No.3473
Local 5G Solution Market: Key Research Findings 2024
Local 5G Solution Market Size in Japan Likely to Grow to 55,800 Million Yen by FY2030
Yano Research Institute (the President, Takashi Mizukoshi) carried out a survey of the local 5G-solution market in Japan and found out the penetration trend of 5G or IoT solutions by field such as manufacturing, construction, logistics, medical care, security, social infrastructure, stadium/live solution, etc., and the future perspectives.
Here discloses the market forecast for local 5G solutions, permeation trend by field, and trend of private 5G market.
Market Overview
Since FY2022 when behavior restrictions amid COVID-19 crisis was eased, introduction studies and proof of concept (PoC) have been underway for local 5G, that is the 5G network built within narrow areas such as within the buildings or premises of a company, a municipality, or an organization, after their applications for the radio station license to Ministry of Internal Affairs and Communications. For FY2023, as PoC cases and implementation-stage projects have increased, 152 businesses (only those that have consented to publication) have acquired local 5G licenses as of November 2023. The local 5G solutions market size for FY2023, based on the sales at businesses, is expected to reach 6,300 million yen, 217.2% of that of previous fiscal year.
The local 5G solutions market is currently in its dawning to introduction phase and is not likely to be pervasive until FY2025 or later. Keywords for the local 5G solution demand can be real-time response. remote monitoring, optimization, decision-making support, automation/automatic control, data-driven prediction/forecast/prevention, and value enhancement.
In addition to those local 5G solutions that are used by a single company or organization, there emerged are those solutions in the form of a platform for multiple companies and organizations to share or those in the form of a rental package (rental, subscription). Furthermore, by specializing the applications of local 5G network, lower operating costs are expected.
Noteworthy Topics
Private 5G Market Trends
In recent years, private 5G has gathering attention as a keyword to support digital transformation or digitalization at a general company, a municipality, or an organization.
Private 5G* is the managed service in which a mobile network operator (MNO) uses cellular 5G lines to provide a 5G network with the necessary bandwidth to a company, municipality, and organization in their buildings and premises.
Private 5G does not require user companies to apply for a radio station license, as an MNO installs the base station facility within the building or premise of a user company or organization and conducts maintenance support for that. Therefore, lower burdens for investment and operations are needed for the user side, which attracts attentions by companies, municipalities, organizations that are hesitant to invest in local 5G.
As technologies for 5G-based IoT solutions geared to manufacturing/factories are relatively new, it is highly probable for the users to face unexpected challenges and issues. Implementation of private 5G may allow the users to prevent from such issues, as there have been those businesses that have solutions for local 5G challenges, in the situation where use cases of IoT solutions are being accumulated.
Depending on how users view, some users consider that “private 5G is more promising than local 5G”, which makes private 5G a technological domain that cannot be neglected as one of directions of utilizing 5G.
*Private 5G is delivered through network slicing and is the managed service that provides secure connectivity between a closed-ranged service area of a user company and a cellular 5G (carrier) line.
Future Outlook
As local 5G solutions are projected to fully penetrate after FY2025, the substitution to 5G-based IoT solutions at the timing of upgrading the IoT systems with existing communication standards is expected to increase. When this happens, it is likely to be led by the implementation of cellular-5G based IoT solutions for the time being, alongside the deployment of local 5G and private 5G underway in parallel, with the anticipation of being used differently according to applications and purposes.
Currently, local 5G has its implementations or PoC being in progress at preceding IT vendors in their in-house factories or offices, or at advanced user companies represented by automakers. However, these projects are still overwhelmingly remained at their demonstration or PoC phases as of January 2024. Therefore, local 5G solutions are currently still in their dawning era.
Research Outline
2.Research Object： IT vendors, mobile network operators (MNOs), infrastructure providers, CATV operators, user companies, local governments, etc.
3.Research Methogology： Face-to-face interviews (including online) by expert researchers, survey via telephone, mailed questionnaire, and literature research
Local 5G Market
Unlike cellular 5G, a service provided by a mobile network operator (MNO) to wide areas, local 5G refers to the 5G network built within narrow areas such as within buildings or a premise of a company, a municipality, or an organization, after applying for the radio station license to the Ministry of Internal Affairs and Communications.
When compared to conventional cellular lines, Wi-Fi, Bluetooth, or wired networks, local 5G has advantages of high speed, large capacity (catering to massive data for movie streaming or for manufacturing machinery), low latency (in remote operation support such as collaborative robots and remote medicine), multiple connections (for urban data support such as at participation-style amusement in a stadium or for traffic flows, etc.,) which is expected to be uses as IoT solutions or used in autonomous driving by AGVs or robots.
Local 5G Solutions Market
The local 5G solutions market in this research has been calculated based on the sales at businesses that provide hardware, software, and services, targeting system/application development cost for building local 5G networks, communication modules, terminals/devices, spectrum usage/line usage and communication fees, platform/cloud usage fees, and operation and management costs.
No costs for local 5G network infrastructure facilities (base stations, etc.) or for construction fees for them are included.
＜Products and Services in the Market＞
System/application development costs, communication modules, terminals/devices, radio frequency usage/line usage and communication fees, platform/cloud usage fees, operation and management costs, etc.
Published Report
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