The telecom industry always expected that taking the next step in 5G network evolution, moving to full 5G Standalone (5G SA) networks, would be a heavy lift. And indeed, 5G SA network deployments saw sluggish growth last year, largely due to the technical challenges of deploying and integrating new, cloud-native 5G Core technologies. This year, however, we expect the market to accelerate. What’s changed? For the first time, the demand for new 5G SA capabilities, and the supply of network equipment and devices to enable them, are finally aligned.
On the supply side, we’ve seen a huge volume of new suppliers bring 5G SA offerings to market. That includes more than 17 network equipment manufacturers (NEMs), along with the 80+ 5G SA modems and chipsets now available for end devices. Among devices themselves, there are now more than 1,400 device types in the market that can support 5G SA. Here at Spirent, we’ve also seen a huge wave of testing from customers preparing to launch premium 5G SA services including Voice over 5G New Radio (VoNR), network slicing, and reliable low latency solutions for industrial applications. Naturally, telecom networks that can support these services are also growing, and we anticipate more than 100 5G SA networks will be commercially deployed by early 2025.
Clearly, suppliers see a 5G market that’s ready to scale. And for good reason: demand for next-generation 5G SA capabilities has officially begun ramping up. In particular, we’re seeing significant customer demand in three key areas:
- Enterprise private networks that will require 5G SA capabilities like guaranteed throughput and availability, low latency, and security
- Gaming and extended reality (XR) applications that require consistent throughput and very low latency
- Government/military applications, especially in remote areas that require secure, reliable connectivity
Demand for 5G SA will continue to grow for use cases like these throughout 2024, but don’t expect an explosion of new 5G SA deployments overnight. Rather, customers will pursue a controlled growth strategy, starting with smaller initial deployments and then scaling out over the next few years.
Prediction: Extended reality will move from early pilots to real-world applications
The market has been talking about XR and Augmented Reality (AR) for several years as a potential “killer app” for 5G. In 2024, that talk becomes reality. Look for a wave of new XR applications to hit the market, thanks to a combination of growing customer demand and newly available XR devices and network capabilities.
On the demand side, AsiaPac will initially lead the way in XR deployments. That’s partly due to the large gaming industry there, but major government initiatives in the region are also pushing XR for military and industrial applications. The rest of the world won’t be far behind, as XR applications gradually spread to other markets throughout 2024 and 2025.
Why are we so confident that the XR market really is about to blow up? Because the biggest consumer electronics manufacturers in the world are banking on it. A large, growing pipeline of premium XR/AR headsets will hit the market in 2024, just as new 5G SA and Wi-Fi 6 and 7 capabilities needed to support them go live in many markets. This kind of massive investment among big consumer brands doesn’t happen in a vacuum. It reflects growing acceptance that customers want XR applications and will pay for them.
Relatedly, growing XR adoption throughout 2024 will push service providers to monitor and guarantee quality of experience (QoE) for XR services via Service-Level Agreements (SLAs). We expect to see QoE targets expand beyond traditional audio/video quality and latency metrics to address other characteristics, such as thermal (i.e., How hot do headsets get when running AR/XR applications?), battery life, weight, and overall comfort. The focus on these metrics will be driven by enterprises using XR for business applications (training, assisted maintenance, remote support), as well as for gaming, where users will wear XR headsets for long periods of time.
Prediction: Service providers will invest in automation and AI to fuel digital transformation
5G isn’t the only priority for service providers next year; look for continuing, accelerating investment in digital transformation initiatives to improve business agility and capital efficiency. Many such efforts will focus on cloud migration programs, especially Operational Support Systems (OSS) transformation. We also expect increasing service provider focus on automation.
Initially, most automation initiatives will be dominated by basic machine learning (ML), as AI applications for automating complex service provider networks are still in their infancy. For many operators, big questions remain around the costs of building and training models, the risks of training on poor or biased data, and looming regulatory uncertainty around AI in some markets. As a result, we expect 2024 automation efforts to focus on lab consolidation, automating specific network lifecycle and DevOps processes, and cloud migration, where automation will become increasingly important as service providers embrace more complex multi-cloud/hybrid cloud environments.
One particularly exciting area for service provider automation: improving energy efficiency. We expect intelligent automation to provide early wins in 2024 for service providers seeking to lower energy costs and reduce CO2 emissions. As these efforts evolve, especially paired with more advanced AI, operators will have an opportunity to achieve huge sustainability gains across their entire network and operational footprints in 2025 and beyond.
