Telecom Generator Market Size, Share and COVID-19 Impact Analysis, By Fuel Type (Diesel, Gas, and Others), Power Rating (Below 75 kVA, 75-375 kVA, 375-750 kVA, and Above 750 kVA), Application (Continuous, Peak Load, and Standby) and Regional Forecast, 2020-2032

The global telecom generator market size was USD 1.20 billion in 2019 and is projected to reach USD 2.41 billion by 2032, exhibiting a CAGR of 6.76% during the forecast period.

The telecom sector needs constant connection to a reliable power source to enable users such as hospital staff, police personnel, emergency responders, and many more to remain connected with steady communications. Generator sets are extensively used as a standby power source to provide economical, safe, and secure operations against power failures. The sector also critically requires continuous load alternatives to power high-load signal switch stations and remote cell tower locations. Several types of generators, such as diesel, gas, or renewable energy-type generators, are used in the telecom sector. The rise in the demand for uninterrupted & reliable power in the telecom infrastructure during power outages is anticipated to boost the market’s growth prospects.

Disruptions in Supply Chain amid COVID-19 Pandemic to Affect Solar Projects

Globally, the telecommunications sector is proving to be a core and essential infrastructure service to national economies, with data infrastructures becoming highly critical in an increasingly connected world. During the coronavirus-induced lockdowns, data usage across the world witnessed exponential growth due to the work from home initiatives, adoption of e-learning systems, and growing unemployment. Governments worldwide have deemed telecom as an essential service amid the ongoing pandemic due to which operations across the telecom sector are likely to remain unaffected.

However, the telecom generator market growth has suffered notable setbacks because of the pandemic. These have been mainly in the form of hindrances in the rollout of 5G services as well as the obstructions faced in the initiation of new telecom projects due to the unavailability of necessary capital, inaccessibility to raw materials, and shortage of operating staff. For instance, the German telecom company United Internet said that the construction of its subsidiary’s 1&1 Drillisch’s 5G network experienced delays due to the measures adopted in the country to prevent further spread of the COVID-19 pandemic in Germany.

China and India are also among the major countries manufacturing and deploying diesel generators due to the immense investment potential in the Asia Pacific region. Conversely, these countries have undergone various regional and national level shutdowns of residential, commercial, and industrial operations to contain the spread of this viral infection.

LATEST TRENDS

Rising Adoption of Renewable Energy to Boost Requirement for Backup Power Facilities

The demand for renewable energy has been gaining momentum in the power generation mix in the last few years due to an increase in the focus on reducing the impact of climate change and maintaining fossil fuel sustainability. In Southeast Asia, situations have been challenging, with about 25% share of the region's countries being off-grid. This has created a significant opportunity for energy solution providers to offer hybrid and renewable off-grid solutions. Grid stability is still a major challenge in markets such as West Africa, Central & East Africa, the Middle East, and Lebanon due to grid quality, which is evolving gradually.  

According to SolarPower Europe, the cumulative installed capacity of solar rose to more than 630 GW (Gigawatt), as the world installed 116.9 GW of new solar PV projects in 2019. Solar energy can be produced only during the daytime, while wind energy can be produced only when the wind is blowing with a certain force. Hence, backup power sources are needed for these resources. A generator is one of the most efficient sources of backup power. Generators can provide the necessary power backup when renewable energy fails or is unavailable. Thus, an increase in the adoption of renewable energy across the globe is expected to offer new opportunities to the generator market players in the near future.

DRIVING FACTORS

Expansion of Telecom Networks in Remote Areas to Drive the Growth of the Market

Telecommunication towers play an important role in emergency and everyday communications. Several employees, including emergency responders, police personnel, and hospital workers, rely on telecom towers for steady communication vital to carry out their work. The need for radio communication and mobile airwaves has increased significantly across the globe, owing to the advent of mobile telephony. This has enhanced the demand for a large-scale worldwide network of telecom towers, from cities to remote areas.

