5G Services Market to Hit $664.8 Billion by 2028

North America to Dominate 5G Services Market

5G technology, that is, fifth-generation mobile network technology, is designed to connect virtually everyone and everything, including objects. It comes on the heels of 4G, which was launched in the 2010s and ushered in the era of mobile broadband.

Because of 5G’s faster speeds and lower latency, its adoption is about to go supernova. This will be a game changer, not just for 5G providers, but also for the 5G services market.

Most notably, it will finally make the long-touted technological promises like the Internet of Things (IoT) a reality.

The idea of the IoT is that any device will be able to connect to the Internet or each other. For that to become a reality, those devices need to be able to communicate with each other at virtually the speed of light. 5G enables that.

5G can handle 1,000 times the volume of mobile data compared to 4G. In practical terms, the response time on 3G networks is roughly 120 milliseconds, and on 4G networks it’s between 15 and 60 milliseconds. With 5G, the response time is just one millisecond.

Those differences are pretty imperceptible if you’re just loading a web site or downloading a game, but if you work in health care, manufacturing, transportation, or aerospace, it’s light-years apart.

What does it look like?

If you’re driving 60 miles per hour, you cover about 90 feet per second. The average reaction time for humans to hit the brakes is about 1.5 seconds, which, in this example, would mean covering 268 feet, the length of 18 cars. An autonomous vehicle traveling at 60 miles per hour can hit the brakes in under half an inch.

The convenience and safety of 5G have been helping drive the increase in IoT-enabled and connected devices. In 2018, there were an estimated 22 billion IoT-connected devices in use around the world. By 2030, that number is expected to soar by 127% to about 50 billion. (Source: “Number of Internet of Things (IoT) Connected Devices Worldwide in 2018, 2025 and 2030,” Statista Inc., last accessed April 22, 2021.)

The global 5G services market was projected to hit $41.5 billion in 2020 and $46.6 billion in 2021. A 12% increase year-over-year is decent, but it’s nothing to get overly excited about. That’s probably only because COVID-19 put a dent in demand. It won’t stay that way for long, though. (Source: “5G Services Market Size, Share & Trends Analysis Report By Communication Type,” Grand View Research, Inc., last accessed April 22, 2021.)

From 2021 to 2028, the global 5G services market is forecast to expand at a compound annual growth rate (CAGR) of 46.2% to $664.8 billion.

North America is expected to dominate the 5G services market, with huge infrastructure investments coming from key service providers including AT&T Inc. (NYSE:T), T-Mobile US Inc (NASDAQ:TMUS), and Verizon Communications Inc. (NYSE:VZ) in the U.S. and Rogers Communications Inc. (NYSE:RCI), Bell Mobility, and Telus Corporation (NYSE:TU) in Canada.

Up to this point, the fastest-growing 5G services categories have been information technology (IT) and telecommunications. But the growing demand for high-speed data transfer and low latency will impact every sector and industry, including manufacturing, energy, utilities, financial services, media, entertainment, logistics, aerospace, defense, health care, retail, mining, energy, agriculture, construction, and real estate.

Health care certainly benefited from 5G in 2020, with remote care being provided via more reliable connections that facilitated the transfer of patient data and allowed health-care providers to make fast decisions. We’re not entirely there yet, but 5G will play a role in supporting augmented reality and virtual reality tools for remote operations.

Analyst Take

We’ve been hearing about how 5G will revolutionize the way we live. It appears as though we’re finally on that cusp, with the 5G services market set to expand greatly from 2021 to 2028.

No investor is going to want to miss out on that kind of massive, consistent growth. The best 5G stocks to invest in will evolve and grow over time. For now, though, some of the best areas to consider are industrial IoT, remote health care, robotics, autonomous driving, and infrastructure.