Private 5G Networks Will be Game-Changing for Some Companies

Private 5G Networks Will be Game-Changing for Some Companies
Futureiot September 2022
By Troy Morley

Why would an enterprise decide to use a private 5G network when there are competing technologies? Let´s do a quick overview of its benefits.

We have heard about 5G for a few years now. Newer smartphones are all 5G-enabled. Service providers want you to get that new phone and experience 5G. If you have a 5G phone, you may have even noticed that downloads are faster (much faster if you happen to be in certain areas). However, 5G is probably not changing your life (yet). Better than 4G? Yes, but perhaps not a transformative experience.

While most consumers think that 5G is all about them, the truth is 5G is ideal for addressing the networking needs of business and enterprise. Many of the new features of 5G may not even be noticed by consumers but will be game-changing for some companies. Some of these new capabilities will be offered by communications service providers (CSPs) to enterprises utilizing public 5G networks, but there is now an even more transformative option: private 5G networks.

Companies have long employed private wired and wireless networks (primarily Wi-Fi), as well as other network types, for their data needs, but why would an organization employ a private 5G network for data? A private 5G network is isolated and restricts the devices that connect to the network.

Wireless networks (of any type) add a level of flexibility not available with wired networks. Moving a connected device with a wired network may involve moving the network as well. This process is often expensive and, in certain situations, not possible. Wi-Fi works great in many situations, but it cannot scale to the same levels that cellular achieves.

Cellular network technology provides several advantages, including being designed for mobility (moving devices) and connection reliability, supporting greater coverage due to increased power levels, and allowing for much higher device density. Private 5G networks are not likely to replace Wi-Fi and wired networks entirely; instead, they will cover use cases that the other technologies do not cover or do not cover well.

Industries to benefit early from wireless networks

In the telecom industry, technologies are often debated and discussed in great detail. However, the reasons an enterprise decides to install a private 5G network is NOT about technology but about addressing business requirements that current networking options (Wi-Fi or wired networks) are not handling.

Public and private 5G networks enable use cases that other wireless technologies do not, and those use cases pay dividends that can be measured financially and with improvements in efficiency and safety. Small improvements in efficiency can add up to millions of dollars in savings. Keeping employees safe is more important than just the financial impact. These dividend-paying use cases may sometimes be solved with public 5G. However, there are other situations in which private 5G networks become the best solution. For instance:

Coverage issues may limit the public option. This is often the case in certain industries where public cellular coverage at a location is limited or non-existent, e.g., underground mines or offshore oil rigs.

While a facility may have adequate coverage outside, inside may be more challenging. Factories or warehouses are good examples, with both the building shell and contents as potential sources of interference.

Control of data can be a deciding factor. Some businesses require that their data never leave their control (for competitive or security reasons).

Most of the current activity in private 5G networks is with large enterprises in certain industries, such as mining, energy, manufacturing, and more. As 5G evolves over the next decade or so, private 5G networks will evolve to support smaller companies in almost all industries.

The consumer market has long been the bread-and-butter for CSPs. The telecommunications industry is capital-intensive and requires heavy investment to compete. CSPs have invested significantly in 5G. The stark truth is those CSPs depending just on the consumer market for a return on investment will fail.

5G is designed with the enterprise market in mind and provides new capabilities that no other networking technology can provide. To achieve an acceptable return on their 5G investments, CSPs must better serve customers outside of the consumer market. This may be with the public 5G networks. Or it may be by providing enterprises with private 5G networks. (Or perhaps some combination.)

Not all private 5G networks will involve CSPs, but perhaps the most lucrative will. CSPs must take advantage of this opportunity, and the most successful CSPs globally are actively involved in growing this market.

All private 5G networks will involve network infrastructure suppliers. As more of the world rolls out 5G, there will come a time with slower growth for network infrastructure suppliers and public 5G networks. With private 5G networks growing strongly, suppliers may not even notice the slowdown.

Private 5G networks have the potential to transform enterprise data communication needs AND enable CSPs to continue providing consumers and industry ever-evolving communications services. First published on Frost & Sullivan.