Private 5G Networks Market in Japan: Key Research Findings 2020
Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic 5G solutions market, and found out the use of 5G by fields (manufacturing, distribution, medical, security, and social infrastructure), the penetration trends of IoT solutions, and the future outlook. Here, forecasts on private 5G solutions market and penetration trends by field are covered.
The 5G (the fifth generation mobile network services) has a great functional advantage over existing 3G or 4G/LTE, such as high speed large capacity, low-latency, and concurrent connection. The private 5G network constructed specifically for companies, municipalities, or school organizations on premise/within buildings is expected to utilize its capabilities for video streaming, remote operation assistance, IoT (Internet of Things) solutions connecting vast arrays of devices concurrently, and AGV (Automated Guided Vehicles) in specific areas.
Today, many cases of IoT solutions using private 5G are under experiment/in the stage of Proof of Concept (PoC); at the beginning of 2020, 3 major MNO (Mobile Network Operators) and IT vendors had planned to conduct verification experiments on IoT solutions using various private 5G networks. Nevertheless, as huge impact of the novel coronavirus has jeopardized continuance of some of those experiments; significant progress cannot be foreseen till FY2021. Under these circumstances, the private 5G solutions market is projected to attain 300 million yen for FY2020, and 2 billion yen for FY2021 (based on the sales at businesses).
IoT Solutions for Manufacturing/Factories Using Private 5G
From FY2020, about 10 cases of verification tests/PoC of IoT solutions for manufacturing/factories using private 5G have started. Still, because IT investments were held down/postponed due to the influence of coronavirus, commercialization/installations are unlikely to start until FY2023 -2025.
For instance, by FY2023, installation of IoT solutions are anticipated at smart factories of automotive manufacturers (OEM), plant manufacturers, and IT vendors that are already making progress in digital transformation. Further, this is expected to have a spillover effect on other manufacturers with IoT-installed factories.
For the IoT solutions for manufacturing/factories utilizing private 5G is expected to grow in the areas of IoT monitoring and maintenance of factory equipment and production machines, the market is projected to expand to 9.5 billion yen by FY2025 (composition ratio 20.2%), the time when labor shortage will become even more evident.
As IoT solutions using 5G starts to replace IoT solution systems using conventional network standards of 3G/4G/LTE, certain ratio of these will be substituted by IoT solutions using private 5G.
Therefore, the market growth is expected to be accelerated, and the private 5G solutions market for FY2024 is projected to reach 30 billion yen, on to 47 billion yen by FY2025 (based on the sales at businesses). Incidentally, approximately 10% of the IoT solutions market using 5G (455 billion yen) in FY2025 is assumed to be the IoT solution systems using private 5G.
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