Description
5G will bring about fundamental structural economic changes, such as significantly lower broadband pricing as a whole, and also much greater flexibility for enterprise, industrial, and government market segments in terms of how they connect public to private networks. Future use cases for the 5G applications market are many and varied in terms of type, industry vertical focus, and requirements. Correspondingly, each scenario will have its own network configuration of requirements and parameters.
This is the most comprehensive research available addressing the LTE and 5G application market. This report evaluates cellular broadband applications and services including revenue and usage (subscribers/users) by LTE, LTE Advanced, LTE Advanced Pro, and 5G applications and services.
This 5G applications market report also assesses LTE and 5G in private wireless networks as well as market opportunities for Mobile Edge Computing (MEC) in public and private networks including the market for computing as a service. The report includes 5G application market sizing as well as LTE apps and services in terms of penetration and revenue for the following areas:
- Mobile Network Operator Provided Apps and Services in Consumer, Business, and Government Markets
- Computing as a Service (via Mobile Edge Computing) by Customer Type (Enterprise, Industrial, and Government)
- OTT Provided Apps and Services including VoIP, Messaging, Social Media, Video, Entertainment, and Productivity
- LTE, LTE Advanced, LTE Advanced Pro and 5G based Apps by Smart Cities and Suburbs, Exurban Areas, Rural Areas
- LTE Applications and Services by LTE User Equipment (LTE UE) Categories including Cat M1, Cat NB1, Cat 1, and Cat 4
- Apps and Services by LTE and 5G Device including Modems, IoT/M2M Modules, Smartphones, Wearables, and more
- LTE and 5G in Critical Communications by Segment (Public Safety, Homeland Security, Transportation, Utilities, Others)
- LTE and 5G Applications by Industry Vertical including Automotive, Government, Healthcare, Manufacturing, and Retail
- 5G Apps by Private Wireless, Industrial Automation, Critical Communications Services, Industry Verticals, and much more
- 5G Apps and Services by Category: Enhanced Mobile Broadband, Ultra-Reliable Low Latency Communications, and Massive Machine-Type Communications
The report also evaluates supporting technologies such as Artificial Intelligence in LTE and 5G by Technology, Customer Type, and Data as a Service. The report also assesses opportunities for Blockchain technology in 5G. For example, the report provides forecasting for Global Blockchain Driven LTE and 5G Applications Market by Connection.
5G Applications Market Dynamics
The commercial deployment and operation of 5G will bring very important benefits to the ICT industry. One of those will be massive Internet of Things (IoT) networks, which refers to the ability of deploying and operating IoT systems at a very large scale. As the size of IoT systems grow to large scale, their scope will also increase in terms of the impact on enterprise systems and consumer’s everyday lives.
IoT solutions will benefit greatly from the implementation of 5G as cellular providers deploy Low Power WAN (LPWAN) IoT network capabilities. Initial deployments of IoT LPWANs have been non-cellular solutions based on proprietary technologies. However, Mind Commerce sees emerging standards such as Narrowband IoT (NB-IoT) assuming a dominant role for certain IoT applications. We see many industry verticals willing to pay a premium over non-cellular LPWAN, enhanced flexibility, and improved capabilities associated with IoT on 5G networks.
The use of 5G for Industrial IoT (IIoT) networks in particular will be of great importance to enterprise IIoT in certain industry verticals such as agriculture, logistics, and manufacturing. For example, we see IIoT in agriculture benefitting through the use of Unmanned Aerial Vehicle (UAV) operation over 5G networks due to ultra-low latency and high capacity availability.
The 5G applications market will benefit from significantly higher bandwidth for general mobility applications such as anytime, anywhere that ultra-high-speed Internet access and ultra-high definition video. 5G will also enable critical communications by way of ultra-low latency communications. Thirdly, 5G will optimize IoT networks by way of radio frequency management that meets the needs of both narrowband IoT applications as well as those that require higher bandwidth, which may be on an on-demand basis.
Manufacturing, industrial automation, and robotics are key sectors that will also benefit substantially. Prior to 5G, teleoperation was largely relegated to fixed communications connections. The 5G applications market within the industrial vertical will support teleoperation anywhere there is 5G coverage, enabling many new consumer and industrial automation scenarios involving robotics. 5G enables ultra-reliable, low-latency capabilities for industrial automation.
New Network Capabilities for 5G Applications Market
5G will be significantly faster than LTE with much lower latency due to faster overall throughput. However, there are many challenges including the fact that the new radio component via millimeter wave (mmWave) RF has a high degree of attenuation (loss over the air and when hitting solid objects). Therefore, the industry needs to deploy smart antennas (with beamforming and MIMO). Also, the higher frequency mmWave RF is line of sight based because of the high degree of fading. Because of all of the aforementioned, there must also be many more cell sites deployed than ever before – like a factor of 10X or more.
