Over the years, the global telecom industry has transitioned from voice-driven technologies such as 2G to data-oriented technologies like 3G and superior high speed 4G and long term evolution (LTE). Currently, it stands on the brink of deployment of 5G, which is expected to support a myriad novel and unprecedented use cases and applications. Interestingly, while the global telecom in­d­­ustry has come a long way, it has traced a particularly steep growth curve in the past couple of years.

Underpinning the success of telecom globally is the test and measurement (T&M) industry. Reliable T&M has al­ways been crucial for companies to deploy new and more efficient technologies, red­uce cost and improve the quality of service. The T&M industry has evolved significantly as a function of the growth in the telecom sector, which has witnessed widespread adoption of new technologies such as 4G and LTE. There has been an un­precedented gr­o­­wth in the number of connected devices in use, along with a sim­u­ltaneous increase in data consumption. Ther­efore, investment in T&M is a crucial component of the stra­te­gies of all players in the telecom and technology ecosystem. tele.net takes a look at the global trends, growth drivers and challenges in the T&M space…

Growth drivers

The biggest growth driver of the T&M market is the advancement of networks over time. Currently, 4G and LTE techno­l­ogies are witnessing a deep penetration across the globe. According to the data from the Global Mobile Suppliers Asso­cia­tion, there were 651 LTE/LTE-Adva­n­ced (LTA-A) networks as of January 2018 and about 2.54 billion LTE subscriptions as of December 2017. By 2025, 4G is expected to account for 53 per cent of the global mobile connections. This has resul­ted in an exponential rise in the consumption of data, necessitating the need for T&M to ensure the reliability of networks. The growth in the number of smartphones and devices su­p­p­orting these technologies is contributing significantly to the expansion of the market.

A number of global operators are now gearing up for the launch of 5G networks. As a result, the demand for extensive T&M equipment and services is set to experience a significant push. The uptake and penetration of technologies such as internet of things (IoT) is also expected to add to the development of this market. According to Eri­csson, there will be 1 billion 5G subscriptions for enhanced mobile broadband by end-2023, which will account for 12 per cent of all mobile subscriptions and 20 per cent of all mobile traffic. Further, the number of cellular IoT connections is expected to reach 3.5 billion in 2023, growing at a compound annual growth rate (CAGR) of 30 per cent between 2017 and 2023. As of June 2018, more than 60 cellular IoT networks have been commercially launched using Cat-M1 and NB-IoT technology.

These technologies are expected to ring in significant changes in the requirements for T&M equipment and lead to new op­por­tunities for vendors. Reliable T&M of 5G and IoT networks, the deployment of which will enable several new applications and use cases ranging from automation of homes and manufacturing processes to driverless cars, is of paramount importance. Further, increased spending on research and development, and increased penetration of modular instrumentation are contributing to the growth of the global T&M industry. Modular instruments are suited for automated test systems and are able to maximise the usage of space.

Regional growth

While the global telecom industry has grown significantly, select regions have witnessed a greater growth recently, as compared to other regions, owing to the rapid uptake of new technologies and a larger user base. These regions are ex­pected to drive the growth of the T&M market as we go forward. According to Mar­ket­­s­and­Markets™ research, the global T&M equi­p­­­­ment market is expected to grow at a CAGR of 3.55 per cent between 2017 and 2023 from $23.51 billion to $28.98 billion.

This growth can largely be attributed to the Asia-Pacific (APAC) region, which has large and fast growing economies that are experiencing a rapid uptake of new technologies and growth in the telecommunications market. For instance, growing countries such as India and China, which ac­co­unt for more than one-third of the world’s population, are huge markets for T&M equipment. The APAC region has a plethora of original equipment manufacturers and semiconductor device and product manufacturers. Further, these mar­­kets are witnessing an exponential incr­­ease in the number of smartphone users, the quantum of data consumed and the frequent upgrading of telecommunication standards. These factors can be attributed to the growing demand for T&M equipment. Also, the si­g­­­­nificant dip in the price of sensors is inc­r­e­asing the demand for IoT and automated electronic products, in turn, assisting in the growth of the T&M equipment market.

Besides, North America can also be expected to contribute significantly to the growth of the T&M market, owing to the early deployment of 5G networks. Sev­eral telecom operators, especially in the US, are investing significantly in the deployment of 5G networks and are the front runners for 5G. Operators in the US have announced that they will begin providing 5G services as early as mid-2019. Other markets such as South Korea, Japan and China are expected to deploy major networks in 2020.

Market consolidation

The T&M industry continues to be shaped by consolidation. Over the past couple of years, a number of telecom T&M companies have resorted to mergers and acquisitions. Larger, well-established players have acquired smaller companies with new technology strengths and niche market leaderships. Growing hand in hand is the acquisition of market participants by the financially strong companies as they aim to grow in­organically to assume a leadership position.

For instance, Keysight Technologies has acquired Anite, Ixia and Thales Cali­bration Services over a span of three yea­rs. Recently, in February 2018, Viavi Solu­tions signed a definitive agreement to ac­quire the T&M business of Cobham Wire­less. This acquisition has been approved by the board of directors of the two companies and is expected to close during the second half of 2018. Earlier, Broadcom had acquired Brocade in Nov­e­mber 2017. Also, Anritsu acquired Azimu­th Systems, a provider of automated, real-world radio frequency (RF) performance test solutions in September 2016.


Over the last two years, there have been more than 10 major mergers and acquisitions in the semiconductor industry, worth upwards of $100 billion in total. Such consolidation is a matter of concern as it has narrowed the potential customer base of T&M players and is pushing them to focus on the test excellence.

There is an industry wide call for the reduction in the cost of testing since not all companies have massive budgets to spend. Also, the disposable nature of the wireless devices being developed is putting a pressure on vendors to lower costs. With the evolution and uptake of IoT, the cost of chips, modules and sensors is de­clining. Therefore, testing costs too have to be reduced in order to align with the current high-volume but low-cost market. In light of this low-cost challenge, industry players are becoming more creative in attempting cost reduction and have adopted reusable tests across different hardware, among other methods.

Technologies such as 5G and IoT require flexible test solutions. In the case of IoT, there is a need to test and verify both short- and long-range technologies including Bluetooth and short-range Wi-Fi in unlicensed bands, LTE which is longer in range, narrowband IoT (NB-IoT), etc. Th­e­refore, given the variety of technologies needed to be verified, flexible, efficient and low-cost solutions need to be developed.


Going forward, the launch of 5G and the uptake of emerging technologies such as IoT, artificial intelligence, virtual reality, and machine-to-machine among others will lead to the development of a new breed of devices and networks, which will re­quire extensive T&M. The uptake of these technologies will drive the growth of the industry in the years to come. Moreover, there will be a focus on precision and minimisation of error, given the uptake of sensitive and critical use cases such as industrial IoT, and automated city resource and traffic management.

Keeping the challenges in mind, T&M vendors will need to upgrade their offerings and provide more value to their customers, given that the market is moving towards a low-cost, high-volume structure. Modular instrumentation and a software-defined strategy will be needed. Further, companies will have to provide data gathering and big data analysis services in order to increase the value quotient of their services. With the industry stabilising from the market consolidation, larger and financially stro­n­ger players are expected to increase the over­­all intensity of competition. All in all, the T&M market is expected to grow on the back of new technologies, while also witnessing a reduction in prices, owing to higher competition and requirements of their customers.