The global market for private 5G networks is projected to increase at a CAGR of 50 % between 2024 and 2032. A 5G network, whether private or public, is a dedicated Local Area Network (LAN) that increases internet access for industrial, enterprise, and other users. It is projected that the expanding network services of the following generation will meet the demand for vital wireless communication for industrial operations, public safety, and the connectivity of vital infrastructure. In addition, the demand for ultra-reliable, low-latency connectivity for Industrial Internet of Things (IIoT) applications, such as collaborative robots, industrial cameras, and industrial sensors, is the leading factor propelling the global market.
As industry 4.0 has progressed, many key industrial incumbents, such as ABB Ltd., Siemens AG, and Mercedes-Benz AG, have utilized sensor-based technologies and industrial robotics extensively to achieve improved operational efficiency and productivity. The private 5G network is vital for providing smooth and secure internet connectivity to the IIoT devices outlined previously. Moreover, the need for Time-Sensitive Networking (TSN) and real-time-based networking is increasing for mission-critical applications in a variety of industries, including manufacturing, oil and gas, aerospace, and transportation. In order to facilitate high-speed bandwidth communication during TSN and real-time networking across industries, it is anticipated that the demand for a private 5G network would expand substantially over the foreseeable future.
A private 5G network offers end-to-end security for all businesses, safeguarding their data and infrastructure against any threats. In addition, it is envisaged that it would play a crucial role in instances where information confidentiality is of the utmost importance. It is projected to be in high demand in government and public safety applications, as well as enterprise data storage applications, from 2023 through 2030. In addition, the growing trend toward digitization in the oil and gas business has increased the need for particularly dependable and secure bandwidth. Thus, it is anticipated that the demand for private networks with a high bandwidth would expand, notably within the Organization of the Petroleum Exporting Countries (OPEC).
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It is expected that the Covid-19 pandemic will delay the installation of improved private 5G infrastructure due to the requirement for additional trials and testing to guarantee the stability and processing performance of 5G standalone networks. The ongoing pandemic has had further effects on telecom regulatory authorities around the world, slowing their preparations for the 5G spectrum auction and hindering industry growth. Various countries, including those of the United States, France, Spain, and Australia, have delayed the 5G spectrum auctions on a variety of frequencies, including Sub-6 GHz and mmWave. In addition, countries such as China and the United States have noticed a decrease in the exports of telecom equipment for 5G radios and end-user devices. Thus, it is anticipated that this factor will constrain market expansion throughout the forecast period.
The hardware segment provided more than 55.5% of the industry's revenue in 2023 due to the expanding global deployment of core networks and backhaul and transport equipment. The majority of the component types in the hardware category include Radio Access Network (RAN), core network, backhaul, and transportation. Installation and integration, data services, and maintenance and support are the three important services that comprise the services component. In addition, as cloud-based RAN, core, and edge networks become increasingly prevalent, the software market is predicted to witness robust expansion in the future years. This would help customers reduce their overall CAPEX during installation.
Leading network providers including Nokia Corporation, Qualcomm Technologies, Inc., and Ericsson are deploying feasible equipment to enable back-end operations for the distribution of high-speed bandwidth. Thus, it is expected that by the end of 2023, the core network segment's market share would have increased significantly. Moreover, the desire for increased connectivity to connect millions of sensors in industrial facilities is likely to result in the widespread adoption and installation of RAN equipment over the forecast period. In addition, with an increasing emphasis on creating a private 5G core network for dedicated customers to securely manage their data, the market for installation and integration services is anticipated to increase from 2023 to 2030.
Sub-6 GHz accounted for approximately 85.2% of the market's revenue in 2023. The sub-6GHz frequency spans mostly sub-6GHz spectrum regions in the low and midbands. Recent releases of sub-6 GHz frequencies for 5G service provision have been made by governments of key nations, including China, the United States, Japan, and South Korea. mmWave frequencies are high-band frequencies that permit extraordinarily high connectivity with minimal delay. When ultra-reliable connectivity is required, especially for infrastructure connectivity, these frequency ranges would be most advantageous.
Also, a number of national governments in prominent nations have made mmWave frequency bands available for private 5G services. The Federal Communication Commission (FCC) declared the mmWave frequencies 24.25-24.45 GHz, 47.2-48.2 GHz, 24.75-25.25 GHz, and 38.6-40 GHz, among others. Russia, Japan, South Korea, and Italy are among the nations that have released mmWave frequencies for expanded data services. As a result, the focus of major federal governments on the release of mmWave frequencies is predicted to boost the growth of the mmWave market over the next seven years.