5G will be based on a transformed Radio Access Network (RAN) and Core Network (CN) for carriers. There were changes with LTE, such as leveraging IP Multimedia Subsystem (IMS) for Voice over LTE (VoLTE). However, the changes with 5G are considerably larger, and the infrastructure is much more purpose-built with an emphasis on a Services Based Architecture (SBA) approach.
This SBA approach will include tight integration with edge computing networks as identified by the European Telecommunications Standards Institute (ETSI) for integration with Multi-access Edge Computing (MEC). This will be deployed in a manner in which MEC supports 5G to preserve the tremendous throughput and latency improvements that will be gained by using 5G versus LTE.
These throughput and latency improvements will facilitate the effective operation of latency-sensitive applications that rely upon Ultra Reliable Low Latency Communications (URLLC). Examples of URLLC dependent apps and services include UAV operation, autonomous vehicles, teleoperation (remote control of equipment and other assets from a distance), robotics, augmented and virtual reality, tele-surgery, haptic communications, and other critical communications such as public safety apps.
5G provides substantial bandwidth where needed as well as significantly lower latency for next generation applications and services such as virtual reality controlled teleoperation and other URLLC dependent apps and services.
Previously encumbered by a combination of technology gaps and consumer readiness issues, the global 5G applications market for immersive apps such as Virtual Reality (VR) is poised for considerable growth, providing abundant opportunities for service providers, content developers, and ecosystem component providers. Coupled with the deployment of gigabit Ethernet fiber, 5G will transform the VR market, leading to a fully immersive experience with haptic capabilities becoming embedded in many applications.
The use cases for future 5G applications market solutions are many and varied in terms of type, industry vertical focus, and requirements. Many of these use cases will involve IoT and/or be supported by AI algorithms. The role and importance of AI in 5G ranges from optimizing resource allocation to data security and protection of network and enterprise assets. However, the concept of using AI in networking is a relatively new area that will ultimately require a more unified approach to fully realize its great potential.
5G will make IoT scalable. Currently, IoT relies upon many proprietary, non-cellular means for Wide Area Network (WAN) communications. With the introduction of 5G support for “Massive IoT” via the Machine Communications support capabilities, Machine-to-Machine (M2M) networking will be able to become virtually as large as it needs to be for a given enterprise, network, system, etc. Stated differently, there will be the ability for many more low-power IoT devices with extreme coverage within a metropolitan area.
In addition, the 5G applications market will benefit from much improved general mobile broadband communications for things that consumers do today – mostly video-oriented if one is measuring usage on a data consumption basis. Expectations will transition from high definition to ultra-high definition video. We already have high definition voice, but Voice over 5G (Vo5G) will leverage IMS to provide an improved voice/audio experience in terms of integration with many applications such as virtual reality.
Vo5G will support voice/audio as a key component of communications for a wide variety of apps and services for many consumer, enterprise, and industrial solutions. Vo5G will utilize video or voice over NR infrastructure in coordination with voice or video over eLTE, EPS fall-back, and RAT fall-back. However, the first phase of cellular voice leverages VoeLTE to route voice call but offering enhanced and robust solutions over 5G NR require implementation of EPS FB and RAT FB. The 5G NR solution cannot represent all voice or video calls without the technical backbone of EPS FB and RAT FB.
Network Infrastructure Impact on 5G Applications Market
A critically important part of the core 5G network infrastructure is the IP Multimedia Subsystem (IMS), which represents a framework composed of computing and telecom architecture elements intended for delivering Internet Protocol (IP) based multimedia services with quality of service over multiple access networks from a common core.
IMS provides multimedia session control across multiple access networks with standardized quality of service control. It enables an operator to have a common ‘core’ across all its networks for communication services, and provides a relatively open environment for value added communication services. It also provides a framework for Voice over LTE (VoLTE) for high definition voice and Voice over 5G (Vo5G) for ultra-high definition voice communications.
IMS is not economically viable if the goal is simply to replicate existing services in a new architecture. The payoff of IMS is to develop and introduce new value-added services for incremental revenue at a lower cost per subscriber. Mind Commerce sees an important portion of those VAS applications being ultra-high definition voice enabled next generation apps such as virtual reality. In addition, we see emerging technologies, such as haptic Internet and robotic teleoperation will become commonplace thanks to 5G infrastructure.
