Challenges and Requirements of

the Private 5G Network Market

In conjunction with Intel Corporation

October 2021
Contents
Executive summary 3

Introduction 4

Deployment models 7

Use cases 9

Connectivity performance criteria 10

Spectrum 14

Radio and core infrastructure 17

Market landscape 18

Market positioning examples 22

Outlook 25

2
Executive summary
The potential of the market opportunity for private 5G networks is only just beginning to be realized — there
are numerous industry sectors that could benefit from 5G as a transformative technology platform. Enterprise
uses of 5G, infrastructure and system requirements, business models, market positioning and the solutions
value chain are still evolving, and the market is somewhat fragmented.
Different deployment models have emerged based on options for enterprises to integrate their private 5G
network with the public mobile network or build their own separate network. Within these, there are several
variants, and more are likely to emerge.
Private networks have 5G connectivity as their building block, but these are demanding environments with
complex network and connectivity performance metrics, upon which specific uses of the technology will
depend.
Today, many of the requirements for private networks can be fulfilled with more-mature LTE solutions, so
suppliers are increasingly positioning their offerings as “5G ready”, to lay a clear upgrade path to the 5G goal.
The promise of 5G private networks goes somewhat beyond connectivity and includes integration of IT
systems with operational systems, management of multiple network segments through a single screen, more
efficient and sustainable energy usage, optimization of workspaces and associated costs, plus more-secure
working environments.
Spectrum allocations have an effect on mobile operators’ strategies, and there remains much debate about
5G spectrum for private networks, with regulatory approaches varying. Allocation of appropriate spectrum is
vital if this market is to fulfil its potential.
Partnerships between operators, cloud providers, technology suppliers, and solutions and services providers
with sector-specific knowledge such as system integrators, will be vital in addressing the private network
needs of different industries.
This report considers some of the factors for success for providers of network connectivity and technology
solutions.

3
Introduction
Private mobile networks — or non-public networks, as the 3GPP calls them — refer to the use of cellular
technology to create a dedicated local area network (LAN) for a private customer, such as an industrial
enterprise or public organization (for the purposes of this report, we refer to these collectively as
“enterprises”). A recent study by the GSMA showed that major growth in revenue for mobile network
operators now comes from enterprises and deployments for the Internet of things (IoT), rather than from
consumers.
Private mobile networks can be deployed on single industrial sites, business campuses or enterprise locations,
be spread across multiple linked sites within a region, or deployed as a nationwide network. Although private
networks are not a new concept, it is a rapidly growing segment. Current growth is being driven by the
promise of 5G, although most current deployments are actually on “4.9G” LTE networks with multi-gigabit
speeds and 10 millisecond latency, owing to a lack of 5G industrial devices. However, the more ruggedized
and specialized devices are starting to appear.
Interest is growing because 5G delivers superior performance in terms of capacity and latency compared with
other wireless standards such as LTE, and greater flexibility than wired Ethernet LANs, which are impractical
for connecting large numbers of people, devices and pieces of equipment in a dynamic environment with a
requirement for mobility.

4
The proliferation of 5G networks is opening the door to wider adoption of private mobile networks with the
sector-specific, customized requirements of high-performance dedicated networks. Several other factors
are also driving the adoption of private networks:

Industry 4.0 Data-rich applications

This concept, which includes smart Augmented reality, virtual reality
manufacturing, smart warehousing and high-definition video for
and autonomous fleet management, remote inspection, monitoring and
is based on industries gathering and using data to surveillance are just a few examples of applications
create new IoT revenue streams and cost savings that are well-suited to private 5G networks.
through more-flexible production, increased
mobility and connectivity and greater operational
efficiency.
Remote and underserved
locations
Digital transformation Areas with little or no mobile network
infrastructure may provide a home for
Utilities and infrastructure such as private 5G networks. If public 5G network roll-out
ports, airports, healthcare and urban is slow or delayed in a particular area, any campus,
facilities are embarking on digital industrial facility or enterprise location in that area
transformation, partly to improve data security could be a candidate for a private 5G network.
and protect critical digital and physical assets.
These environments need more-robust, dynamic
and responsive networks to be able to address Multi-access edge
challenging situations in real time. computing
The use of cloud computing principles
Mission-critical networks and technology in a local context
is rising. The cloud provides access to innovative
Public safety, national security,
software services with a flexible consumption model.
emergency response and
However, many enterprises have applications that
government systems are ripe for
remain on premises owing to data residency or
5G deployments. Organizations, including public
privacy constraints, strict latency requirements or
safety agencies, are starting to deploy 5G (or
the need to directly connect to equipment on site.
5G-ready) private networks for applications
Or they may have workloads that generate large
including push-to-talk group communications
volumes of on-site data or in inaccessible locations
and real-time video surveillance. Many critical
such as oil rigs, and would incur high costs for
communications systems are based on narrowband
transferring all the data to the cloud.
technologies and are now reaching the end of their
life cycle; 5G offers a range of capabilities beyond
those of older technologies.

5
All these scenarios drive adoption of on-premises
edge computing, which swaps traditional servers
and systems for cloud computing stacks. With
these edge platforms experiencing increased data
load from digital transformation and the use of IoT
technologies, private mobile networks can deliver
high-performance, secure, scalable and flexible
connectivity options.
Underpinning the operations of 5G networks is
the “triple A” of emerging capabilities: artificial
intelligence (AI), automation and analytics.
Although private networks are typically on a
smaller scale than the public 5G network of a
mobile network operator, they are highly complex
and so also need these elements to meet the
needs of enterprise use cases.
Unlike generic mobile connectivity services
based on public networks, a private mobile
network can be configured to the specific needs
of an enterprise by using network slicing, often
combined with private radio coverage, and can be
varied by site if needed. Typically, data security also
is tighter as the enterprise has greater control of
network and data access than may be possible on
public networks. It can even contain all its traffic
on site, which often also reduces latency. The
private mobile network also allows the enterprise
to determine the network coverage, quality and
deployment timetable, because it can be installed
and maintained by on-site personnel, enabling
faster troubleshooting.
This report considers the critical connectivity
requirements and other success factors for the
deployment of private mobile networks, as well
as looking at the commercial value chain and
emerging marketplace.

