Private 5G networks are already helping enterprises in a variety of industries to cut costs, reduce energy use and analyse business-critical data in real-time, says Aniruddho Basu, SVP & GM of Emerging Business at Mavenir.
The concept of a private mobile network is not particularly new, as such networks first started using 4G LTE technology in some countries in industries such as mining, emergency services and defence. But hand-in-hand with the increasing deployment of 5G networks, the concept of a private 5G network is gaining traction in many parts of the world as regulators are increasingly offering enterprises the opportunity to purchase their own 5G spectrum and deploy their own mobile networks, and this is becoming particularly popular in places such as Japan and Germany. To build a private network connectivity platform, enterprises need to purchase spectrum from the government, mobile network operators (MNOs) or third-party spectrum providers, obtain 5G equipment (i.e., base stations, mini-towers, small cells) from network infrastructure providers and connect this equipment to edge devices (smartphones, embedded modules, routers, gateways, etc.).
We believe that MNOs are also looking at the enterprise market as a significant opportunity for dedicated Private Networks. According to the recent GSMAI report on Operator revenue in the Enterprise market (Mar’21), data indicates that enterprise revenue as a share of operator revenue varies between 10% and 50%. With the majority of the revenue coming from traditional communication services and the focus being heavily dependent on selling SIM connections, airtime and data bundles. Transitioning the pricing model to a business where the KPI is in enhancing operational efficiency or productivity, and not around the raw consumption of minutes or data – is not proving to be easy or straightforward.
We have also seen that although 3GPP-based cellular technology can capture economy of scale benefits, in the case of Private Networks, there is still a fair amount of overall systems integration and customisation required to integrate the network with legacy enterprise applications customised security policies and so on.
MNOs need to revisit the business model and commercial constructs with enterprises. Additionally, they need to work on positioning their value in a world that will now have a lightly licensed or eventually unlicensed spectrum. So they are defining their role around use cases that demand mobility, where the device or user roams out into the macro network. Then the operator play makes sense as one can leverage the benefits of a dedicated network in combination with the interplay with a large macro cellular network. I also see MNOs pivoting towards new roles like managed services or managed network providers in time – this would be helpful for those enterprises and industries that adopt a more hands-off approach to the complexities of managing dedicated cellular connectivity platforms that interact with macro-cellular networks.
Q2. What Are the Private Network Opportunities for Mobile Operators and Enterprises?
Private 5G represents the intersection of several important technology trends that will impact both Mobile Network Operators (MNOs) and enterprises. MNOs will participate in Private 5G in many ways. Some private networks will be built, owned and operated by MNOs, while others will be controlled and managed by enterprise users, with operators acting as integrators and consultants. It will allow MNOs to evolve from being connectivity providers to being value-added partners for their enterprise customers. In addition, private networks will create a way for operators to earn revenue beyond the boundaries of their spectrum licenses.
It is also an exciting opportunity for public and private enterprises to unlock efficiencies, leverage data in real-time, and generate new revenue. Private 5G networks are already helping enterprises in a variety of industries to cut costs, reduce energy use and analyse business-critical data in real-time. It is arriving with a lot of promise about enabling new, innovative use cases that will bring great value to enterprises across different industries such as manufacturing, mining, logistics etc. Enterprises and industries can accelerate their digital journeys by enabling secure connectivity while collecting and managing massive amounts of business-critical data.
Q3. What Is Driving Investment in Private 5G Networks?
Private 5G has many use cases, most of which may still be undiscovered, but the myriad drivers of investment in private 5G can be grouped into three broad categories: digitisation, distributed computing systems, and democratisation of spectrum.
Digitisation: As corporate networks become the backbones of businesses, IT managers are looking to private 5G to create dynamic architectures that can respond to the demands of applications and users by re-allocating bandwidth and re-prioritising traffic. As enterprises digitise business processes, they typically see the need for more wireless connectivity. Use cases that will benefit from private 5G include mobility support for autonomous guided vehicles in a warehouse or intelligent video analytics to automate the quality inspection process on an assembly line that demands network requirements such as high throughput, high reliability, precise mobility, security, large device density and always-on operations. In the future, 5G Standalone (SA) will also deliver time-sensitive networking for high-precision devices.
Distributed Computing Systems: Cloud-based applications have transformed the business landscape, and now they are moving closer to end-users with the proliferation of edge computing. Enterprises and independent developers are creating applications designed for the network edge. These are apps that cannot reside in the cloud because of their low-latency requirements and cannot be hosted on end-user devices because they are too large and use too much bandwidth. Examples include video analytics and augmented reality. The promise of private 5G coupled with edge compute is very clear to the hyper-scale cloud service providers. Private 5G is a major opportunity for the hyper-scale cloud providers such as AWS and Microsoft, as evidenced by their approach of combining the scale benefits of centralised data centres with edge extensions into the enterprise, coupled with 5G access.
Democratisation of Spectrum: In most industrialized countries, regulators are looking to make more frequency assets available through a combination of licensed, lightly licensed and eventually even unlicensed spectrum. Although regulators in each country approach spectrum democratisation differently, most of them are working to facilitate at least some control of this asset into the enterprise sphere so that it can be deployed to advance business use cases. As a result, companies around the world are considering cellular as a viable option when they plan their networks.
Q4. How Is Mavenir Supporting Operators in Private 5G Deployments?
Mavenir’s Private Network solution is purpose-built for the evolution to 5G and the increased demand for use cases and applications. Mavenir offers its full portfolio of Multi-G solutions for the Private Networks market to address the needs of Enterprises, Industries and Service Providers. This end-to-end 5G system, based on cloud-first and open architecture principles, is highly suited to address both mass scale private enterprise use cases as well as bespoke high-end use cases for advanced industries.
We have a clear strategy to treat operators as our key partner and Go-To-Market channel. Alongside that, we leverage a network of major Systems Integrators (SIs) as well as regional or boutique SIs and app companies that deliver good local or vertical-specific engagement. We are also engaging with infrastructure owners on neutral host models, where the site owner delivers the network as a service to third-party customers. Finally, we go beyond a sell-through relationship to create deeper partnerships with the likes of NTT Data, for example, where we combine our connectivity technology with their BSS/OSS to create a full technology stack for a Private Network business case. In each constellation – MNO, SI, full partnership – we understand the value we bring, what our partners bring, and how that enhances the end customer’s business.
Q5. Mavenir’s Future Plan for the Indian Market
At Mavenir, we are enthused by the opportunities and benefits that Private Networks can bring to our partners, industry and society at large. We are motivated by the need to bring clarity to the market and deliver solutions in a way that works best for the end customers – the businesses and industries that will make use of dedicated wireless networks. We want to see partners become autonomous as soon as possible, and then we can focus on broadening and expanding the ecosystem to identify and create specific use cases.
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