As we head into 2021, there is a growing chorus of industry voices drawing attention to private networks having a big year.
2021 will see private LTE deployments, a liberal sprinkling of 5G POCs, and new ecosystem deals
Increasing momentum and even hype around private networks have, to a degree, obfuscated the fact that most of these deployments are all on 4G LTE. Indeed, in December 2020, the GSM Suppliers Association (GSA) cited 37 different countries/territories around the world with private mobile network deployments, the vast majority based on LTE. LTE can support most use cases that are being contemplated currently, but support for LTE in chipsets and network equipment, not to mention spectrum availability, are all superior to 5G options today. As such, momentum for private networks in 2021 should be mainly about LTE with a liberal sprinkling of 5G trials and proof of concepts (POCs) across the world.
2021 will also see significant momentum on the ecosystem side, with increasing complexity becoming apparent across markets and segments. Depending on the specific market and spectrum licensing framework, enterprises and other end users can opt for a telco-led deployment model, “do-it-yourself”, or work with systems integrators and/or neutral hosts. While all these deployment models have been in evidence in 2020, the practical implication has been that the ecosystem is looking increasingly diverse and ‘complex’. One trend to highlight is the increasing number of non-exclusive edge computing and 5G infrastructure partnerships. A recent example is Samsung Networks partnering with IBM to offer end to end private network solutions.
Innovation in spectrum licensing will pick up pace around the world
As regulators contemplate the necessary environment for enabling enterprise digital transformation, they are increasingly focused on ways to bring new players beyond telcos into the process. There are three fundamental innovations that have been in evidence in 2020.
The first is the dedicated licensing model pioneered by Germany, wherein the regulator BNetzA made the 3.7-3.8 GHz band available exclusively for industry, with a total of 74 applicants being granted licenses to date.
The second was the UK model for a “localized access” licensing approach, with a sharing framework across the 3.8-4.2 GHz, 1800 MHz, and 2300 MHz bands that includes an option for enterprises to approach telcos for a leasing model, as well as the 24.25-26.5 GHz bands for indoor deployments.
The third approach is the hybrid, “shared access” model that has been pioneered in the United States with the successful launch of the Citizens Broadband Radio Service (CBRS) in the 3.5-3.7 GHz bands.
Going into 2021, regulators around the world will look at these models as inspiration for innovative spectrum licensing. In the Asia-Pacific region, Japan has already moved on similar lines to the German model, while other countries are all evaluating options for private wireless networks, in licensed, hybrid and unlicensed approaches.
Covid19’s lasting impact will throw up new segments for private networks beyond traditional enterprise LAN/WAN
The Covid19 pandemic in 2020 has affected everyone across nationality and socioeconomic strata, to varying degrees. With workers forced to work from home and school closures forcing children to switch to online schools, the demand for broadband has exploded. Moreover, digital divide issues have come to the fore, with underserved communities suffering disproportionately. These affected segments are now driving demand for private networks, with school districts, municipalities, and several new segments that do not fit the original addressable market that was associated with private network demand. For example, school districts in Utah and California have already deployed private LTE networks over the CBRS band in the US in late 2020. Similarly, government agencies are also looking at private networks, as are industry verticals like utilities.
Telcos will double down on managed service offerings to stay relevant
Telcos have long had dedicated business units focused on catering to enterprise needs though these have tended to focus on enterprise mobility and WAN solutions. Despite the promise of private networks, many telcos have struggled to keep pace with the technology transitions that have pushed many enterprises around the world to embrace digital transformation. Ideally, enterprises would have approached telcos to “build” their private networks on licensed spectrum assets with a network “slice” optimized to the unique demands and use cases of that enterprise. However, the reality is that network slicing is not quite ready for prime time, and local breakout options are limited in functionality. Telcos are increasingly working on managed service offerings to enterprises, where they offer a combination of licensed spectrum, along with network equipment and potentially edge cloud infrastructure as a “managed service”. Managed service offerings will help telcos stay relevant and get a strong foothold until network slicing becomes a commercial reality.
Private cellular for OT, Wi-Fi for IT
Enterprises have an important decision to make – do they rip and replace legacy infrastructure or find the ideal balance of 5G and Wi-Fi 6 alongside their legacy Wi-Fi equipment? 5G and Wi-Fi 6/6E are uniquely suited for deployment in industrial and wider enterprise use cases. Both technologies are increasingly complementary and have several attributes that are particularly relevant for use cases that have demanding performance requirements, including the need for lower latency, high reliability, throughput, the ability to support high densities of connected endpoints, and so on. Enterprises can adopt a multi-access wireless connectivity strategy that will allow them to match the correct technology (5G vs Wi-Fi 6/6E) for the right use case. As enterprises evaluate options, they need to account for ecosystem support for cellular vs Wi-Fi, as well as the total cost of ownership for the technology mix that is chosen. One option that we expect to take shape is a dichotomous approach between IT and operational technology (OT) use cases. Using the example of a smart factory, OT would represent the machinery and other universe of endpoints that need “real-time” communications whereas IT would represent employee connectivity, cloud workloads, and so on.