6
Deployment models
There are three principal deployments models for private 5G networks, largely based on the extent to
which a mobile network operator supplies communication and infrastructure services to the enterprise
(see diagram below). The models range from a completely standalone private network entirely separated
from public mobile networks to ones that use some dedicated infrastructure and management alongside
shared radio- or core-network elements provided by the operator. They can be nationwide networks — for
example, Ericsson has deployed a private network for utility company EDF in France that covers 19 nuclear
power plants — regional, covering several sites, or a single location, such as a factory or hotel. Typically the
term “private 5G network” is used to indicate a single-site deployment.

Mobile network operator No mobile network operator

1 2 3

Public infrastructure Hybrid infrastructure Dedicated infrastructure

Industrial premises or business campus

Local radio coverage as an As 1, but additional operator Standalone on-campus

extension of public infrastructure infrastructure deployed on deployment; can have spectrum
with end-to-end network slicing campus (cloud plus core) dedicated for industry

Private coverage added to public Radio access network (RAN) and Either all the network is deployed
network; all user plane and control some control plane elements on premises as a standalone private
plane elements provided by public shared with public network, but the network with no shared RAN, or
core network private network has its own local the RAN is shared and can be
user plane and services managed by an operator

The first model above shows a private 5G network in which radio coverage — by 5G New Radio
1 units — is the only privately added element, with all infrastructure and user-plane and control-plane
functions provided by the public 5G network, managed by the operator using network slicing.

The second model is similar, with the radio access network (RAN) and some control-plane
elements shared with the public 5G network, but the private network has its own local services too;
2 this is increasingly referred to as a hybrid model, because the private network is integrated with the
public one, allowing operators to exploit existing networks and spectrum assets. This is often an
option if the enterprise requires roaming between public and private networks.

The third model is a dedicated network, in which the whole network is deployed on premises as a
standalone system, either fully independent of the operator’s public 5G network, utilizing dedicated
3 industry spectrum, or with shared RAN infrastructure managed by the operator. Typically this model
is used when there are more-stringent reliability, availability and latency requirements that can only
be achieved by close proximity of the private network core to the RAN and the users or devices.

7
If an operator builds and operates a private 5G In our view, there will be significant demand for
network based on the public network or a hybrid new tiers and types of managed service provider
one, it can be easily integrated into the operator’s for private mobile networks. Some of them will
public network. Benefits include roaming and be telecom operators, but network-operations-
tight integration, enabling service continuity. as-a-service is being targeted as an opportunity
Additionally, network operation and maintenance by other players, including equipment suppliers,
of the network can be handled by the operator, system integrators and cloud providers.
depending on the level of integration.
Other hybrid variants are possible too, such as
In the standalone deployment (the third model), shared networks, with strong interest coming
they must be arranged by the enterprise, either from government bodies such as police forces
undertaking the work itself or contracting a and local council authorities. This could support
system integrator, although operation and users and devices roaming between private and
maintenance of standalone networks are also public networks. For example, a vehicle leaving
offered as a service by some operators and a logistics warehouse with a private network and
network equipment suppliers. This model does roaming onto the public mobile network while in
offer the various benefits of keeping data and transit.
traffic within a dedicated network.
Current models and definitions remain open to
There is significant debate about whether an change; over the next two to three years, we
enterprise is best served by integration services expect to see a widening range of approaches
provided by an operator or whether the based on different combinations of either public
capabilities are best delivered in-house. Currently, or private core networks with public or private
the market is trending heavily toward integration edge and RAN infrastructure. They will be driven
with the public network, with enterprises using by competitive differentiation, a burgeoning
the support offered by operators, but this could solutions ecosystem and the crystallization of use
shift toward standalone private networks as case requirements from enterprises and industry
specialized uses for private networks emerge, sectors.
prompting enhanced network performance
requirements, and as more 5G spectrum is
licensed for private networks. The US and Over the next two to three years, we expect
Germany have announced licensed spectrum to see a widening range of approaches
allocation for mission-critical and industrial based on different combinations of either
use, and several other countries are debating public or private core networks with public
the allocation of 4G and 5G spectrum licences or private edge and RAN infrastructure.
directly to enterprises for industrial networking.
Potentially, enterprises can employ different
deployment models, starting with a private 5G
network based on dedicated network slices
but moving to a more self-reliant approach
as different uses for a private network emerge
within the business, or as they develop their own
networking capabilities. After all, most enterprises
are Wi-Fi network operators running their own
wireless LANs, so arguably they could extend
this to 5G, especially if hardware suppliers build
more and more networking capabilities into their
products. In a decade it could become the norm
to do this, at least for larger enterprises.
That said, even though some of the specialized
skills needed to build and run mobile networks
could be reduced with automation, planning,
deploying and operating a private 5G network
will remain a significant obstacle for enterprises.

8
Use cases
There are several uses for private 5G networks, with potential applicability in different industries. This is not
an exhaustive list, as more applications are being developed all the time. All come with an exacting list of
network performance requirements.

Remote and
AI and machine learning
underserved locations

Asset control Risk management

Edge computing Robotics

Mission-critical
Smart work floors
push-to-talk capabilities

Preventative Workforce
maintenance communication

Real-time situation Workforce health

awareness and safety

9
Connectivity performance criteria
Based on our research with operators, cloud providers and technology suppliers, the following sections
represent the critical connectivity performance criteria for enterprise private networks. These requirements
are often complex and demanding, and this is why 5G is such an important technology for private mobile
networks; although other connectivity technologies such as LTE, Wi-Fi, wired Ethernet and fibre all have
merits, none have the all-round potential to meet these needs. We look at some of these alternatives in our
discussion of spectrum below.
It is worth noting that newer versions of Wi-Fi protocols — Wi-Fi 6 and Wi-Fi 6E — have adopted
performance-enhancing techniques from mobile networking; these include multiuser multiple-input
multiple-output (MU-MIMO) antennas and orthogonal frequency-division multiple access (OFDMA) to
improve capacity and performance on heavy-traffic connections.

Coverage
A network fundamental, coverage must be wide outdoors and continuous, with full indoor coverage:
in most scenarios, a large share of network traffic will be generated indoors. Although not all use cases
will require full mobility, it is advisable to provide this, as future usage could depend on it — for example,
autonomous vehicles rely on ubiquitous coverage within a site.

