The mobile industry is synonymous with BIG. Large-scale networks handle hundreds of millions of users with annual capital expenditures in the tens of billions of dollars (not to mention the billions of dollars in spectrum licenses that operators spend from time to time). That’s the scale of the numbers that describe the industry. LTE is simply too expensive for enterprises to consider for their private wireless networks. Or is it? In the midst of large-scale networks costing billions, we are seeing a movement toward downsizing large, operator-focused LTE solutions to “bite-size” private LTE and 5G networks for vertical markets.
This movement toward leveraging LTE and 5G in private wireless networks is aided by several infrastructure technology trends that have been in play for several years. On the radio infrastructure front, the network densification trend has pushed beyond macrocells to a wide variety of small cells with different fronthaul options and power levels.
In fact, operators continue to push the boundary of RAN disintermediation with Open RAN, in search of the operator’s low-cost nirvana of mix-and-match discrete radio functions. Also, the innovations in core networking where EPC core functions can be housed on commercial off-the-shelf servers has enabled tremendous flexibility for enterprises to deploy private LTE networks. Core functions along with enterprise applications can be housed in edge computing regional data centers or at enterprise premises depending on application requirements. The general trends toward software-defined infrastructure and virtualization of network functions—extending from core to RAN—are enabling “bite-sized” LTE solutions that can be more palatable for small-scale private enterprise networks.
Along with the changes in the infrastructure front, spectrum access for private LTE and 5G is opening up around the globe. In addition to the ongoing efforts to commercialize the CBRS band in the United States, the U.K. regulator is currently evaluating an innovative (or controversial, depending on your point of view) spectrum sharing framework spanning multiple bands. Meanwhile, the German regulator is evaluating the 3.7-3.8 GHz band for “localized” private 5G networks for industrial use. Besides these regulatory activities, the use of unlicensed and shared spectrum for LTE and 5G services is another attractive possibility.
New enterprise markets are starting to come into focus as our “bite-sized” virtual networks become easier to use. Addressing these new market opportunities won’t be a slam-dunk; alternative technology solutions and big market players are well entrenched there.
In our recent study on private LTE and 5G, we see that many industrial markets are transitioning to LTE as they look to harness the economic benefits of deterministic wireless networks to facilitate the digital transformation of their operations. We see “bite-size” private LTE and 5G networks expanding the market opportunity for infrastructure and IoT device manufacturers. Some vertical markets are entrenched with private wireless solutions that are decades old. Others are served by industrial channel partnerships that have been in place over many years. And these industrial markets don’t move quickly, as product life cycles are measured in decades, not years.
Despite these market challenges, many industrial players are excited about the deterministic and low-latency capabilities of 5G. While the core consumer mobile broadband market will be the primary focus for the industry for the foreseeable future, the private LTE and 5G market opportunities offer an exciting area to prove out the value of 5G. The collaboration of vendors, operators, enterprises, and regulators will surely be needed—along with patience.
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. Over the course of his 20+ years in the wireless and cable industries in a dynamic range of roles from engineer to product manager and technology strategist, Mun has contributed to the advancement of mobile communication while working at leading companies in the mobile value chain including Motorola, Texas Instruments, Alcatel-Lucent and a few startups in between. He holds undergraduate and graduate degrees in electrical engineering from the University of Texas at Austin and Georgia Tech, and studied finance and strategy at Southern Methodist University.
"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.