact the deployment of small cell 5G networks in the region.
Latin America has become a hotspot of the COVID-19 pandemic intensified by weak social protection, fragmented health systems, and profound inequalities. The pandemic has impacted the 5G auction schedule, and also the 5G supply chain in the short- and long-term.
Driver: Emergence of citizens broadband radio service band
The CBRS band is the key component driving the small cell 5G network market. The band offers a tremendous new spectrum resource that can be allocated for indoor mobile networks. The use of the CBRS spectrum band for indoor frees up valuable licensed spectrum which would otherwise have to be allocated for indoor use. It also eliminates the possible co-channel interferences between macro and indoor networks.
CBRS small cell enables multi-operator support and offers cost-effective mobile coverage solutions for third-party neutral host providers and large enterprises. CBRS's small cell network simplifies network integration efforts and can enhance the user experience as compared to Wi-Fi offloading.
Restraint: Poor backhaul connectivity
The major backhaul challenge that mobile network operators had to deal with up to 5G network includes ultralow latency of ~1 Millisecond (ms) (roundtrip) connectivity requirements. Small cells are deployed at high rate network congestion places or where macrocells coverage is poor, and backhaul and power are usually not available.
Radio backhaul is one of the potential solutions for this issue, but unit size reduction and throughput testing is a must for the small cell deployment, which may result in increased deployment cost. Unavailability of an alternative backhaul solution creates a significant barrier for the proper deployment and working of small cells. Thus, to overcome such issues, service providers must have a strong service delivery process that is reliable and flexible to terminate backhaul services in a variety of non-traditional locations, such as billboards, telephone poles, and sides of buildings.
To tackle the backhaul connectivity problem, denser small cell deployment is required under 5G network, and over some time if the issue of poor backhaul is not resolved then vendors may need to find alternative backhaul options such as Wi-Fi and next-generation satellites to satisfy service expectations.
Opportunity: Emergence of 5G
The small cell market is driven due to emerging 5G technology and its increasing deployment rate. The high speeds and low latencies of 5G networks lend themselves to the small cells 5G network market.
Next-generation wireless networks will be essential to solve the issue of mobile traffic congestions. Supporting policies have been drawn by the governments across the globe to assist the industry in R&D and strive for 5G commercialization.
China is expected to implement 5G technology for a multitude of life-transforming applications from 3D video to immersive media and audio quality due to its ultrahigh data rates, enhanced capacity, and reduced latency. China is planning to reach 576 million 5G connections by 2025, almost 40% of 5G connections globally.
Small cells are a perfect fit into the 5G revolution as they provide increased data capacity and assist service providers in reducing the overall cost by eliminating expensive rooftop systems and installations or rental costs.
The small cell 5G network also helps to improve the performance of mobile handsets, as it transmits at lower levels, which effectively lowers the power of cell phones and substantially increases their battery life.
An indoor segment to constitute a larger market size during the forecast period
The indoor segment is expected to be in high demand, due to its wide range of functionalities, such as high indoor network connectivity and improved network coverage. The deployment of indoor small cells is more due to the major deployment of small cells in public places, such as stadiums, shopping malls, college campuses, and residential buildings.
The 5G indoor small cell market space is expected to grow significantly during the forecast period, as people spend most of the time indoor and they are unsatisfied with their indoor cellular connection performance. According to the telecom operator, Ericsson, people spend 90% of their time indoors and 60% of the users are unsatisfied with their indoor cellular connectivity.
Among radio technologies, the 5G NR standalone segment to grow at a higher CAGR during the forecast period
3rd Generation Partnership Project (3GPP) has completed the specification for the 5G New Radio (NR) non-standalone technology, which would be rollout in the early 2019 and the 5G NR standalone version is expected to be available by 3rd or 4th quarter of 2019. 5G NR standalone solutions are expected to be more effective than 5G NR non-standalone solutions.
5G NR standalone solutions are expected to have various new in-built capabilities. In the early phase of 5G deployment, small cell deployment for 5G NR standalone segment is expected to be in a niche stage and projected to grow exponentially during the forecast period.
North America accounts for the largest market size during the forecast period
The global small cell 5G network market by region covers 5 major geographic regions, namely, North America, Asia Pacific (APAC), Europe, Middle East and Africa (MEA), and Latin America. North America is estimated to account for the largest market size during the forecast period. North America is an eminent leader in adopting advanced technologies.
Operators across North America are expected to deploy small cell solutions on their 5G mobile infrastructures; for example, AT&T, Verizon, Sprint, and T-Mobile have shown a positive approach toward commercializing 5G networks. These operators have signed billion-dollar deals with network equipment providers, such as Nokia, Samsung, Ericsson, Huawei, and ZTE, to build up their 5G network infrastructure.
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