Capacity
To support ultrahigh-definition video feeds, necessary for scenarios such as remote visual inspection,
speeds of several hundred megabits per second per application are required, which was previously only
available through fibre-based connectivity. The superior bandwidth of 5G networks supports high data
volumes with simultaneous uplink and downlink communication.

Reliability
High availability means that the network is always available to end users. Mission-critical processes such
as those in various industrial, utility and healthcare applications require a 99.9999% reliability rate, which
translates to an expected downtime of no more than five minutes per year, equivalent to the performance
of wired Ethernet networks. High-quality coverage and capacity are of course underlying factors in
guaranteeing maximum reliability within a private mobile network, as is consistent handover functionality.
Also, any network or system maintenance must be planned for and controlled. And it is important for
enterprises to be able to specify the service quality required by different network segments, as this can
further reduce downtime for prioritized applications.

Density
The ability to support massive density of connected devices such as sensors is a growing industrial need. Ideally,
every tool in an assembly plant or item of medical equipment in a hospital could be connected to a private
network. This would allow equipment to be monitored and maintained for higher productivity, as well as greatly
enhancing simple asset management.
LTE networks can only support 100,000 devices per square kilometre; 5G can connect up to 1 million. Over a
large enterprise campus or industrial facility, this translates into an ability to connect 100,000 devices, compared
with LTE’s 10,000. Even 5G’s scale of connection density can be limited in comparison to enterprise demand: as
an example, chemical giant BASF’s main production facility in Ludwigshafen, Germany, currently has 600,000
networked sensors and other devices; the manufacturer has stated it could use a connection volume of 10 times
as much.
10
Latency Control
Ultralow latency is required in numerous Industry Enterprise networks are often highly complex.
4.0 settings, such as process automation, real- Managing them requires sophisticated
time public safety communications, remote- management tools and expertise, so this may
controlled devices and robotic control. Although be offered as a service by network operators or
5G standards support latency of less than 1 system integrators. Private 5G networks enable
millisecond, latency on private 5G networks can provisioning to be done in-house — although
be lower than on public networks by deploying the management feature-sets may need to be pared
core of the private 5G network on premises. down for non-telcos to operate — meaning that
the enterprise can maintain complete control over
This means all data can be processed locally all aspects of the network, such as how various
without any need for off-site processing, which network resources and data are used, how different
could entail an additional lag. This might only be user groups, devices and applications are prioritized,
a few milliseconds if data is processed using a and how network traffic is handled. For instance,
network edge approach, but could amount to tens an enterprise can determine that mission-critical
of milliseconds as the data travels to an external devices are given highest priority on the network.
site such as a remote data centre and back again.
Latency is a major consideration that we believe Quality of service
will enable adoption of hybrid and standalone
deployment models in which the core of the Network quality of service is comprised of
private network is located on premises. performance metrics including connection
throughput, latency, jitter (timing variance), dropped
But although latency is a key performance indicator, packet rates and others. If a private 5G network
network performance also depends on guaranteed is on dedicated spectrum, an enterprise can
delivery time. For this, time-sensitive networking potentially control each of these metrics. It is vital
and its cousin time-coordinated computing are that system performance and network resource use
important recent innovations and private mobile can be customized to the specific needs of different
networks will need both. For more related to this services within a private network deployment, and
area, see Intel Spends Time at the Edge. that mobile network operators can demonstrate an
ability to set and meet business-critical connectivity
Redundancy requirements and strict service-level agreements.
Environments with metal obstructions, such as A network equipment supplier told CCS Insight that
cranes or conveyor belts, can be challenging in a service-level agreement for a private mobile
for wireless connectivity, as metal objects can network, the critical resolution time for network
inhibit the transmission of radio signals. The problems is typically half that for public network
3GPP Release 16 capability known as coordinated operations — for example, two hours rather
multipoint is essential for industrial applications, than four hours for a public network — making it
as it enables multiple transmitters to create essential that systems have an AI-based platform
redundant paths to the receiver. It is beginning to that predicts network problems before they happen.
be supported in chipsets now coming to market.
Security
Interworking
Given that data breaches and cyberattacks
For many uses cases, it is essential that private are a regular occurrence and data protection
networks are able to interoperate with public ones regulations are being tightened, ensuring end-to-
— critical services like emergency vehicles need end security is a fundamental necessity for private
service continuity while moving from one network networks. Enterprise data, network infrastructure,
to another, which requires a level of integration physical property and workforces all need to be
between networks. More than just roaming, which protected from cybersecurity threats. In addition to
is not fully specified in 5G standards yet, this data protection and device or user authentication
entails all the performance metrics following an techniques to protect assets, private networks
enterprise’s devices when connected to a public have the added advantage of network isolation as
mobile network. For operators offering private part of their security armoury — enterprises can
mobile network services to an enterprise it is also ensure sensitive data is stored on premises, and
important to ensure that 5G interoperates with also set up their own security policies rather than
the enterprise’s existing software-defined wide relying on an outside provider.
area network (SD-WAN) platform.

11
Although it might seem that a private 5G network edge AI computer located on the operator’s
has obvious privacy and security advantages over premises, but physically close — say, several
a public network, the extent to which it is secure tens of kilometres — to the enterprise. Data
depends mostly on where data is processed — an could travel over public networks to and from
enterprise can take different approaches to where the telecom edge computer, or it could be co-
it chooses to process its data, with different located in the enterprise’s private 5G network.
security and privacy implications for each. And This methodology is referred to as “colo edge”
although the enterprise has its own network, it is and seems likely to be a commonly implemented
not necessarily the case that data never leaves it. approach to private 5G deployments using
telecom edge AI.
An enterprise keeping its data exclusively on
site would need infrastructure (hardware and CCS Insight expects security to be a vital
software) to process data locally, in addition to differentiator for solutions providers, especially
a private network. For example, for machine in enterprise environments with sensitive data
learning computing, an enterprise would have and commercial intellectual property or those
to operate a machine learning appliance or operating mission-critical applications.
equip its devices with edge AI chips so that they
Industrial buyers will want to vet any new system
could undertake that computing function on
for data security before bringing it onto their
site. Alternatively, an enterprise could send a
premises. That is challenging enough for regular
proportion of its data off the private network to
computing and networking systems, but could
be processed in the public cloud, possibly once
create significant delays when enterprises are
it has been encrypted to mitigate any increased
deploying highly complex new networks they
security risk.
are unfamiliar with. It is vital that operators,
Potentially, these scenarios get more complicated system integrators and solutions providers have
if an enterprise works with an operator using convincing and demonstrable security capabilities
edge architecture, for instance with a telecom in their narratives to enterprises.