5G radio infrastructure covered in this report includes Distributed Macrocell (5G Base Stations), Small Cells (Microcell, Femtocell, and Picocell), RRHs (Remote Radio Heads), C-RAN BBUs (Baseband Units) and Distributed Antenna System (DAS) equipment. IMS infrastructure covered in this report includes Home Subscriber Server (HSS), User Profile Server Function (UPSF), Breakout Gateway Control Function (BGCF), Media Gateway Controller Function (MGCF), and Media Resource Function (MRF).
In terms of the Radio Access Network (RAN) portion of 5G, mmWave radio frequencies fade considerably as compared to LTE, necessitating the need for at least ten times more antennas than 4G technologies require. In addition, 5GNR will require 5G smart antennas to optimize coverage, mobility, and minimize the need for hand-over from 5G to 4G RAN. Accordingly, the 5G applications market will be dependent upon smart antennas that use Multiple Input / Multiple Output (MIMO) at both the source (transmitter) and the destination (receiver) to improve signal quality.
In addition, 5G core networks will have new capabilities such as network slicing, which will enable carriers to support unique network configuration for customer and use-case specific requirements and parameters. 5G network slicing provides the ability to support Quality of Service (QoS) driven capacity allocation and latency limitations based on Quality of Experience (QoE) and other factors. This will enable carriers to support QoS and QoE requirements for 5G applications market solutions, which will be especially important for some enterprise and industrial customers.
The 5G applications market will be comprised of three service categories: (1) Enhanced Mobile Services, (2) Massively scalable Internet of Things (IoT) Networks, and (3) Ultra-Reliable and Low-Latency Communication for both mission-critical services (such as public safety and industrial automation) and latency-sensitive consumer services (such as Virtual Reality). A portion of these benefits will be based on the evolution of fourth generation (4G) Long Term Evolution (LTE) technologies as well as unique capabilities enabled by 5G New Radio (5GNR) based on new infrastructure supporting millimeter wave (mmWave) radio access network (RAN) equipment.
Mobile Edge Computing Impact on 5G Applications Market
Often used synonymously, MEC refers to Mobile Edge Computing or Multi Access Edge Computing with the former being more cellular network centric (LTE and 5G) and the latter terminology adopted by standards groups to generalize edge computing to reflect that it may be also be used by WiFi and other wireless access technologies. The distinction between Multi Access Edge Computing vs. Mobile Edge Computing for MEC largely ends with radio access and network type as almost every other aspect is the same including localizing computing (e.g. computation and storage closer to the end-user), network element virtualization, software and service-centric operations.
In cellular networks, edge computing via MEC is beneficial for LTE, but virtually essential for the 5G applications market. This is because Mobile Edge Computing facilitates optimization of fifth generation network resources including focusing communications and computational capacity where it is needed the most. Mind Commerce research findings indicate a strong relationship between edge computing and 5G. In fact, if it were not for MEC, 5G would continue to rely upon back-haul to centralized cloud resources for storage and computing, diminishing much of the otherwise positive impact of latency reduction enabled by 5G.
Taken together, 5G and MEC are two technologies that are poised to fundamentally transform many industry verticals. Manufacturing, industrial automation, and robotics are key sectors that will benefit substantially. For example, prior to 5G and MEC, teleoperation is largely relegated to fixed communications connections. 5G and MEC will enable teleoperation anywhere there is 5G coverage, enabling many new consumer and industrial automation scenarios involving robotics.
Network Connectivity and Transport Impact on 5G Applications Market
5G will “reinvent” connectivity as there will be a very credible alternative to cable and fiber for business customers. In addition, there will be competition even for WiFi as some critical communications will require 5G. However, 5G is also be a huge investment and the near-term ROI is very focused on point-to-point solutions for enterprise, industrial and government customers that require alternatives to fiber and/or untethered broadband. 5G is also important for the front-haul, mid-haul, and back-haul infrastructure market, collectively referred to as “x-haul” market. The transport networks that will be impacted by 5G x-haul include fiber, DWDM, and microwave, as well as switching/routing.
Indoor Wireless Impact on 5G Applications Market
5G does not penetrate buildings well due to high attenuation of higher frequencies and millimeter wave RF. From that perspective, 5G does not complete with WiFi. However, there are many Internet of Things (IoT) applications emerging for which WiFi is not reliable enough such as a device that wakes up briefly to send a signal that may be very important like boiler pressure.
This coupled with the fact that private wireless (first with LTE and later with 5G) for indoor wireless applications is picking up steam, will put a lot of pressure on WiFi for enterprise, industrial, and government sectors for certain use cases. For critical communications and IoT apps, 5G also represents an alternative to WiFi that provides the type of URLLC support needed for certain mission-critical solutions such as those found in industrial automation.