The number of mobile tower sites has increased significantly to boost coverage levels across the Asia Pacific and Middle East & Africa regions. According to GSMA analysis and estimates, for example, in Sub-Saharan Africa, the tower portfolio size is expected to surpass 325,000 by 2020. Remote areas have inadequate access to grid-connected electricity. Such regions are largely dependent on secondary sources of power, such as a generator set. Therefore, a lack of grid connection to telecom tower sites is anticipated to boost telecom generators' demand during the forecast period.

Rising Number of Power Outage Instances to Fuel Market Growth

The rate of electrification across the globe has improved over the last decade. However, the incidence of power outages has also increased. Natural calamities, failure of distribution and transmission lines, and faults in power generation stations or substations' equipment are the key factors causing power outages across the world. Breakdown in any equipment in the entire infrastructure can cause short or long power outages that can last from a few hours to several days, depending on the severity of equipment failure. For instance, on average, more than 60% of telecom tower sites face electrical grid outages over eight hours a day in India. Therefore, tower owners deploy a combination of batteries and backup power for electrical grids to ensure power availability of more than 99.95%. This is likely to create significant opportunities for generator manufacturers in the telecom industry.

RESTRAINING FACTORS

Stringent Environmental Regulations for Pollution and Noise Control to Hinder Market Growth

Diesel generators are widely utilized in the telecom industry, as they are reliable and safe. Numerous agencies such as the Telecommunications Regulatory Authority (TRA) in the UAE and the U.S. EPA (Environmental Protection Agency) have enforced strict regulations on mobile towers and diesel power generators. Another crucial factor hampering diesel generators' adoption is the transition towards greener alternatives provided by Energy Service Companies (ESCOs). Diesel generators produce higher decibels of noise as compared to that generated by other types of generators. Therefore, several government authorities have formulated certain laws and regulations regarding noise control. Thus, growing concerns about reducing noise and air pollution have diverted investments towards the adoption of renewable technologies, such as fuel cells, which is likely to restrain the uptake of diesel generators in the telecom industry during the forecast period.

SEGMENTATION

By Fuel Type Analysis

Diesel Fuel Type Segment Dominated the Global Market

Based on fuel type, the market for telecom generator is segmented into diesel, gas, and others. The diesel segment held a dominant share of the market in 2019. There are several reasons for this segment’s dominance. For example, diesel generators do not require spark plugs or wires, thereby reducing their overall maintenance costs. Moreover, their lifespan is also longer than that of other types of generators.

The natural gas segment is expected to be a highly lucrative segment in the market of telecom generator. Natural gas generators generate lesser noise and emissions as compared to other types of generators. However, natural gas is highly flammable, and the high operation and maintenance costs of these generators are likely to hinder the growth of the natural gas segment.

By Power Rating Analysis

Below 75 kVA Segment to Display the Highest Growth Rate

Based on power rating, the market for telecom generator is segmented into below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA. The below 75 kVA segment held a dominant share of the market in 2019. In the telecom sector, most of the generators installed are 10 kVA to 50 kVA due to the rise in the demand for uninterrupted & reliable power by telecom towers during power outages.

By Application Analysis

Standby Application Segment Led the Global Market Share

The market is segmented into continuous load, peak load, and standby load, based on application. The standby segment held a dominant share of the global market in 2019. Of late, most countries have been investing significantly in the development of renewable energy. An increase in the adoption of renewables is likely to result in interruptions in power supply as renewable energy is an intermittent energy source. Continuous generators are used as a primary power source, not just for standby or backup power. These generators can supply power in situations where no utility source is easily available.

REGIONAL INSIGHTS

Asia Pacific is anticipated to lead the telecom generator market share over the forecast period. The number of mobile internet users in Asia Pacific has increased significantly in the past decade. The number of mobile internet users stood around 1.9 billion in 2018. China, Japan, India, and Southeast Asia are the major markets for telecom generators in Asia Pacific. China is well on track to reach its goal of building 500,000 5G base stations by the end of 2020, with more than 480,000 5G base stations, or 96 percent of the annual target, already completed in September 2020. According to the Ministry of Industry and Information Technology (MIIT), there are about 100 million devices connected to 5G networks in mainland China. Chinese smartphone vendors such as Xiaomi, Huawei, and others are playing leading roles in the rollout and adoption of 5G in the country, with more affordable 5G-enabled devices being launched this year.