CCS Insight expects security to be a vital

differentiator for solutions providers,
especially in enterprise environments
with sensitive data and commercial
intellectual property or those operating
mission-critical applications.

12
Network slicing Service assurance
5G supports the creation of multiple virtual Assurance is a critical element in 5G network
networks that can be customized for a specific performance and, ultimately, the operators’ ability
service or application over a purpose-defined to generate revenue. Operators need to monitor
network slice, so a private 5G network can performance indicators, which can be used by
be optimized for the needs of the enterprise network automation and analytics to provide
and the various use cases within the network. ongoing real-time performance optimization
Network slicing allows network performance and troubleshooting. Network assurance
to be assigned by priority rather than allocating solution providers including Accedian, Keysight
an equal network share to each device. For Technologies, Spirent Communications and Viavi
example, applications such as real-time video Solutions have adapted their network testing and
feeds could be given highest priority, and monitoring products for private mobile networks.
sensors and tracking devices that can function
with lower bandwidth or higher latency can Other Factors
have a lower priority. In defining connectivity requirements for a private
Although it promises much, network slicing is mobile network, it is important to understand
in its relative infancy, with successful examples several other factors too:
yet to be established for all live deployment use • Devices that will be connected such as
cases. For instance, one of the more challenging smartphones, PCs, tablets, chips and sensors,
scenarios could require network slices to be as well as their operating systems and firmware
maintained while roaming between private and
public networks, and even between different • Coverage area, for example, a single building,
public networks in different countries. a large university campus or several locations
in a region
Aside from the performance requirements
outlined above, there are some other important
• Spectrum availability
considerations about connectivity that relate to • Applications that will be used, such as on-
the managed services environment for private premises enterprise resource planning or cloud
mobile networks. These include planning and services
deployment, managing a comparatively small-
• Financial considerations, including the overall
scale network in an efficient way, and scaling
cost, assigning costs to capital expenditure or
up and evolving the network to grow with
operating expenses, and the preferred payment
the changing needs of the enterprise an on-
model.
demand basis.

13
Spectrum
Wireless networks require radio spectrum, so this is a critical element in creating private mobile networks.
To some extent, the growth of the market for private 5G networks depends on the amount of spectrum
made available for their use, either licensed directly to enterprises or through operators. In addition, the
performance of private 5G networks will depend on the spectrum ranges allocated.

Mid-band 5G spectrum, in the 1 GHz to 6 GHz range, is effective for indoor usage, potentially delivering
ubiquitous coverage with a comparatively low number of radio end points, either small cells or antennas.
Alternatively, millimetre-wave 5G spectrum, in the 24 GHz to 29 GHz, 37 GHz to 43.5 GHz or 66 GHz to 71
GHz ranges, offers higher throughput speeds and lower latency, and its shorter-range signals are more easily
directed within a building, reducing potential interference with public mobile networks, but it can require a
denser deployment of radio end points compared with networks based on mid-band spectrum.
Over the past few years, more governments and telecom regulators have made small-scale mobile spectrum
licences available specifically to be used in enterprise locations, or across wider coverage scenarios such
as for smart city deployments. In some cases, nationwide or wide area spectrum licences have been made
available, for larger-scale private mobile network deployment — typically for specific sectors such as utilities
to use in smart grid infrastructure. Alternatively, non-operator organizations may cooperate with operators to
lease spectrum.

Ofcom and Bundesnetzagentur

Ofcom in the UK and its German counterpart, the Bundesnetzagentur, provide two examples of
regulatory positioning on spectrum for private networks.
UK telecom regulator Ofcom introduced a new licensing system in July 2019 covering localized access
to the 3.8 GHz to 4.2 GHz band, which is well-suited for private 5G networks, and to 1800 MHz and
2300 MHz shared spectrum — these are airwaves already licensed but which the mobile operator does
not plan to use in the specific location of the private network for the next three years. New licences
could be awarded if the new network would not interfere with the existing licence-holder’s plans.
The licence fee was fixed at £950 for three years, but critics argued during the consultation period that
this was not enough time for those operating a private 5G network to stimulate the market, establish
operating models and generate a return on investment. Ofcom stated that longer-term licences may
be issued if the operator holding the spectrum agrees.
Germany’s federal network agency, the Bundesnetzagentur, set aside 100 MHz of spectrum in the
3.7 GHz to 3.8 GHz band specifically for industrial use in local deployments, and in November 2019
opened licence applications for 10-year local licences to companies in the automotive, manufacturing,
utilities, shipping, chemical, and oil and gas sectors. By March 2021, the agency had approved 111
applications to establish 5G campus networks.

14
Private Mobile Networks
With regards to spectrum for private mobile
networks, various options are currently deployed
or under consideration. Despite 5G grabbing the
headlines for its long-term potential, according
to Nokia 81% of its current private mobile
deployments are based on LTE spectrum, with
9% based on both LTE and 5G, and 10% being
5G only. LTE is typically more spectrally efficient
than Wi-Fi and also offers network slicing,
although only on the radio part of the network.
Nokia has deployed a private LTE network to
automate one of its base station factories, with
IoT analytics running on an edge cloud, a real-
time digital twin of operational data and internal
logistics automation via connected mobile
robots. According to Nokia, the use of these
networks has improved productivity and reduced
the cost of delivering products to market.
As another example, UK food retailer Ocado has
a private LTE network controlling over 1,000
fast-moving robots in a logistics centre for online
grocery orders, all managed from a single base
station, which communicates with them up to 10
times per second.
Other options include standalone 5G in
unlicensed spectrum using MulteFire, which in
effect enables unlicensed 5G networks to be
deployed without any connection to licensed
spectrum, so that an organization could build
a 5G radio network with a 5G core in a defined
area for its own use — in other words, a private
5G network.
For example, Nokia is deploying a private 5G
network at industrial robot and automation
specialist Kuka’s “smart” production and
development centre in Augsburg, Germany.
The network is based on Nokia’s compact
Digital Automation Cloud LTE and 5G solution,
a platform comprising network and user
equipment, cloud-based network and device
management, plus industrial connectors and a
smattering of IoT applications. Kuka is using its
own spectrum at 3.7 GHz to 3.8 GHz, licensed
from the Bundesnetzagentur.
Another option is using 5G in shared spectrum,
such as the Citizens Broadband Radio Service
(CBRS) band in the US. This operates at 3.5 GHz,
and the Federal Communications Commission
has set up a three-tiered spectrum-sharing
framework.