LTE vs. 5G Applications Market for Services and Solutions
While 5G deployment is leveraging some new frequency bands, and will entail a 10 to 100 times expansion of number of cells, much of it will NOT be mmWave. Instead, a big part of the 5G applications market is driven by the evolution of 4G/LTE (Long Term Evolution standard). In fact, technology improvements for LTE are ongoing as it will continue to be relied upon for many applications and services for a long time. Accordingly, vendors to continue to optimize LTE capabilities such as improved uplink capacity to support video and wireless communication to cloud-based applications. LTE adoption will continue at a fast pace with many innovations overlapping with 5G operations.
In the near term, the 5G applications market is not anticipated to consist of a substantial amount of consumer apps and services as compared to LTE. Instead, there will be mainly extensions to existing services such as much faster portable hotspots, improved browsing, and video viewing. There will also be some cannibalization of fixed network offerings due to 5G fixed wireless access for business, and to a lesser extent, as a consumer ISP alternative. Longer term, Mind Commerce sees 5G acting as a launch pad for enhanced consumer wireless services such as augmented reality, virtual reality, and cloud gaming.
We do not have a vision of personal drones following people anywhere they go, nor do we envision people walking around everywhere with VR goggles. However, we do see AR, VR, cloud gaming, personal UAV, connected vehicles, and other consumer enhanced broadband services as solidifying cellular service providers within the wireless ecosystem as the go-to data pipe for virtually any digitization outside of buildings. Inside buildings, WiFi will continue to be important, especially since 5G has penetration issues. However, it is important to note that this applies mainly to the consumer and SMB market. For business customers, indoor wireless solutions will be comprised of 5G and WiFi.
It is important to understand that there are fundamentally different types of services supported by 5G, each of which have very unique needs. More specifically, the 5G applications market consists of the following service categories:
- Enhanced mobile broadband (eMBB): Mobile broadband based apps will use MEC for more efficient operation. Localized processing will allow apps such as cloud-based gaming to run more smoothly and efficiently due to localized data caching and access to CDNs rather than routing all data through the network core. This will improve overall throughput, reduce latency, and minimize carrier resources needed to support data-hungry apps.
- Ultra-reliable low-latency communications (URLLC): MEC will be particularly important in support of latency-sensitive apps and services for various consumer, enterprise, and industrial use cases. The combination of 5G and MEC is expected to reduce network latency significantly, which will enable many previously tethered-only applications and services such as VR, UAV control, autonomous vehicles, real-time remote control, haptic or tactile communications, and more.
- Massive machine-type communications (mMTC): MEC will facilitate an entirely new class of low-power devices that rely upon MEC equipment for processing. Stated differently, some IoT devices will be very light-weight computationally speaking, relying upon edge computing nodes for most of their computation needs.
Enhanced Mobile Broadband (eMBB) includes:
- Web browsing
- Video
- Mobile Office/Productivity (Smart Workplace)
- Connected Vehicles
- Others (e.g. miscellaneous Smart City apps and services)
Ultra-Reliable Low Latency Communications (URLLC) includes:
- Augmented Reality
- Virtual Reality
- Telepresence (includes Holographic calling)
- Teleoperation/Tele-robotics
- Autonomous Vehicles
- UAV/Drone Operation]
- Public Safety
- Smart Buildings
LTE and 5G Private Wireless Impact
The 5G applications market is going to have much more reliance upon enterprise, industrial, and government customers, and many of them will go with private networks for their own facilities. Some of those private networks are going to be in competition with the carriers as the likes of Nokia are actually competing with their own customer (e.g. carriers) by providing them.
Enterprise, industrial, and government segments will have private LTE and private 5G deployed that will be supported by Mobile Edge Computing (MEC) platforms. Some of private wireless operations will be carrier owned/managed and some owned by the business customer and either managed by the carrier or most likely some other third party that provides orchestration and/or application management.
Private wireless deployments will leverage both licensed and unlicensed (spectrum) cellular as well as WiFi and other wireless access in the local area. While the 5G applications market will not rely upon WiFi for certain mission critical industrial functions, WiFi will persist in an enterprise and government facilities, sharing edge computing resources, hence the designation “multi access” fits for the ETSI modified MEC acronym for wireless edge computing.
For those business customers that choose at least a portion of their own equipment, colocation (e.g. leasing space at data center facilities where a business can rent space for servers and other computing hardware) is an important option. Colocation is a dominant trend for enterprise in particular as they build-out their IT (and now edge compute) infrastructure.
Additional LTE and 5G Applications Market Related Research
Those interested in this report will also be interested in the following:
Multi Access Edge Computing Market
6G Technology Market
