Australia has officially launched its sub-1 GHz 5G spectrum auction. Interested companies have three weeks to submit their bids for the auction. Owing to their capacity to transmit messages over great distances, the low-band sub-1 GHz frequencies are extremely significant in a nation like Australia. With the Australian government currently striving to achieve its ‘Year of 5G’ vision for this year, the country’s regulator needed to start moving ahead with the second auction of the year. The increase in momentum in the 5G space is evident with the demand for the global 5G services market, which is expected to grow rapidly in the next few years according to the latest forecasts from The Business Research Company. The spectrum available in this auction is expected to play a significant role in launching a wide range of services to help both businesses and consumers, simultaneously. There is 70MHz of paired spectrum in the 850/900 MHz band available for offload through an auction, which is expected to be conducted towards the end of this year. Australia generated around $475.6 million (AUD647.6 million) from its first auction of mmWave spectrum in the 26GHz band in April this year.

Speaking about the demand for the global 5G services market, it was worth $69.39 billion in 2020 and is expected to grow to $83.24 billion in 2021, at a compound annual growth rate (CAGR) of 20%. The global 5G services market will continue to grow rapidly for the next five years and reach $188 billion by the end of 2025, at a CAGR of 23%. The rising digital economy is expected to be a major driver for the 5G market. There is an increase in broadband and internet penetration, consumption of premium content digitally, exponential growth in data absorption, government’s focus on digitalization in developing and developed nations, and an increasing trend of technology adoption across industries. The evolution in the digital economy will require significant performance in terms of speed and will pave way for the increase in the demand for 5G services. As a result, companies in the telecom industry are expanding their capabilities in the 5G space.

The introduction of AI-powered services is a major trend shaping the growth of the 5G services market. The commercial usage of 5G services is expanding rapidly. The growth in the number of connections and cloud-based AR or VR is generating higher demand for 5G services with greater bandwidth, wide-coverage, and low latency networks. Huawei started applying AI to technical work and business processes to serve its customers and as of 2019, Huawei provided more than 5,80,000 cases of technical support on more than 1,700 networks across the globe. Therefore, the introduction of AI in 5G services to increase accuracy and agility is expected to act as a major trend for the 5G services market.

Delay in standardization of spectrum allocation is challenging the growth of the 5G services market. The timely deployment of 5G is essential for achieving the objectives of service providers, especially in emerging markets. However, there is a delay in spectrum auction and standardization across many countries. A key reason for the delay is the financial health of the service providers, who have been struggling to pay licensing fees and other penalties. The other key reason is that the unit pricing of the spectrum is high – few countries such as India are taking time to raise as much money for the spectrum auction. Moreover, long-term and high investment in 5G is bound to further impact operators’ finances. Therefore, there is a delay in the standardization of spectrum allocation. The delay in the use of spectrum for mobile broadband networks also comes at a significant cost.

About The Author 

Moïn has over a decade of experience in market research, analysis, and consulting. He has worked with some prominent market intelligence firms in India including Progressive Digital Media, Ovum, and GlobalData. At TBRC, he is involved in reporting insights on technology and media sectors, along with market data and trend analysis, and understanding competition dynamics. His project experience includes a market strategy study for an AI-based marketing software for telecom companies. He has worked for several clients including Amazon, Sony, Flytxt, Fujitsu, and several tech companies. He has a bachelor’s degree in Biotechnology and a postgraduate degree in management from IMI Belgium.

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