Telecoms stakeholders are vying for a big slice of the burgeoning private wireless market. Some have seen early success. Others are still positioning. None have staked out a mass market leadership strategy.
As ripe as this market may be, it’s also somewhat elusive. Serving complex verticals requires industry expertise. Partner ecosystems must be created to realize a comprehensive offering.
There’s obvious benefit in tapping mobile network capabilities for better coverage, mobility, and reliability. The value of 5G to the enterprise today, however, is not yet entirely obvious to enterprises themselves.
Nevertheless, the telecoms industry was. This included plenty of carriers and vendors touting their differentiating capabilities. There was also acknowledgement that .
Finding a path forward as stringent requirements evolve
From our discussions, enterprises perceive 5G as desirable, and even highly important, but they have yet to be convinced it’s mature enough for business-critical functions. Even mobile network operators aren’t sure they’re ready to handle many enterprise use cases.
For now, LTE remains the dominant cellular connectivity for private networks. Though the market is still in its infancy, we estimate there have been 3,000 mostly LTE private network implementations globally. A majority of enterprises still favor unique, isolated private networks. However, some large enterprises tell us they’re open to hybrid approaches as 5G matures. Those could include a private RAN plus shared core and network slices.
Enterprises consistently view security, data management and privacy as the most important requirements. Not just as general features, but seamlessly integrated into their own systems policies and rules.
In our assessment, LTE/5G private networks will grow to more than 20,000 by 2025. Large enterprises in industries such as energy and utilities, manufacturing, as well as transport and logistics, are looking seriously at 5G and driving early rollouts. Whether for productivity gains, competitive advantage, greater reliability and security, or lower cost of ownership, they’re anticipating business value in private 5G. Early use cases being discussed include remote monitoring and control, video surveillance, process automation and automated guided vehicles.
LTE/5G private networks will grow to more than 20,000 by 2025.
Getting private 5G right
Enterprises are faced with a flurry of considerations as they evaluate incorporation of 5G into private networks. Many prefer to wait for proven stability. Others (like the Chinese government) believe waiting is not an option since rapid adoption will unlock huge economic advantage. It’s all a question of risk management against target outcomes.
Factors being considered by enterprises include:
The business case can delay adoption. Where and when are the starting points? With what use cases? Wait for standards and devices to first be released? Who has the expertise? What’s the demonstrated ROI?
5G maturity risks can delay adoption. When will core and network slicing be proven and mature? Are enterprise use cases aligned with commercial availability of 5G standards? What are the security risks and how will 5G reliability be guaranteed? When will devices become available? How is risk balanced with competitive leadership?
Complexity impacts TTM and costs as risk increases. How are existing systems integrated? Are systems integrators knowledgeable about the enterprise’s vertical? How is 5G’s complexity dealt with? How is the radio network in an industrial environment managed and continually optimized? How will 5G converge with Wi-Fi? How will spectrum be accessed seamlessly?
Market competency impacts costs, increases risk, and delays growth. Where are the 5G practitioners? Are vendors and local SIs experienced in the vertical? Where are the 5G enterprise app-stores for agriculture? For mining? Which ecosystem partners will remain in a few years?
There are also plenty of planning and technology questions to be answered. Such as whether an enterprise deploys 5G alone or with help from a technology company. Will the spectrum be licensed from an operator or not? Indoor or outdoor RAN? Small cells or mmWave? A network slice for each division or each building? A private MEC for privacy or to avoid backhaul? Dedicated SIMs? Complementary technologies may also be required, such as SD-WAN access to the private network for remote workers, SASE security or non-terrestrial network capabilities.
Proving 5G private network readiness
Operators see opportunity in providing bespoke 5G private networks to large enterprises for mission-critical applications. There is also a long-term interest in the broader small and medium business (SMB) market.
Addressing the SMB market profitably will be a challenge for operators. SMB customers need solutions that are easy to consume, purchase and deploy. And offered at a cost-efficient price point. For that, operators need a scalable, reproducible solution.
To serve all enterprises, operators must demonstrate that:
5G is a trustworthy path. A 5G network slice and MEC can be as secure, reliable and performant as a more costly and challenging isolated network build.
Automation will offset complexity and operational costs. Enterprises want automation to hide operational complexity so they can focus on their business. Automation is also critical for the operator to scale to support tens of thousands of SMBs.
Open interfaces and systems will speed integration. Enterprises want to reduce the cost and complexity of system integration. Open systems also build vendor diversity and avoid the lock-in of proprietary systems.
Ecosystems will provide competency and innovation. Operators need to embrace or develop ecosystems to stimulate vertical industry applications and innovation.
In our next post we’ll explore the role test and assurance plays in enterprise private networks and how system integrators and operators can use new tools to overcome challenges discussed here.
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