0000-00 Frost Radar: 5G Network Infrastructure Market, 2020 K584-65 January 2021 Authored By Troy Morely A Benchmarking System to Spark Companies to Action - Innovation That Fuels New Deal Flow and Growth Pipelines Global Information this means investment in 4G is still considerable. However, investment in 4G networks will flatten and then begin to decline and investment in 5G networks will accelerate and eventually become dominant. The overall network infrastructure market that includes 2G, 3G, 4G, and 5G continues to grow, albeit at a slow, single-digit rate. Growth is more significant in 5G network infrastructure. Frost therefore, it is unsurprising that leaders from 4G place highly in the 5G market. The architecture of 5G brings the possibility of many suppliers working together in each of the areas of network infrastructure: RAN, core/edge networks, and transport networks. In other words, the core network is likely not from a single supplier, but from many suppliers each providing one or more network functions. This opens the market to new suppliers. Increased competitive intensity raises the level of innovation. The Frost Radar measures growth rates in addition to absolute revenue and combines them with several other factors (described herein) to measure companies performance along the Growth axis. The Frost Radar measures innovation for each company by assessing its product portfolio, examining how scalable its innovations are, looking at the efficacy of its R this is essential in a market where technology is always evolving. Ericssons product portfolio includes all areas of 5G network infrastructure as well as previous generations of network infrastructure. The company will soon offer open and virtual RAN solutions in addition to its traditional RAN solutions. The CSP market is Ericssons primary focus; the companys strategy continues to center on evolving CSP needs in all areas of the world. Ericsson As a leader in the 4G infrastructure market, Ericsson enters the 5G market with a large customer base. The company has done an excellent job keeping its current customers and adding new customers: it reports 118 commercial 5G agreements and 68 publicly announced 5G contracts. Ericsson maintains a significant pipeline of customers that have yet to move to 5G but will over the coming years. Ericsson has spent the last few years adjusting its overall strategy to focus on profitability. The company recently indicated that the turnaround has been successful, and the company has significantly improved profitability and its financial position. Participating in the open and virtual RAN movement is essential. Frost CEOs require guidance. The Growth Environment requires complex navigational skills. The customer value chain is changing. STRATEGIC IMPERATIVE The Board of Directors has a unique measurement system to ensure oversight of the companys long-term success. The Board of Directors has a discussion platform that centers on the driving issues, benchmarks, and best practices that will protect shareholder investment. The Board of Directors can ensure skillful mentoring, support, and governance of the CEO to maximize future growth potential. LEVERAGING THE FROST RADAR Growth Pipeline Audit Growth Pipeline as a Service NEXT STEPS Source: Frost a robust growth pipelineTM system; and effective market, competitor, and end-user focused sales and marketing strategies. GROWTH INDEX ELEMENTS GI1: MARKET SHARE (PREVIOUS 3 YEARS) This is a comparison of a companys market share relative to its competitors in a given market space for the previous 3 years. GI2: REVENUE GROWTH (PREVIOUS 3 YEARS) This is a look at a companys revenue growth rate for the previous 3 years in the market/industry/category that forms the context for the given Frost Radar. GI3: GROWTH PIPELINETM This is an evaluation of the strength and leverage of a companys growth pipelineTM system to continuously capture, analyze, and prioritize its universe of growth opportunities. GI4: VISION AND STRATEGY This is an assessment of how well a companys growth strategy is aligned with its vision. Are the investments that a company is making in new products and markets consistent with the stated vision? GI5: SALES AND MARKETING This is a measure of the effectiveness of a companys sales and marketing efforts in helping it drive demand and achieve its growth objectives. K584-65 20 Frost Radar: Benchmarking Future Growth Potential 2 Major Indices, 10 Analytical Ingredients, 1 Platform HORIZONTAL AXIS Innovation Index (II) is a measure of a companys ability to develop products/services/solutions (with a clear understanding of disruptive Mega Trends) that are globally applicable, are able to evolve and expand to serve multiple markets, and are aligned to customers changing needs. INNOVATION INDEX ELEMENTS II1: INNOVATION SCALABILITY This determines whether an organizations innovations are globally scalable and applicable in both developing and mature markets, and also in adjacent and non-adjacent industry verticals. II2: RESEARCH AND DEVELOPMENT This is a measure of the efficacy of a companys R&D strategy, as determined by the size of its R&D investment and how it feeds the innovation pipeline. II3: PRODUCT PORTFOLIO This is a measure of a companys product portfolio, focusing on the relative contribution of new products to its annual revenue. II4: MEGA TRENDS LEVERAGE This is an assessment of a companys proactive leverage of evolving, long- term opportunities and new business models, as the foundation of its innovation pipeline. An explanation of Mega Trends can be found here. II5: CUSTOMER ALIGNMENT This evaluates the applicability of a companys products/services/solutions to current and potential customers, as well as how its innovation strategy is influenced by evolving customer needs. K584-65 21 Legal Disclaimer Frost & Sullivan is not responsible for any incorrect information supplied by companies or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers. 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