15
Private Wi-Fi networks large smart factory might require a premises of
5 million square feet, with thousands of workers,
Although enterprise Wi-Fi has long operated in suppliers and other visitors coming in and out.
free-to-use unlicensed spectrum, this means Workers connect to the Wi-Fi network on third
it can be used by anyone, at any time. Its party-issued devices. On the same manufacturing
protocols do not protect against contention- floor, many thousands of precise robotic devices
based usage or interference, so it can become are in operation, working to millisecond accuracy,
congested and inadequate for supporting without which the entire assembly line could
critical communications with predictable potentially be thrown out of sync, resulting in
and deterministic performance connection delays or faulty products. The Wi-Fi network is
requirements. Only networks based on licensed critical to support workers’ device connectivity,
spectrum guarantee control over network usage, but a 5G network is needed to support the
though Wi-Fi 7, which is currently being specified mission-critical tasks of the assembly robots.
and is due to reach the market in two years,
should also address this. Compared with Wi-Fi, private mobile networks
offer improved security, better spectrum
However, unlicensed spectrum can provide efficiency, and improved hand-off between
an additional resource for scaling non-critical radio cells among other benefits, although as
communications, and certainly Wi-Fi will Wi-Fi 6 and Wi-Fi 6E are more widely deployed it
continue to have a role to play in supporting is arguable that new Wi-Fi capabilities will reduce
private 5G deployments. Deploying Wi-Fi is fast, this performance gap.
easy, and is often cheaper than private mobile
networks. It remains a viable option in enterprise According to Deutsche Telekom, 85% of its
environments where ease of deployment and low enterprise private network customers request 5G
cost of infrastructure are priorities. plus Wi Fi connectivity, initially with light integration
using a multipath solution but later moving to a
When asked whether it would be necessary for deeper setting in which Wi-Fi is directly integrated
enterprises to have private 5G networks if they with the 5G core.
already had Wi-Fi 6, Cisco — a proponent of both
technologies — gave the following example: a

16
Radio and core infrastructure
Small cells, or other types of enterprise-grade RAN equipment such as distributed antenna systems, are
vitally important infrastructure for private mobile networks. Although small cells have been around for years,
they have often been awkward to deploy and manage, and until now, the business case for deploying them
within an enterprise was not always clear. As in the public mobile network, the private mobile market is now
seeing significant innovation in cloud RAN products, driven by virtualization and functional disaggregation,
further increasing options for cross-campus and in-building networks, making it easier to deploy and
operate smaller infrastructures.

From a capital expenditure standpoint, 5G In a briefing with CCS Insight, Deutsche Telekom
radio systems need to be economical, fast to stated that orchestration is the cornerstone of
deploy and straightforward to operate, and its IoT and private network strategy, as it enables
ideally integrated with other IT and networking a partner-based ecosystem based on two
systems. All major network equipment suppliers elements: connectivity orchestration, such as
— Ericsson, Huawei, Nokia, Samsung and ZTE the interoperability of its networks with those of
— have a broad range of 5G radio end points partner Jasper Networks; and automated device
to provide network coverage indoors or across orchestration, including device onboarding,
outdoor campus sites, catering to all possible configuration and management.
architecture and deployment models.
The network solutions ecosystem has produced
More than the radio technology alone, it is the core network options for different private
flexibility, modularity and programmability of network deployment models, depending on the
5G system architectures that means private needs of the enterprise, whether they require
5G networks can potentially support different hybrid edge deployments that support local
deployment and operation models and enable applications and data processing as well as
such a broad range of demanding applications management of multiple sites, or centralized
across a variety of vertical industries. Much of cloud deployments that use public clouds to
that capability is derived from the core network. operate some private network functions.
An enterprise-grade, cloud-based 5G core acts
as the brain of the private network, orchestrating Finally, it is worth noting that private mobile
the network, providing authentication, mobility, networks may also use other network
security and so on. technologies and infrastructure. For example,
Nokia’s industrial-grade private wireless solution
is complemented by its IP multiprotocol label
switching, optical, wireless backhaul and passive
optical LAN products, providing a potential
From a capital expenditure standpoint, differentiator against its competitors.
5G radio systems need to be economical,
fast to deploy and straightforward to
operate, and ideally integrated with
other IT and networking systems.

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Market landscape
As new applications and use cases emerge within a business, enterprises must answer the question, “What
sort of network do I need to meet my strategic objectives?”.

According to several technology suppliers we spoke to, discussions about deploying private networks are
typically initiated by a single usage need in the enterprise. This might be related to an enterprise recognizing
the limitations of existing communication infrastructure or identifying new use cases, but could be a
response to broader paradigm shifts within a sector or within technology, such as the emergence of smart
grid in utilities, for example, or a more general awareness in an enterprise of the power of distributed
computing. It can also be triggered by an incident in the business — a practice becoming unsafe, or a data
breach, or some kind of failure in equipment or systems.
Enterprises are focussed on outcomes, rather than technology. Usually, discussions about initial private
mobile network deployment are with a view to meeting the initial use case need, as well as building a road
map for the network, to scale it up, add enhanced capabilities and support more-sophisticated future uses.
But often an enterprise does not always realize the full potential of 5G and the usage scenarios that could be
supported, putting operators, cloud service providers and technology suppliers in the role of 5G evangelists.
As discussed above, enterprises can take multiple approaches to private 5G networks with several
deployment models available. The largest enterprises are likely to install private 5G networks using fully-
owned infrastructure and dedicated spectrum (in markets where licences are available), managing networks
either with their own in-house team or outsourcing it to an operator, system integrator or equipment
supplier. Medium and smaller companies are more likely to lease network equipment and outsource network
management, either subleasing spectrum restricted to their site location or using unlicensed spectrum.
Depending on the nature of deployment and business model, the enterprise or the operator might pay for
the equipment and installation, or these costs could be shared. There are other subscription-type models
in which an integrator provides the private network as a service, with no upfront capital expenditure from
the enterprise, or multitenant deployments, featuring shared RAN or a neutral host arrangement integrating
multiple operators between private and public mobile networks.

