Competition in Mobile Base Station Market to Intensify as Global 5G Development Enters Upswing, Says TrendForce

5G communications have seen various uses in telemedicine and industrial IoT during the spread of COVID-19 in 2020, according to TrendForce’s latest investigations. Primary applications of 5G during this period include contactless disinfection robots, remote work, and distance learning. Currently, China has been most aggressive in developing 5G networks, with more than 400 5G-related innovative applications in transportation, logistics, manufacturing, and healthcare in 1H20. At the same time, the emergence of 5G services has created a corresponding surge in base station demand.

TrendForce research vice president Kelly Hsieh indicates that, from a technical perspective, the growth in mobile data consumption, low-latency applications (such as self-driving cars, remote surgeries, and smart manufacturing), and large-scale M2M (smart cities) requires an increase in 5G base stations for support. Constructing these base stations will likely bring various benefits, such as investment stability, value chain development, and interdisciplinary partnerships between the telecommunication industry and other industries.

Total 5G base stations in China are projected to exceed 600,000 in 2020, while Japanese and Korean equipment manufacturers aggressively expand in the overseas markets

Chinese and European equipment manufacturers captured more than 85% market share in the global mobile base station industry in 2019, with Sweden-based Ericsson, China-based Huawei, and Finland-based Nokia as the three largest suppliers. However, owing to the U.S.-China trade war and the export controls issued by the U.S. government, Huawei subsequently was unable to procure key components from U.S.-based RF-front end manufacturers, in turn affecting the sales performance of its base stations in the overseas markets. As such, Huawei is expected to focus its base station construction this year primarily in domestic China.

By the end of 1H20, the three major Chinese mobile network operators, including China Mobile, China Unicom, and China Telecom, had built more than 250,000 5G base stations in China. This number is projected to reach 600,000 by the end of this year, with network coverage in prefecture-level cities in China. In addition, emerging infrastructures such as 5G networks and all-optical networks will generate commercial opportunities for Huawei. According to the GSM Association’s forecasts, by 2025, more than a quarter of cellular devices in China will operate on 5G networks, occupying one-third of all global 5G connections.

On the other hand, thanks to successful 5G commercialization efforts in Korea, Samsung has seen a surge in its base station equipment. The company has provided base stations for the three major mobile network operators in Korea, including SKT, KT, and LG Uplus, in addition to collaborating with U.S. operators, such as AT&T, Sprint, and Verizon. As well, since the British government is now targeting Japan-based NEC and Fujitsu as replacement suppliers of 5G equipment, and European and American governments alike have implemented sanctions against Huawei, Japanese equipment suppliers now have the perfect opportunity to raise their market shares in Europe and the U.S.