In 2023, the unlicensed/shared category accounted for more than 70.0% of the market's revenue and is projected to increase at the highest CAGR from 2024 to 2032. The rapid growth is a result of the rising demand for affordable, high-speed private 5G networks. Unlicensed frequency bandwidth is easily available and desired for machine-to-machine communications on a massive scale (mMTC).A licensed spectrum is marginally more expensive than an unlicensed/shared spectrum because a company must acquire an entire license for a given frequency bandwidth in order to improve and secure internet connectivity. Communication Service Providers can also offer licensed spectrum access (CSP). In addition, numerous countries, like as the United States and Germany, use licensed spectrum for industrial and mission-critical applications. Thus, the increasing demand for a highly secure connection in mission-critical applications such as Autonomous Guided Vehicles (AGV) is expected to propel the licensed spectrum segment over the forecast period.
The manufacturing/factories segment held the largest revenue share in 2023, surpassing 15%, and is projected to expand at the highest CAGR over the forecast period. The expansion is attributable to the rising demand for private 5G services that enable seamless communication between various devices, such as Ultra-HD cameras, extended reality headsets, and AGVs. In addition, the increased demand for uninterrupted machine-to-machine communication is expected to fuel the segment's expansion between 2023 and 2030. Numerous industry verticals opt for private 5G networks, including manufacturing, energy and utilities, transportation and logistics, aerospace and defense, oil and gas, mining, and government and public safety.
Numerous governments and public safety organizations are developing a private 5G network for a number of purposes to enhance emergency responder communication. In addition, demand is predicted to rise as the need for businesses and organizations to securely manage their data on-premises increases. In addition, the adoption of private, encrypted networks to gain high-speed internet connectivity for energy-generating and distribution applications is anticipated to expand significantly in the energy and utility industry. The need to better connectivity to ships and containers/vessels for remote monitoring is expected to promote the adoption of a private 5G network in the transportation and logistics industry throughout the forecast period.
North America captured the largest revenue share in 2023, more than 25%, due to the existence of multiple private 5G solution providers, such as Qualcomm Technologies, Inc. In addition, the huge growth in investments for constructing private 5G network infrastructure by key service providers, such as AT&T Inc. and Verizon Communications, is expected to assist North America in attaining a significant market share. In addition, the strong deployment of several industrial sensors by major automakers such as Ford Motor Company and General Motors Corporation is predicted to generate significant growth opportunities in the region. The rising need for Ultra-reliable Bandwidth Low Latency Connectivity (URLLC) across many verticals, such as public safety, oil and gas, and aerospace and defense, is predicted to boost regional market growth.
Asia-Pacific is predicted to be the fastest-growing geographical market between 2024 and 2032. Many enterprises and their large investments in creating automated manufacturing in the region are responsible for the growth. Moreover, considerable expenditures to acquire 5G spectrum in key nations such as China, Japan, South Korea, and Australia are likely to contribute to the expansion of the regional market. Major industrial businesses, including as Siemens AG, ABB Ltd., and Mercedes Benz, are anticipated to make a significant shift toward the development of autonomous industries, hence accelerating the adoption of private 5G services in key European nations, such as Germany and the United Kingdom.
Leading market participants are proactively developing collaborations with industrial manufacturers in order to create a test center leveraging a private 5G network for testing a variety of automated industrial devices. Qualcomm Technologies, Inc. collaborated with Microsoft Corporation in February 2023 to provide chip-to-cloud technologies for the effective global deployment of a private 5G network.In addition, our collaboration will aid in the comprehension of actual industrial installations on a next-generation private network. Major market actors prioritize the establishment of collaboration agreements for the implementation of a private 5G network for certain applications. In February 2020, Vodafone Ltd. collaborated with Lufthansa Technik to establish a private 5G network campus at Hamburg Airport in Germany. This strategic agreement will enable Lufthansa Technik to modify the design of the network to meet specific requirements. Telefonaktiebolaget is a leading participant in the global private 5G network market. Telefonaktiebolaget LM Ericsson, Nokia Corporation, Samsung, ZTE Corp., Deutsche Telekom, Juniper Networks, AT&T Inc, and Other Notable Players.