Integration
The notion of integration with public networks is complex. Devices on a private network could have
multiple SIMs (or e-SIMs) to interact with a public network, or roaming arrangements between the
private and the public network might be needed. If the private network is a slice of a public network,
there are other challenges: assuring consistent and predictable behaviour on devices; ensuring security
and privacy across boundaries, and of course, monetization models. The 3GPP Release 16 specification
offers mechanisms like closed access group cells for device navigation across both domains, but few
devices have this capability currently. Also, service-level agreements, control and visibility are not yet
clear-cut.
This is where wholesale interconnect service providers such as BICS could seize an opportunity by
enabling device security, roaming and interconnection within private networks, particularly where
a presence is needed across countries, traversing different private and public RANs, core and edge
environments. An enterprise is unlikely to want to deal with several different operators, so a provider that
can act as a hub to bring these requirements together could add value.

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Operators deployment — is likely to have a custom set of
needs and applications, each requiring a different
While the market takes shape, we expect the combination of performance attributes such as
prevailing enterprise preference will be to leave capacity, latency and reliability.
it to the experts. So, the next question is: what
sort of solution provider do they see as being “the Partnerships offer the most effective route to
experts?” Is it the operators that also run the public market for operators and have been a fundamental
5G networks, or hyperscale cloud providers like characteristic of the private mobile network market
Amazon, Google and Microsoft, or equipment and to date. In part, this is because of the complexity
solution providers? but also the specificity of the network solutions
required: building connectivity is one thing, but
Enterprises may have an existing relationship with integrating it into an enterprise so that it is a
a mobile network operator. Mobile operators catalyst for transformation is a far more demanding
are undoubtedly connectivity experts, but most challenge, requiring the combined expertise of
do not have a stellar track record as enterprise several partners offering a suite of solutions. But
solution providers; although the concept of private this is also partly because there is a risk of resource-
mobile networks was established early in the LTE intensiveness: the effort required to meet the
era, few operators had particularly sophisticated specific needs of an enterprise outweighing the
offerings. In the 5G era, with demand rising sharply, potential revenue for a single supplier.
mobile operators must find the right balance
between partnering with other players such as As an example of this, Italian operator TIM has
cloud providers, system integrators and network worked with JMA Wireless and Intel to build a
equipment suppliers but ceding value and being smart factory in Verona for engineering company
relegated to the position of a “pipe” utility company. Exor. The factory showcases the benefits of
Industry 4.0 digitalization to manufacturers.
TIM has built a private network based on sub-
Operators must position themselves 6 GHz and 26 GHz 5G spectrum. Exor will
as the “value-added 5G connectivity open a portion of its smart factory floor and 5G
provider”, offering high-performance, laboratory for other companies to explore how
dynamic networks with flexible they can move to Industry 4.0 with wireless
deployment options. But it is important communications.
they also establish their managed With a major equipment supplier like Nokia
services capabilities. offering a direct path to enterprises, operators
need to position themselves effectively to ensure
that they do not miss out on a market opportunity
Operators supporting private 5G network with strong potential, even if it is not necessarily
deployments have an opportunity to offer their their typical theatre of activity. Operators have to
network planning, deployment and management be more agile in identifying appropriate partners
skills to individual companies; small and medium and presenting sophisticated solutions, or revert
businesses in particular may be unwilling to do to a wholesale-only opportunity for network
this for themselves. access and perhaps spectrum usage rights.
Not all operators have developed a set of
software-orientated skills to support enterprises
as they embark on their digital transformation
journeys. Indeed, many enterprises are further
ahead than telecom operators, and some
operators may find it hard to be seen as credible
in this segment. Given the complex and specific
requirements of different enterprise environments,
it would be unrealistic to expect them to be able to
deliver end-to-end solutions.
To effectively tap into these opportunities,
operators need to build vertical market capabilities
or partner with companies with sector-specific
knowledge. Each sector — indeed, each

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Equipment suppliers Typically, larger integrated suppliers remain open
to partnerships with operators, but are also actively
However, there is merit to the notion that an building their own channels to address different
integrated, end-to-end approach, working with industry sectors, typically focussing on a selected
a single provider such as a network equipment few. For instance, Nokia is currently targeting four
provider with managed service capabilities, could sectors it deems the most immediately promising:
form a more attractive offer for an enterprise. energy, manufacturing, the public sector and
Ericsson and Nokia are positioned to cover both transportation. For others, the focus will vary. For
bases in terms of go-to-market approaches. smaller solution providers, the best and often only
For network equipment vendors, the private 5G route to market is through partnerships.
prize is a much-expanded market into which to For example, US radio equipment supplier Airspan
sell mobile network equipment, and with it, other Networks has announced an alliance with Cocus,
services. The “big three” of Ericsson, Huawei a German IT solution provider, system integrator
and Nokia all reported healthy revenue growth and mobile solution expert. The partnership will
in their enterprise business units in their most offer enterprises end-to-end private 5G systems,
recent quarterly financial reports and have placed including help with local spectrum licence
increased emphasis on enterprise-focussed 5G in applications, network planning and construction,
their research and development, and partnership as well as management of 5G campus networks.
and customer-related announcements. In
addition, other companies, including Samsung, It is not typical that mobile operators are viewed
Mavenir and JMA Wireless and others, are up by enterprises as the preferred partner for their
and coming in this market, with portfolios of digital transformation, and so network equipment
enterprise-focussed virtualized RAN solutions. suppliers have an opportunity to position
themselves as lead partners to enterprises seeking
Although the revenue per site for enterprise private 5G networks. This can be a challenge,
mobile is typically lower than for the public as those suppliers do not have the same brand
network, and any single-location private network recognition that they enjoy in operator markets.
might not need much more than a single 5G Solutions providers with more of an enterprise
base station, a nationwide private network would heritage have an advantage here. Examples
require many more. This means the worldwide include business computing providers such as
market opportunity for private mobile networks IBM and enterprise network equipment providers
will eventually aggregate to millions of 5G base such as Cisco.
station deployments, with additional revenue
opportunities from service and support. Identifying partners they can work with remains
a challenge for service providers and suppliers.
Network equipment suppliers, as well as other, All need to acquire sector-specific expertise in
typically software-based, technology solution each vertical market they want to address, to help
providers, need to determine when to sell directly them understand its specific needs. This could be
to enterprises or to partner with mobile operators, an IT systems company or a system integrator,
or other players, as part of a “solution plus service” for example, but without such partners to help
offering. For example, Nokia noted to CCS Insight them speak the language of enterprises, it will be
that 41% of its current private network customers difficult for traditionally telco-orientated players
came from direct sales channels, and the other to make progress.
59% was from indirect channels through system
integrators or other providers. Cloud service providers
Cloud providers such as Amazon, Google and
Microsoft are well-positioned to take a leading role
in delivering private 5G network solutions. Through
The worldwide market opportunity for their business services operations — Amazon Web
private mobile networks will eventually Services (AWS), Google Cloud and Microsoft Azure
aggregate to millions of 5G base station — they bring scale, infrastructure, edge computing
deployments, with additional revenue and cloud-based capabilities to a market that is
opportunities from service and support. really just an extension of their existing presence as
trusted providers for enterprises in their transition
to cloud-native strategies.

