5G. A growth market for the connected world.
Growing interconnectedness is pushing traditional mobile networks to their limits. The proliferation of 5G technology may be the solution to these problems in the telecommunications sector. 5G enables unprecedented line speed for mobile data, creating completely new areas of application for mobile devices.
5G enables new areas of application
The digitalization of society and the economy is progressing rapidly. Fifth generation mobile communications technology (5G) could accelerate these changes even more. The promises of 5G technology are enormous. 5G will enable huge amounts of data to be transmitted quickly and wirelessly.
It is precisely this massive capacity that makes the proliferation of 5G networks such an important topic right now. Debates during the 2019 Mobile World Congress (MWC) made clear that 5G offers a number of applications: for virtual and augmented reality, artificial intelligence, automation, the Internet of Things (IoT), and healthtech.
Uninhibited growth of mobile data
The Internet of Things is on the precipice of strong growth. According to some estimates, the number of connected devices will triple to 25 billion by 2025. Over the same period, the industry's global turnover should rise fourfold, reaching 1.1 trillion US dollars. These figures reinforce the assumption that the 5G standard will drive the next phase of digitalization. In the near future, the annual growth rate of global data traffic is projected to be approximately 30 percent. According to forecasts by the telecom equipment manufacturer Ericsson, about a quarter of all data will be flowing over 5G networks by 2024.
Billions of connected devices will be in operation by 2025.
Expansion of 5G creates new investment opportunities
New telecom infrastructure is needed for the development of 5G networks. This will require significant investments. The infrastructure market for the 5G radio access network is expected to flourish globally, reaching more than USD 7 billion by 2022. These developments mean positive growth opportunities for telecom equipment manufacturers and semiconductor companies with a strong connection to the launch of the 5G standard. However, infrastructure providers will also benefit from the expansion of 5G.
The economic sectors that will benefit from 5G technology
Because the demand for larger bandwidths is growing, wireless tower operators in particular should see strong growth thanks to the upcoming implementation of 5G. In addition, the transfer distance between towers must be reduced in order to ensure seamless 5G coverage. As a result, more radio towers will be required. This is also a good sign for construction companies, which will build and maintain the growing 5G networks. The rapid development and anticipated rise in demand make 5G a fascinating topic for investors.