Manufacturers build their own 5G networks without telco vendors

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Both Foxconn and Siemens are building their own private wireless network equipment. (Getty Images)

In the manufacturing sector, the value of private cellular networks is becoming so clear that two of the world's largest manufacturers have taken steps to build their own wireless network equipment. Foxconn and Siemens are both in the process of developing proprietary 5G network solutions.

Foxconn, the giant contract manufacturer best-known in the U.S. as a maker of iPhones, first announced its own LTE core more than a year ago. According to Patrick Filkins, senior research analyst at IDC, Foxconn was already making many network hardware components, and the company has the expertise in-house to build its own core network.

"They're not working with a vendor; they're just making it themselves," said Filkins. He doesn't expect Foxconn to sell network hardware or services to third parties, but as a contract manufacturer Foxconn is well-positioned to offer private networks as a competitive differentiator at its facilities. The company is already doing this at a factory in Wisconsin, where it installed its own evolved packet core alongside Airspan small cells.

Late last year, Foxconn showcased its own 5G small cells at IEEE Globecom. The company said the radio is meant for indoor use and is based on an open RAN design.

Foxconn has recently announced a joint venture with Yageo Group to produce small integrated circuits, further signaling that it intends to grow its business by providing access to resources its customers may need, from chips to 5G.

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Siemens could take its proprietary 5G a step further by actually selling it to other manufacturers, according to Filkins. The company has a history in telecom equipment manufacturing and is now building 5G networks at its facilities. Siemens stated in a February 2021 press release that it is "currently creating its own private 5G infrastructures in its plants in Amberg and Karlsruhe. In these systems, Siemens is relying exclusively on its own independently developed products and solutions."

"I could see them taking private 5G and selling it to other manufacturers," Filkins said.

For wireless carriers and their vendors, building private networks for manufacturers is an important part of the 5G opportunity. As long as carriers control the spectrum companies need to operate their networks, they will have a key role to play in private 5G. But when governments make spectrum available without a license, or license it to companies for private use, manufacturers that can offer 5G network services will have a compelling offer.