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Open source
In March 2021, the Facebook-backed Telecom
Infra Project, which promotes open-source mobile
technology, started a new unit to support Open
RAN-based private 5G networks. Open-source
network solutions could prove to be something of a
wild card in the private network market.
If an enterprise can, in effect, download a 5G core
network onto its own servers (and this is already
possible), does this make it possible to start deploying
some sort of do-it-yourself private network?
Arguably, some of the previous barriers to entry
evaporate. This approach could increase complexity,
but it does throw up interesting scenarios for the
industry to grapple with. There is also a healthy
ecosystem in the open-source community targeting
uses for private mobile networks.

Regulators
National telecom industry regulators have a role
to play too: they need to decide how much 5G
spectrum to make available to enterprises for private
networks, and whether to distribute spectrum
directly to enterprises through a bidding process,
for use in standalone private network deployments
or to allocate it through mobile operators, with
obligations regarding how and where it is used. As
well as deciding which frequency bands to use for
enterprise 5G, regulators must also consider the
criteria they apply when awarding spectrum.

Partnerships
As more 5G private networks are deployed,
successful deployment templates will emerge,
sector-specific experience will increase and new
vertical markets will look to employ proven models
for 5G within private networks. The market overall
will mature: market positioning and pricing models
for equipment and services will evolve, so the
solutions value chain will evolve too.
One thing is clear: partnerships will continue to
be valuable. We expect the regular cadence of
partnership announcements to continue, perhaps
with an increasingly specific focus on vertical sector
solutions, or targeted applications of the technology.
An ecosystem based on “co-opetition” strategies
has emerged. This makes sense, given that no
single player can do everything and still successfully
address the myriad of possible customer
engagements in this market. We will watch with
interest the commercial dynamics of “frenemies”
working together to address enterprise private
network needs, but our initial view is that it will grow
into a huge addressable market. Surely there is
enough pie for everyone?
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Market positioning examples
The solutions ecosystem for private 5G mobile networks includes operators, cloud providers, equipment and
software suppliers, IT system integrators and managed service providers. Many of these are investing heavily
to position themselves and build new revenue.

Operators
The positioning of offers by mobile operators range from “private 5G in a box” or “private 5G in a box, with
mobile edge computing” to a fully managed private mobile network-as-a-service approach. But to continue
pushing toward turnkey, integrated, pre-validated offerings, operators need to lean on relationships with
specialist partners along the value chain, many of which are high-profile suppliers in their own right.
Operators have signed agreements with IT and networking providers, such as SK Telecom with Dell, and
with hyperscalers, such as Verizon partnering with AWS, and AT&T with Microsoft Azure, and also with
virtualization and server companies such as Red Hat, Hewlett Packard Enterprise and VMware. Such
alliances are vital because when an operator or multiple operators are involved, deployment models can
get complicated and there is much to be resolved — for instance, whether to use single or multiple SIMs or
e-SIMs, whether roaming is involved, who handles subscriber management and where it is hosted, whether
spectrum is licensed, unlicensed or shared, how to configure device policies, and more.

Vodafone
Vodafone’s positioning for the private mobile network market revolves around offering a single source
for 5G (or SD-WAN between sites), edge computing, network and data security and cloud services,
with an end-to-end management plane for visibility across the private network. Cloud capabilities
are delivered in conjunction with AWS, Microsoft Azure, IBM and SAP, but Vodafone can add other
solutions from industry partners as required. Vodafone uses dedicated and hybrid deployment models,
combined with multi-access edge computing either as a dedicated model, located on the enterprise’s
premises or through its own Vodafone data centres, in a distributed model.
To date it has primarily focussed on the manufacturing, utilities, healthcare, mining and transport and
logistics sectors. Marc Sauter, Vodafone’s head of mobile private networks, stated in a briefing with
CCS Insight that private networks combined with multi-access edge computing form “arguably the
space in which an operator can transform itself from a telecom provider to being an IT, technology
and communications provider”.

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Cloud service providers
Private mobile networks with edge computing are a potentially powerful combination for addressing various
enterprise digital transformation challenges, some of which organizations will already have been working
with cloud providers to tackle. Cloud providers’ strategies for exploiting opportunity in the private network
market vary.

