The communications industry will undergo major changes over the next several years as society as a whole accelerates its adoption of digital services according to a study put out by investment firm CoBank authored by their Lead Economist in Communications, Jeff Johnston. One of the major factors supporting this trend, according to the report, is an unprecedented amount of public and private capital finding its way into the market.
“Major infrastructure funds and private equity sponsors have an insatiable appetite for communications assets, and lawmakers in Washington know they must do more, Johnston said in his report. “5G and private wireless networks will transform the way we work and live and they will also enable small rural towns and co-ops to build their own carrier-grade, high-speed wireless networks.”
Johnston referred to fiber as “the new black.” He expects to see major investments in this area from a wide range of players including large telcos, which, he said, are shifting their business away from the media industry and back to connectivity.
The CoBank study showed the North American private wireless market is expected to grow at a 10.1 percent CAGR over the next seven years and become a $2 billion market. From an application standpoint, Johnston said 5G networks will enable new low-latency applications such as augmented reality and virtual reality (AR/VR) that will require speeds of up to 5,000Mbps.
“This will lead to growth in edge computing and a surge in network traffic. For example, Facebook has pledged to spend over $10 billion per year for the next several years to develop the technology and build the market,” he said.
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