Private networks are widely considered to be a highly-promising segment for 5G services. However, this market is not as straightforward as it appears. It is highly competitive and deep insights into industry verticals are required. Enterprise requirements are varied and project customisations are unavoidable. For now, large multinationals have taken the early lead in adoption.
The pace with which 5G will penetrate the private network market is hard to determine. Solution providers have to expedite the move from proof-of-concept to proof-of-value and beyond. This requires many supporting market factors to fall into place. This can be a challenge as each industry vertical has its own ecosystem and dynamics. Solution providers should eschew promoting 5G for the sake of technology alone while ignoring actual enterprise requirements and constraints. Technology match is important.
Private Networks – A Snapshot
Technology choices: LTE, 5G, Wi-Fi 6. There is no one-size-fits-all solution. Different technologies (even hybrid) will be deployed depending on the use case.
Options: in-house, managed service, network-as-a-service (NaaS). Not all enterprises will have the capabilities or resources to operate and maintain their own private networks; some might not even want the hassle. As such, different deployments options will exist.
Part of on-going enterprise digital transformation, growing availability of spectrum for enterprises in a number of countries (spectrum democratization).
Industrial/manufacturing, transport and logistics, mining, and utilities.
Automated guided vehicles, video monitoring, control of precision machines and robotics, visual quality inspection, AR/VR applications, and drone operations.
Mobile operators, network equipment providers (e.g., traditional RAN vendors and Cisco), hyperscalers (e.g., AWS and Microsoft), and systems integrators (SIs) are pursuing market opportunities.
Key success factors
Deep industry knowledge, ability to demonstrate tangible business outcomes, sales force competencies (and channel strategy), and industry-targeted partner ecosystems.
The market is still developing and no one has yet to establish market dominance. For the foreseeable future, the market will remain dynamic and structural changes can be expected. It will be interesting to see if mobile operators can cement a leadership position. Historically, many enterprises do not perceive them as preferred partners for digital transformation. Will this time be any different? This is not a trivial question as a number of network equipment providers are leveraging mobile operators as channel partners. Additional areas for speculation include:
- Will open RAN vendors pursue private network opportunities in earnest?
- Will new alliances be forged among hyperscalers, open RAN vendors, and SIs?
- Will network slicing play a prominent role (and who will the indoor-coverage challenge be addressed)?