By focusing on lower power consumption, reduced hardware complexity, and cost-effective scalability, 5G Reduced Capability (RedCap) is expected to be a key player in the telecom and IoT sectors.
The global IoT (Internet of Things) market is expected to reach USD 1.1 trillion by 2026, with 5G IoT solutions (including RedCap) contributing significantly to this growth.
Bridging the gap between low-cost IoT connectivity and the full potential of 5G networks, 5G RedCap connections are forecast to grow at a 66% compound annual growth rate (CAGR), hitting 963.5 million by 2030. Despite the current industry traction, Yatin Pahwa, Head of IoT Product and Portfolio Management at Vodafone, warns that it will be another three to five years before 5G RedCap technology reaches sufficient scale and hits the right price points to become mainstream.
Yet, by 2025, over 500 million RedCap-capable devices are already expected to be shipped, with sectors like smart homes, agriculture, healthcare, and wearables leading the charge. As per ABI Research, RedCap-enabled chipsets could cost 20-30% less than full 5G chipsets, providing cost savings that are crucial for the mass adoption of IoT devices.
GSMA Intelligence also projects that RedCap will reduce the energy consumption of IoT devices by up to 40% compared to traditional 5G solutions, making it ideal for long-lasting deployments in remote or industrial environments.
5G RedCap Deployment Challenges
Industry reports from Ericsson, Cisco, and GSMA Intelligence highlight that telecom operators and enterprises are investing in 5G RedCap to support the next wave of IoT expansion, making it a critical component of the global digital transformation journey.
Notably, RedCap devices operate on 5G standalone (5G SA) networks only. And although the pace has started to pick up, 5G SA rollout has been slower than expected—only about 67 networks have been deployed globally (as of the end of 2024), according to GSA’s update.
Moreover, the integration of RedCap with existing 5G infrastructure will be a gradual process, requiring telecom companies to upgrade their network capabilities. Aligned with Vodafone’s foresight, Ericsson’s 2024 report indicates that network integration might take three to five years before RedCap achieves its full potential.
While RedCap-enabled devices are intended to be more affordable, 5G network operators will need to invest in infrastructure upgrades to support RedCap networks. Industry experts estimate that these upgrades could cost operators up to USD 15 billion over the next three years, which may delay the broader rollout in some regions.
An Overview of 5G RedCap Investments
Telecom companies are increasingly deploying 5G RedCap technology, with a notable rise in trials and early-stage implementations as the industry prepares for its widespread adoption in the coming years.
In the Middle East, telecom operators have been at the forefront of testing RedCap technology since 2023. In October of this year, Saudi Arabia's stc, alongside Nokia and MediaTek, achieved a region-first milestone with the successful trial of 5G RedCap devices on a 5G SA network, utilizing the n1 FDD band. This trial represents a significant leap forward for Saudi Arabia and the GCC in integrating next-generation 5G capabilities. In the UK, BT Group, Nokia, and MediaTek also concluded their own 5G RedCap trial in October, 2023.
Meanwhile, in the UAE, Nokia and du celebrated the completion of the country’s first 5G-Advanced RedCap trial on a commercial network in December, 2023. That same month, Singtel, in partnership with Ericsson and MediaTek, successfully conducted Singapore's first RedCap trial on its live 5G network.
In Bahrain, stc launched the country’s inaugural RedCap use case trial in March, 2024, followed by O2 Telefónica in Germany, which began testing its own 5G RedCap technology the following month. In Oman, Omantel demonstrated its commitment to enhancing the country’s digital infrastructure by completing a laboratory trial of RedCap in September, 2024.
5G has already enabled a wide range of innovative use cases since its rollout in 2019, and in a major step for workplace safety, Optus partnered with Ericsson, Qualcomm Technologies, and Speedshield Technologies to integrate RedCap technology into AI-powered camera systems—a pioneering move in the safety and monitoring sector.
As these trials and implementations demonstrate, 5G RedCap is steadily progressing from concept to reality, offering both cost-effective and efficient connectivity for future digital infrastructure.
Bright Prospects for 5G RedCap
Designed to provide a balance between performance and efficiency, RedCap enables devices that don’t require the full capabilities of traditional 5G—such as industrial sensors, smart wearables, and connected healthcare devices—to operate on optimized, cost-effective 5G networks.
With the IoT market set to experience explosive growth, the role of 5G RedCap as a cost-effective, energy-efficient solution is poised to expand rapidly. By 2027, 5G RedCap devices are expected to capture over 30% of the 5G IoT market, and telecom providers will increasingly look to integrate RedCap into their offerings to cater to low-power, mass-market IoT applications.
With regulatory support, advancing chipset technology, and growing enterprise demand, 5G RedCap will likely become a foundational component of global digital infrastructure.
More Insights on 5G RedCap:
5G RedCap: Transforming the Future of IoT
RedCap: Pioneering a New Era in 5G Connectivity
Industrial IoT: Accelerating Industry 4.0 Transformations
