With last August’s Citizens Broadband Radio Spectrum (CBRS) Priority Access License (PAL) auction in the rearview window, mobile operators need to move quickly if they want to capture what many analysts estimate could be a multi-billion-dollar opportunity — building and managing private wireless networks for enterprises and other entities including utilities and universities.
Although building private wireless networks isn’t a new phenomenon, the recent CBRS PAL auction made shared spectrum available to new types of entrants, including enterprises. This means that companies can now own and operate a private wireless network using licensed spectrum without worrying about any performance issues or interference, which are just a few of the concerns most firms have about using Wi-Fi for their private campus networks. GlobalData analyst Kathryn Weldon said in a recent research note that she expects private wireless networks to at least partially displace Wi-Fi networks and wireline connectivity because they offer more consistent signal strength, security, higher speeds and lower latency.
AT&T and Verizon stepping up
AT&T and Verizon have already made some steps toward capturing a piece of the private network market. Last October AT&T announced that it was working with both Ericsson and Nokia to provide private network capabilities. Details about AT&T’s private network offering are a little vague. The company said that it will use either Ericsson’s cellular core and access network or Nokia’s private wireless platform and CBRS spectrum. AT&T touts its edge computing platform as a way for enterprises to reduce latency and add security, making it possible to process data locally on the private network rather than routing it over public networks.
Verizon, meanwhile, took a slightly different tactic and in December announced its On Site LTE private network platform. When asked, Verizon said it was working with multiple vendors on the initiative but declined to provide specifics. Verizon also touted its platform as making it easier and faster for enterprise to deploy a private network and said that its platform includes a customer dashboard, quality of service (QOS) and network management services.
Shared spectrum is the driver
Shared spectrum, such as that found in the CBRS 3.5 GHz to 3.7 GHz band, is behind this new growing emphasis on private networks. According to Kurt Schaubach, CTO of Federated Wireless, shared spectrum broadens the market, making it possible for all types of companies to get access to spectrum and become a part of the LTE and 5G network ecosystem. “This drives adoption within the enterprise segment because they can now operate the network on their own,” Schaubach said.
According to consulting firm Arthur D. Little, the global market for private networks using LTE or 5G could top $70 billion by 2025. But wireless operators aren’t the only entities that could benefit from the private network boom. Traditional mobile infrastructure vendors such as Nokia, Ericsson and Huawei also stand to gain, and some, such as Nokia, are selling directly to enterprises. Nokia announced last November that it has more than 220 enterprise customers with private wireless networks globally. In addition, IT companies such as Cisco and HPE, which have strong ties with enterprises and are accustomed to building campus networks, are angling for a piece of this market.
Other potential beneficiaries include cable companies and wireline providers, both of which were awarded licenses in last year’s CBRS PAL auction. Comcast, Charter Communications and Cox won hundreds of CBRS licenses as did wireline telco Windstream. While some wireless experts expect the cable companies will use their CBRS licenses to build wireless networks and offload their wireless customers’ traffic onto their own networks instead of paying for use of their MVNO partner’s network, others believe it is possible the cable companies will use some of these CBRS licenses for private networks. “Many of the CBRS license winners will augment existing coverage or use the spectrum to provide fixed wireless broadband for consumers,” said GlobalData’s Weldon. “But others seek to use it to enhance their enterprise capabilities, in particular providing wireless private networks.”
Federated’s Schaubach said that his company doesn’t view mobile operators, cable companies or IT firm as competitors because the more users of CBRS spectrum, the better it is for Federated. The company makes shared spectrum controllers that enable multiple companies to use the same spectrum band. “Ultimately, we want the market to be as big as possible,” he said.
Schaubach added that he believes there will also be a strong secondary market for PAL licenses in which license-holders will lease spectrum licenses to other users for enterprise applications. He also said that he believes that wireless operators will use their CBRS PAL licenses or use CBRS general authorized access (GAA) licenses to provide spectrum for enterprise private networks rather than using their existing spectrum that is dedicated to their macro networks. “It’s difficult for them to find spectrum to dedicate to deployment with an enterprise,” he said. “They would have to do lots of network planning to carve out spectrum and make it work without any interference.”
But the real sweet spot for mobile operators, in terms of generating money from private networks, is in the network management service that they can offer and the custom applications that they can deliver. Verizon hinted at this in its announcement of its On Site LTE platform, noting that enterprise customers can focus on their business while Verizon manages their private network.
Although Verizon’s private network platform seems focused on LTE, the company does mention it evolving to 5G. Schaubach said that Federated is currently seeing some 5G private wireless network trials but they do not expect commercial deployments until third or fourth quarter of this year when the next versions of 5G-enabled devices are released.
Enterprises that want their own private network are likely to need help. Most corporate IT departments aren’t well-versed in running and maintaining wireless networks. Wireless operators that want a piece of this potentially lucrative pie should act quickly and better define their private networking products and platforms before others step in and take the lead.