Prediction: AI will continue to drive data center evolution
AI is already transforming data centers, triggering massive investments by large and medium-size cloud service providers to build out AI fabrics to keep pace with demand. In 2024, look for intense focus and investment in GPUs and other back-end infrastructure for large learning clusters. Cloud service providers will also be looking to beef up front-end inferencing and investing in faster interconnect technologies to enable it. We expect Ethernet to dominate these front-end networks, and for 800G adoption to grow rapidly among Tier-1 cloud service providers next year as 51.2 Tbps switches reach the market.
Even in the back-end, during 2024 and 2025 we will see new network designs come to the fore that allow for high-speed Ethernet as a viable alternative to InfiniBand. Designed for high-performance computing, proprietary InfiniBand technology can deliver the needed throughput and latency, but Ethernet offers a secure, ubiquitous, and cost-effective option. Look for a gradual evolution beginning next year, as cloud service providers start deploying Ethernet in parallel to InfiniBand. Indeed, we expect more cloud service providers to view Ethernet as essential for the long-term evolution of AI infrastructure within the data center, both front- and back-end, simply due to the huge volume of processing that AI demands.
Prediction: More service providers will start using network digital twins
Across the telecom industry, service providers are advancing towards the end-to-end, AI-powered, self-driving networks of the future. They won’t reach the end of that journey overnight, but in 2024, they will take a major step forward with growing adoption of Network Digital Twins.
Digital Twins can help service providers overcome some of their most pressing operational challenges—chiefly, the time-consuming, error-prone manual processes that they typically rely on today in areas like maintenance engineering. Traditionally, maintenance upgrades and changes to the live network must be performed during maintenance windows. Even then, manual maintenance processes still frequently introduce errors and disrupt customers. This is because modern real-world networks are just so complex, it’s impossible to fully test out many changes in-depth before implementing them. Enter Network Digital Twins.
By maintaining highly accurate, real-time virtual models of the network, service providers gain the flexibility to more thoroughly validate changes before applying them. Paired with growing use of automation, they can experiment, evaluate, and learn more quickly how to optimize new service deployments, all while reducing errors and outages in the live network.
Prediction: Private networks will continue gaining ground as both customer demand and service provider capabilities advance
The market for Enterprise Private Networks saw slow but steady adoption throughout 2023. In 2024, we expect Private Networks to see significant growth—and become a meaningful source of incremental revenue—thanks to rising demand from enterprises, as well as government and military customers.
Among early adopters last year, commercial Private Networks typically showed an ROI within 6 months or less. Indeed, for certain 5G-enabled use cases, customers demonstrated impressive business outcomes in reducing downtime and improving productivity. Customers saw big wins in areas like:
- Ultra-high-definition video monitoring: Private Network-enabled “AI vision” solutions have many potential applications, but customers have found it extremely valuable in areas like factory supply line monitoring and fault detection. Ultra-HD video monitoring can detect damage to manufactured components, in real time, that would be difficult or impossible to notice with the human eye. These solutions can prevent costly production errors or damage to manufacturing equipment, avoiding hugely expensive repairs and downtime.
- Augmented reality: Many large enterprises—including service providers—face extremely high costs for remote maintenance. For communication networks, pipelines, power grids, and other infrastructure with a large, distributed footprint, faults or breakages typically require expert engineers to be dispatched out to remote locations. As a result, repairs often translate to multiple days of expensive downtime and lost productivity. With Private Networks capable of supporting AR, however, onsite personnel can use AR to do things like overlaying schematics on equipment and performing real-time guided repairs. Use cases like these allow less skilled local employees to fix more problems, much more quickly and inexpensively.
- Government and military: Military agencies have also been exploring 5G Private Networks and AR tools to support maintenance and training activities in the field. At forward operating bases, for example, they have urgent requirements to deploy and maintain machinery and vehicles, and may not be able to wait for an expert engineer. With Private Networks and AR, military and government agencies can extend enhanced capabilities and insights anywhere, even to the most remote, inhospitable locations.
These use cases hold enormous potential for the service providers enabling them, as well as their customers. In a recent survey conducted by STL Partners, enterprise stakeholders expressed willingness to pay a premium for Private Networks—provided that operators can guarantee business outcomes under SLAs. As demand grows in the coming year, look for service providers to build up their SLA management and monetization capabilities for Private Networks, with a focus on providing clarity into the ROI of new use cases, and peace of mind around their sustainable long-term value.
Relatedly, growth in Enterprise Private Networks will also fuel increased investment in Edge Computing. It’s already clear that many enterprises have stiff requirements for controlling security and data privacy onsite. At the same time, many of the most compelling Private Network use cases—especially those using latency-sensitive or AI-/ML-driven applications—will benefit from local application processing. To meet this growing demand, look for service providers to increasingly bundle Private Network connectivity with Edge Computing as part of a combined offering.
