Private 5G injects innovation, improving wireless overall: Mun

Kyung Mun

Innovation is mercurial. It is hard to define and measure. Also, it is not always clear how it happens. 

Sometimes, innovation can happen through continuous improvements (e.g., improving spectral efficiency from one "G" to the next). Or, it can happen through reframing a problem (e.g., buying music by individual songs on iPod vs. buying an album on a CD). 

Arguably, the iPod facilitated music streaming and evolved to incorporate mobile phone functions onto the iPhone as we know it today. As an engineer at heart, it is hard for me to deal with a mercurial concept like innovation without clearly knowing what it is and how to detect it. Simplistically, I categorize innovation into two buckets – technology innovation and business model innovation. I think that technology innovations often lead to business model innovations – though they are not necessarily interlinked. 

In the mobile industry, three core technology innovations are happening today:

  • Virtualization – separating hardware and software components (from core to RAN)
  • Open RAN – disaggregating RAN functions and opening up the interfaces
  • Edge computing – enabling cloud computing at the “edge.”

A key theme running throughout the above megatrends is the modularization of connectivity and computing functions. Keeping things modular offers the opportunity and flexibility to deploy networks in a new way. Moreover, this network and service agility enable new players to provide a fresh perspective on how a network should be deployed and offered to end customers. This is playing out in the private LTE and 5G marketplace. Enterprises of various sizes and vertical markets are looking to tap into the 5G promises of reliable low-latency links.

When we first wrote about the prospect of private LTE and 5G networks two years ago, the mobile industry, primarily grounded in consumer mobile broadband, was just ramping up 5G network deployments. 

Today, the industry is well on its way – making significant network investments, deploying large swaths of mid and high-band spectrum and massive MIMO radios to maximize RAN efficiency. In parallel to the network operators’ investment in “public” cellular networks, enterprises are looking to tap into 5G innovations for their private wireless network needs. Here, we see the following business models to tap into the flexibility offered by the network technology innovations as described above:

  1. Enterprise-direct – an enterprise fully owns and manages a standalone private wireless network on-premise;
  2. Hybrid managed service – a specific portion of a private wireless network is owned and operated (e.g., RAN) while others are outsourced (e.g., core, applications); and,
  3. Private wireless-as-a-service – an enterprise adopts a full cloud model and attains private wireless connectivity “as a service” from a third-party provider. (Variations on this theme can include locally managed radios, or network slicing)

As published in our latest Private LTE and 5G market report, the business models' growth trajectory differs by vertical market. Some industries like utilities prefer the Enterprise-direct model as they are accustomed to making fully capitalized network investments that last a couple of decades. Meanwhile, smaller enterprises may be looking to the Hybrid managed or Private wireless-as-a-service model to alleviate upfront costs.


Mobile Experts graph

The technology innovations to disaggregate network functions allow an opportunity for new players to offer “best-of-breed” (or “best price for performance”) to a wide array of vertical market opportunities. Diversity of suppliers, use cases, and customers is ultimately good for the industry and technology development as a whole. More participants can test out the limits of technology ideas and product solutions. Also, having more “judges” to determine what works and what doesn’t is ultimately good for the industry. The private wireless network requirements differ widely across the different industries and markets, and no singular network architecture or business model will suit everyone.

I don’t know who said it first, but the maxim that “innovation happens at the edge” certainly rings true from my past experiences. Creating more opportunities for ideas to succeed or fail is ultimately good, in my view. The increasing number of private LTE and 5G projects spanning multiple vertical sectors and regions around the world is indeed very encouraging. We believe this will ultimately benefit the overall mobile industry primarily dominated by giant operators and a handful of infrastructure vendors. 

Over the next ten years, we expect Private 5G networks to lead innovation in many ways, including virtualization and the  use of “openness” for simple and scalable software. The integration of private 5G and edge computing is likely to be tighter and more effective than in legacy telecom networks. In time, we can expect the private 5G world to bring these key innovations back into public 5G networks, creating benefits for everyone.

Kyung Mun is a senior analyst at Mobile Experts LLC, a network of market and technology experts that provides market analysis on the mobile infrastructure and mobile handset markets. 

"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.