Offering layers of services on top of a private network foundation helps create an exciting revenue case for Verizon Business, according to revenue chief Sampath Sowmyanarayan.
Kicking off the FierceWireless Private Wireless Networks Summit on Monday, Sowmyanarayan pegged the total addressable market (TAM) for private wireless at around $7 billion to $8 billion by 2025.
Verizon distinguishes between a private wireless network product and mobile edge compute (MEC) offerings, he noted, but likes it when both come together. That’s when “the full power of 5G” can be exploited, he said, with features like low power usage and high device density. Verizon has ambitions for both public and private MEC, in partnerships with Microsoft and AWS.
Asked about moving beyond just providing connectivity and driving new revenue streams with private wireless, he pointed to recurring services such as security, managed services, and running custom applications or IoT.
“The private network piece, very few can do it as well as us, but it’s the layers of services on top that creates a pretty compelling revenue case for us,” Sowmyanarayan said. “But more importantly use-cases for the customer.”
RELATED: Verizon bolsters private 5G MEC with AWS
He acknowledged that typically with large customers there’s also a significant upfront piece to get the private network up and running. The private network is essentially a scaled down version of the macro network consisting of core, radio, and other elements at a local location. But afterwards the recurring services are attractive for both Verizon and private wireless customers who can then keep attention on their main business functions.
“They are able to look to a large partner to offload some of the complex work so they can focus on what their core is,” Sowmyanarayan noted, pointing to mines as an example.
Verizon also has a private wireless offering for international customers, which leverages Nokia products. The carrier recently signed its first European 5G private wireless deal with Associated British Ports (ABP) for the Port of Southampton in the U.K. Sowmyanarayan said the carrier is very excited about the ABP deal and categorized it as "a sign for things to come" for Verizon.
RELATED: Verizon snags private 5G network deal with U.K. port operator
Verizon has a long experience running RF, early 5G and MEC deployments, as well as a deep international presence serving customers in nearly 120 countries already, he noted. And enterprise customers have their own international markets to address.
RELATED: Verizon expands IoT coverage to 170 countries
“In global enterprise, almost 60% of our customers have an international segment in business today,” he said.
Variety of use-cases
While the product for private wireless is somewhat similar, the use cases can be very different, Sowmyanarayan said, spanning users such as mining companies, trading floors, ports and more.
“It requires a different sales motion from our teams. We are quite excited about that and I think that’s where a lot of the work is happening.”
Verizon will start some customers off with 4G LTE and upgrade to 5G, but Sowmyanarayan said most of the use cases and inquiries they’ve been getting are for 5G networks.
Reasons include speed, but notably device density with an increasing number of 5G-capable devices and low latency, the latter particularly for manufacturing use-cases.
RELATED: LTE dominates private networks, but 5G is coming: Special Report
While large enterprises are interested in private networks, Verizon also is working to drive down costs for small and medium-sized businesses interested in dedicated on-prem cellular networks. According to Sowmyanarayan, that’s largely focused on standardizing products in close collaboration with Nokia and Ericsson, virtualization and standard design templates.
“A combination of that is what’s going to help us get price points to a good place,” he noted.
Verizon previously pegged 2022 as the year revenues from 5G applications will start to scale. He said that’s on track, with deployments in 2021 and applications starting to come in the second half of 2022 for a combination of revenues from private MEC and public MEC, alongside one or two applications.
“I think things are moving a little faster than what we thought coming in in the beginning of this year, but that’s a good problem for us to have,” Sowmyanarayan said.