The private cellular market is expanding rapidly, driven by the Citizens Broadband Radio Service (CBRS) band in the United States and the appetite of communication service providers and infrastructure vendors to tap into new revenue streams in the enterprise domain.
Many Different Options for Wireless Networking Are Available Today
Both Ericsson and Nokia highlighted advanced strategies to target verticals, with or without the involvement of mobile service providers, while Huawei and ZTE are active in creating new use cases in their home market. At the same time, the MulteFire ecosystem is progressing, offering an alternative option with smaller vendors and a potentially more flexible ecosystem. On top of these, there are also many unlicensed frequency alternatives for enterprise networking, including Wi-Fi 6 (for high bandwidth, quasi-static applications), LoRa (for wide area, low power, and low bandwidth communications).
The initial Commercial Deployments are increasing at a staggering rate in the United States, with shopping malls, parking lots, and many more areas taking advantage of the carrier-grade nature and commoditized devices available for Private LTE. On the other hand, there are several enterprises that are largely indifferent to private cellular and will not deviate from their corporate Information Technology (IT) and networking plans to deploy private cellular. Although manufacturing is often cited as the most immediate opportunity for private cellular, it is lagging in favor of other verticals.
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Biggest Opportunities for Private Cellular
The biggest opportunity for private cellular is currently in energy and utilities and, specifically, Wide Area Networks (WAN) that cover large geographical areas. These networks are used to collect sensor data, connect power substations, ensure critical communications for employee safety, and even resell capacity to other utility segments, with coverage areas ranging from a single mine to several states in the case of U.S.-based utility companies. There is significant potential in large area networking, but that does not mean that this is an uncontested area. For example, LoRa and MulteFire are providing unlicensed alternatives to private LTE and, despite the fact that MulteFire has not yet been commercially deployed due to a weaker ecosystem, LoRa boasts several products and devices. In fact, several enterprise implementers claim to have deployed a Low-Power WAN (LPWAN) with LoRa in a matter of weeks, something cellular is not likely to achieve.
On the other hand, the manufacturing domain is more challenging, requiring Operational Technology (OT) to remain on the factory floor. Private LTE can certainly address this requirement, but as of now neither mobile operators nor large infrastructure vendors seem willing to provide private cellular network solutions for the bulk of the manufacturing domain, which is dominated by Small and Medium-sized Enterprises (SME). Although there are such initiatives in the market (e.g., Ericsson Industry Connect and DT campus connectivity solutions), these individual deals may be small amounts that these large companies are not accustomed to. Naturally there are headline partnerships, (e.g., Bosch and Osram deploying Private LTE with Ericsson and DT) but these will likely be limited to large manufacturers. There are two current alternatives to address SMEs in the local area domain (e.g., the factory floor):
- Smaller vendors can address the SME segment. This is currently taking place in the United States with the CBRS ecosystem, where vendors like CommScope, Federated Wireless, and many more are filing in where A&T, Sprint, T-Mobile, and Verizon cannot reach.
- Public mobile operator networks using “local breakout†that will allow OT data to remain on the factory floor, without sacrificing data security but at the same time, being part of the mobile operator network.
The CBRS ecosystem is native to the U.S. market and will not likely be available in other parts of the world in the next few years, but other markets are now starting to open shared spectrum in the ~3.5GHz bands. This is another argument that implies that private cellular in the manufacturing domain will take many years to mature, contrary to the wide area domain in which there is an immediate opportunity.
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The Next Step after Private LTE
5G will introduce unlicensed bands for public and private networks, or 5G New Radio in Unlicensed spectrum (5G NR-U), which will enhance the value proposition of cellular networks in enterprise verticals. CBRS will likely pave the way for the deployment of Private LTE across many enterprise verticals and set the foundation for more advanced use cases that will likely be driven by edge computing and more advanced applications. However, this will not likely be the case in the utilities and energy segments, where private LTE is primarily used for collecting sensor data in a safe manner. Advanced applications and use cases are already deployed in this area in the private cloud, where analytics and even Artificial Intelligence (AI) applications are optimizing the use of sensor data. On the contrary, the manufacturing domain has more to gain by combining OT, Communications Technology, and IT) into a single system in order to automate manufacturing processes and increase efficiency. Private LTE can become a major component of this industry, but there is a risk that the manufacturing segment will have moved on by the time 5G is ready for manufacturing. Regardless, the CBRS ecosystem will likely aid understanding of the opportunity and challenges of deploying carrier-grade equipment in enterprise networks but hybrid public-private networks will likely drive the bulk of deployments in the next two to three years.
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