AWS
AWS has touted its integration with private mobile networks; Microsoft has acquired mobile core
provider Affirmed Networks and mobile communications stack company Metaswitch Networks to
offer integrated private mobile network solutions. Although collaboration between cloud providers
and operators are an important route to this market, cloud providers also take a direct path into the
enterprise private network market, often building on existing relationships.
AWS’ strategy is based on several elements:
• AWS Local Zones place computing resources, storage, databases and other services close
to industry and IT centres and can host network workloads such as mobile packet core and
monitoring systems.
• AWS Outposts are fully managed AWS racks with services, APIs, and tools that operators can install
in their own sites or enterprise locations for seamless operation across the end-to-end network.
AWS Outposts can be used for traffic aggregation and hosting data plane components like the user
plane function of the 5G core, or the centralized unit of the RAN.
• AWS Wavelength is a mobile edge computing service. Wavelength Zones are AWS infrastructure
deployments that embed AWS computing and storage services in telco data centres integrated
with 5G networks, so that traffic from 5G devices can reach application servers running in
Wavelength Zones without leaving the mobile network, which helps achieve very low latencies.
In April 2021, AWS announced an extension of its relationship with Verizon to provide private multi-
access edge computing for enterprises, integrating Verizon’s 5G Edge MEC platform with AWS
Outposts, to offer a managed service that offers AWS infrastructure, APIs and tools to virtually any data
centre, co-location space or on-premises facility.

Ericsson
Ericsson offers LTE and standalone 5G connectivity, primarily targeting enterprises in manufacturing,
mining and process industries, offshore and power utilities, as well as ports and airports. Ericsson’s
private 5G solution set is based on its LTE/5G radio and dual-mode core technology — pre-integrated
for deployment — cloud-based network management and orchestration software. It positions itself as
flexible, scalable, highly secure, and high-performing, backed by its service-level agreements.
It has partner relationships with system integrators Thales and Ambra Solutions, which it trains on its
5G equipment, although neither is a reseller, as well as with several cloud providers such as Google
Cloud. It predominantly sells to enterprises through operators; about 80% to 85% of its enterprise sales
are through this channel, another 10% through system integrators and the rest are direct.

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Network equipment providers Intel
The “big three” have well-developed equipment,
solution and service portfolios for this market, Intel’s portfolio includes RAN reference
with Nokia taking both direct-to-enterprise and architecture like its FlexRAN platform, a
operator-partner approaches, while Ericsson and virtualized reference implementation of an
Huawei are predominantly focussed on operator LTE Advanced RAN with a modular Evolved
and cloud provider channels. In addition, other Node B software stack that runs on white box
established suppliers such as NEC, Fujitsu and hardware, turnkey edge solutions like Intel
Samsung compete for market share, as well Smart Edge, a set of common APIs for CPUs,
as other entrants including Accelleran, Airspan accelerators such as OpenVINO and Open
Networks, Altiostar, Federated Wireless, JMA Network Edge Services Software (OpenNESS),
Wireless, Mavenir and Parallel Wireless, among an open-source cloud-native software
others. toolkit for edge platforms. Although neither
is targeted exclusively at private mobile
Suppliers embracing disaggregation, virtualization
networks, FlexRAN and OpenNESS combine
and Open RAN are using the private mobile
to power edge-hosted applications.
network as a route to market with smaller
deployments and potentially shorter sales cycles. Intel has other applicable products, including
They can use this route to bring innovations, Intel Atom and Xeon Scalable processors,
from open-source options for the mobile core and its Edge Controls and Edge Insights for
to integrated edge computing stacks with pre- Industrial software.
loaded mobile cores. In this respect, the private
network market will see many of the same As an example of its equipment supplier
technology trends coming into play as the partnerships, Intel has signed an agreement
broader 5G market landscape. with Federated Wireless, a network
infrastructure managed service provider
Semiconductor suppliers of CBRS private networks. As part of the
collaboration, Federated Wireless uses
There are numerous silicon-based solutions for
Intel Smart Edge in private network trials
the private mobile network market, including
in the education sector in the US. Intel is
base-station-on-a-chip, integrated systems-
also involved in several projects to connect
on-chip for Open RAN, together with respective
airports and seaports around the world, as
software stacks from suppliers such as AMD’s
well as manufacturing and other greenfield
Xilinx business, Broadcom, Intel, Marvell
installations.
Technology, Qorvo, Qualcomm and Samsung.

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Outlook
Awareness among enterprises of the potential of 5G as a communications technology is rising, and with
it the possible value of a private mobile network as a transformational platform for operational processes,
services, new revenue streams and customer experiences.

It is hard to imagine an industry sector that could 5G is not just for connectivity anymore. It is a
not reap benefits from some form of private 5G foundation of digital transformation, like a utility,
network deployment. This means that the private 5G powering a range of new digital processes, such as:
network market, already growing, has huge promise.
• The integration or convergence of IT systems
Nokia believes there are more than 14.5 million with operational systems
potential industrial sites worldwide that could deploy
a private mobile network, including 10 million
• Management of multiple network segments
through a single screen
factories.
• An enhanced experience for employees in work
Although clearly not all will have their own
locations and on the move
private network, the potential is significant before
counting in other industries like healthcare, retail, • More efficient and sustainable energy usage
transportation and entertainment. Understandably, • Greater optimization of workspaces and costs
it is the focus of much attention.
• Safer and more-secure working environments
Addressing the complex, often niche needs of each
individual enterprise prospect is challenging, and to For 5G to be perceived as the best technology
that end, the solutions ecosystem is still maturing, for private mobile networks and earn its place
with some way to go. As discussed earlier, the in the market, solution providers across the
exacting requirements for the connectivity piece value chain need to articulate its value clearly,
alone are far from trivial. The 5G industrial devices ideally reinforced by early success stories and
ecosystem has some catching up to do. Use cases positive enterprise experiences. We expect
are still being defined. 5G itself is still evolving. winning strategies to be those that take a flexible,
modular approach to solutions, allowing for
At the same time, some requirements can be transformation to be introduced in line with the
fulfilled with mature LTE solutions or alternative enterprise’s long-term plans.
technologies such as mesh networks like Wirepas,
or Wi-Fi 6 (and later, Wi-Fi 7), so it is important to Aside from the technological aspects, the
find a balance between today’s need and future commercial environment is fragmented. Mobile
expectations. This must be done while factoring in network operators, cloud service providers,
the additional time needed for IT departments to equipment and software suppliers, IT networking
perform due diligence on data security — this alone and system integrators alike have to segment and
can add many months to a deployment schedule. target the market, either by selected verticals or
types of opportunity they want to address, and
focus their go-to-market strategies accordingly.

We expect winning strategies to be

those that take a flexible, modular
approach to solutions, allowing for
transformation to be introduced in line
with the enterprise’s long-term plans.

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 W W W.C C S I N S I G H T.C O M

CONTACT US
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