The Middle East & Africa and Latin America are anticipated to witness significant growth during the forecast period due to growing investments in 5G installations. For example, TIM’s Brazilian subsidiary recently launched a new 5G trial in a shopping center in São Paulo. The mobile network operator (MNO) has used a temporary 3.5GHz spectrum license awarded by the Agencia Nacional de Telecomunicaçoes (Anatel) and partnered with Ericsson for the trial.

Europe is expected to contribute significantly during the forecast period. At the end of 2019, 14 European telecommunications companies had launched 20 5G networks in 9 European countries, making Europe one of the world's most prominent regions for 5G deployment. By the end of 2020, it is expected that there will be over 80 networks in operation across the region, bringing next-generation wireless connectivity to millions of people. Germany’s three mobile network operators, Telekom, Telefónica, and Vodafone, have announced plans to cooperate on the rollout and operation of up to 6,000 new sites. The new sites will be focused mainly in rural areas and road, rail, and inland waterway transport routes.

KEY INDUSTRY PLAYERS

Key Participants to Concentrate on Product Innovation to Diversify Portfolios and Expand Sales Horizons

The global market for telecom generator is fragmented owing to a large number of players operating in the market. Aggreko, Caterpillar Inc., Cummins Inc., and Generac Holdings lead the market, accounting for a dominant share in 2019.

The major players in the market are employing several strategies to consolidate their position.  One of their preferred strategies is developing novel solutions that will help them diversify their product portfolios and expand their sales horizons. For instance, in April 2020, Kohler-SDMO introduced a new range of industrial generators with an operational range from 900 kVA to 1,500 kVA. The new additions are designed to deliver low fuel consumption, perform complex operations, and bridge the gap for the prevailing rated products delivered by competitors.

LIST OF KEY COMPANIES PROFILED:

• Aggreko (The U.K)


• Caterpillar Inc. (The U.S.)


• Cummins Inc. (The U.S.)


• HIMOINSA (Spain)


• John Deere (The U.S.)


• KOHLER-SDMO (France)


• Wärtsilä (Finland)


• Kirloskar Electric Co. Ltd. (India)


• Generac Power Systems (The U.S.)


• FG Wilson (The U.K)


• The Generator King (South Africa)


• AKSA Power Generation (Turkey)


• Ultimate Power Solutions (The UAE)


• Mohammed A. Al-Faddaghi & Partners (Saudi Arabia)


• Perkins Engines Company Limited (The U.K)


• Algen Power Generation (South Africa)

KEY INDUSTRY DEVELOPMENTS:

• In April 2020, Kohler-SDMO introduced a new range of industrial generators with an operational range from 900 kVA to 1,500 kVA. The new additions are designed to deliver low fuel consumption, perform complex operations, and bridge the gap for the prevailing rated products delivered by competitors.


• In February 2018, Generac announced the introduction of new XC and XD lines of portable diesel-fuelled generators designed for rental and commercial purposes. The novel XC product additions are fabricated with 6.5 kW and 8 kW power ratings for installations for outdoor users such as landscape contractors.


• In June 2018, Aggreko completed the acquisition of an Australia-based generator rental organization called Generator Hire Service (GHS) through its subsidiary. The company aims at joining forces with GHS channels, fortify its regional market position, and deliver niche product offerings to customers. 


• In May 2017, Aggreko inked a decade-long solar-diesel hybrid power agreement in Eritrea, Africa. The project involves mobile and modular power for mining operations and is planned to deliver 7.5 MW of solar along with 22 MW of diesel-generated power during its tenure.

REPORT COVERAGE

The telecom generator market research report includes a detailed generator industry analysis and focuses on key aspects such as leading companies and leading product applications. Besides this, the report offers insights into the current market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the advanced market's growth over recent years.

REPORT SCOPE & SEGMENTATION