To build or buy? That is a question that every business considers for nearly everything, from trucks to office spaces. Today, enterprises are increasingly asking the same question about cellular: Should they get service from a mobile operator or become operators themselves?
Private cellular networks aren’t a new concept. For example, electric utilities such as Alliander have deployed 3G CDMA in the 450 MHz band, while other utility companies have used 4G LTE in a variety of bands. Availability and reliability are two major reasons why so many utility companies chose to build and operate their own networks.
“Utility companies don’t want to have to compete with a public network’s other customers for bandwidth in the aftermath of a storm or other major event, and they don’t want to find out that the public network is down when they need it most because the mobile operator wasn’t diligent about maintenance, such as generator fuel levels,” says market research firm Heavy Reading’s Tim Kridel.
Utility companies aren’t the only businesses that need high availability and reliability. Any mission-critical enterprise application is a potential candidate for a private network, such as Industry 4.0 factory automation. Private networks also provide more security because access is limited to that enterprise, which minimizes threats such as malware attacks and industrial espionage. This, of course, isn’t limited to the industrial sector.
In remote locations such as mining, agriculture and forestry operations, private cellular networks often are the best or only option. One reason is because mobile operators can’t or won’t extend their public networks to areas where there are few or no consumers. Another is because satellite is too expensive and doesn’t meet performance and latency requirements.
These benefits are among the reasons why one third of manufacturing companies are considering applying for 5G licenses. And nearly half of US industrial companies intend to apply for local 5G licenses, much more than the global average. Twenty percent of enterprises believe they need private networks and 80 percent of these enterprises have expressed willingness to pay for it.
According to the Global Mobile Suppliers Association (GSA), manufacturing is an early adopter of local area private mobile networks, with 51 identified companies holding suitable licenses or involved in known pilots or deployments. Mining, academic organizations and ports also actively trialing local area private mobile networks. Utilities, police, security, public safety and rail are the biggest users of wide-area private mobile networks. Companies in the communications/IT sector are also key investors in private mobile networks.
5G provides future-proofing, performance and more
When developing a private network strategy, the first step is choosing a technology. For most organizations, 5G is the best option for two reasons, starting with future-proofing. 5G network infrastructure, chipsets and devices will be widely available for at least the next two decades. And as owners, enterprises also can keep their private networks in service long after mobile operators have phased out their 5G services in favor of 6G.
Another reason is performance. 5G was designed to meet the unique requirements that many businesses have. For example, the 5G standards include three sets of capabilities that are ideal for a wide variety of enterprise applications:
- Enhanced Mobile Broadband (eMBB), which is good for bandwidth-intensive applications such as surveillance camera 4K video backhaul.
- Ultra-Reliable Low-Latency Communications (URLLC), which enables latencies as low as 1 millisecond. That’s ideal for delay-sensitive applications such as factory automation.
- Massive Machine-Type Communications (mMTC), which enables 5G networks to support up to 1 million devices per square kilometer.
When assessing infrastructure and device vendors, enterprises should scrutinize their ability to support the capabilities they need, whether it’s eMBB, URLLC, mMTC or something else. For example, URLLC is extraordinarily complex, to the point that it’s still being refined by 3GPP.
Device cost is another important consideration. Although the iPhone 12 is an example of how 5G is now a mainstream technology, it’s still near the top of the cost curve. So if a business needs hundreds of thousands of low-cost IoT devices, 5G’s price premium may be a near-term hurdle to adoption. This premium may take even longer to dissipate in the case of highly specialized devices.
That said, a private network isn’t built overnight. The cost of IoT endpoints and other devices will be significantly lower a year or two from now when that network is ready to launch. So, price points that seem prohibitively high today will look affordable in the near future.
Enterprises also should ask prospective vendors about their ability to support specific applications. For example, 5G-based time-sensitive networking (TSN) has been tested only in trials rather than in large-scale, real-world deployments. So if a manufacturer needs TSN for its factories, it should scrutinize whether device and network infrastructure vendors can meet that requirement.
Another key consideration is whether to use licensed or unlicensed spectrum — or a mix of the two. There’s no shortage of vendors supporting both options. But regulatory requirements vary by country. In the U.S., for example, “free” spectrum was still auctioned, giving priority access (PAL) to CBRS users. Multinational enterprises should pay close attention to these requirements because they directly affect their options and costs in the countries where they want to have private networks.
All of this is a lot to think about. But according to the GSA, 185 private networks are already on-going worldwide. That means if you’re not considering private 5G today, chances are high that your competition already is.
The good news is that the selection of 5G infrastructure and 5G IoT devices is large and growing, making now the ideal time to start investing in a private network. The technology also has started to shed its price premium, making it increasingly affordable for even cost-sensitive applications such as utility automated meter reading (AMR). If you’ve ever considered a private network, now is the time to take the plunge.
Arnab Das, business head, Capgemini Engineering Advanced Connectivity CoE
