Industrial 5G matures 1.7 billion in three years

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The most relevant assumption of the latest edition of the 5G & Beyond Observatory of the School of Management of the Polytechnic of Milan, presented today, is the following: 2023 was an important year for the industrial market of fifth generation mobile networks, on on a global scale but also in Italy. It was from a technological point of view, with the definition of the three main standards (Releases 15, 16 and 17, the latter linked to the so-called “Massive IoT”) and the start of the development of the two “improvement” versions ( Release 18 “5G Advanced” and 19 “5G Advanced+”) scheduled for the end of 2025. And it was, even more so, from a business point of view. All the first-rate TLC operators have in fact defined commercial offers of 5G MPN networks (Mobile Private Networks) for large companies and at the same time several others have been created thanks to private funds, and therefore no longer financed by public funds as happened until today. What does this mean? That the most innovative companies have understood that this technology is not only synonymous with greater data transfer speed, but rather a platform through which to digitize and automate specific operational processes.

The acceleration in the development of industrial 5G networks, the Observatory managers point out, therefore has a direct effect on the size of a market which has so far remained in an “embryonic” state and waiting for the right conditions to make demand take off. The turnover on a European scale could exceed 1.7 billion within the next three years (value-added services, such as real-time data analysis, excluded), with Italy accounting for around 10% of this value, placing it in fourth place overall. The most optimistic scenario also sees the sector reaching over two billion euros at the end of 2026 but only if more favorable circumstances occur, such as the spread of autonomous mobility projects or the success of vertical applications such as the real-time localization of goods or vehicles production at remote industrial sites. Otherwise the market value may not exceed the one billion mark.

However, the potential for important development is there and this is also demonstrated by the 117 private 5G network projects active in Europe (including the United Kingdom), with Germany and Finland acting as leading countries and Italy doing its part with seven new initiatives. Overall, the majority of these projects are reflected in the manufacturing world (which accounts for 44% of cases), thanks above all to the automotive and mining sectors, and in the logistics sector (30%), with ports acting as locomotive. What is the use of fifth generation mobile technology in these contexts? At the top of the list of needs are reliable coverage, performance and the ability to simplify the management of industrial networks. In general, we read in the note accompanying the Observatory, fifth generation technology is dominant for all those applications that work in large open spaces (such as production sites) where there is no wired connectivity and where other wireless systems are of little use. suitable.

«The road ahead for the full development of the 5G market has been traced – highlighted Antonio Capone, scientific director of the Observatory – but it is long and presents some obstacles to overcome, starting with the economic-financial difficulties of the telco operators which directly affect on the speed of development and rollout of the new public networks, a speed currently lower than expectations”. A change of pace will also be needed in terms of planning, currently strongly focused on network infrastructure and less on innovative applications, and nevertheless a more proactive approach in the 5G key of the ICT supply chain, called to structure an offer of services suited to our context productive. And then the public entity, which according to Capone will be able to play «a key role in terms of driving or slowing the market, depending on the choices made on various fronts: from policies on the frequency spectrum to electromagnetic limits, from incentives to demand to the possibility of diversification of connectivity services”. Without forgetting, finally, the role that hyperscalers such as Google Cloud, Amazon Web Services or Microsoft could play.