At last, the 5G private network market is moving forward

In recent years, 4G and 5G private networks have enabled companies in highly competitive sectors to implement innovation projects such as ‘massive IoT’ (large-scale Internet of Things), virtual and augmented reality, autonomous vehicles, digital twins and Industry 4.0. According to the Global mobile Suppliers Association (GSA), 77 countries and 1,384 companies will have deployed at least one private network by December 2023. Manufacturing, education and mining are the three most advanced sectors.

The real impact of private 5G networks ‘is becoming increasingly visible, with many practical and tangible benefits’. SNS Telecom’s ‘Private 5G Networks: 2024 – 2030 – Opportunities, Challenges, Strategies & Forecasts’ report predicts that annual investments in private 5G networks for vertical industries will grow at a CAGR of around 42 per cent between 2024 and 2027, reaching almost US$3.5 billion by the end of 2027.

The pace follows that of previous IDC forecasts at the beginning of the decade. Industrial or operations-based use cases spanning multiple verticals (e.g. manufacturing, government, mining) are expected to generate most of the interest and spending needed in private 5G in the short term.

While we expect private LTE to remain the predominant part of the market today, private 5G spending will eventually grow to surpass private LTE spending and drive new spending among verticals that were not interested in taking advantage of cellular networks in the past, especially in industrial markets.

‘Compared to LTE technology, 5G private networks can meet much more demanding performance requirements in terms of throughput, latency, reliability, availability and connection density,’ say the study’s authors. ‘In particular, 5G’s URLLC and mMTC capabilities, along with a future-proof transition path to 6G networks in the 2030s, have positioned it as a viable alternative to physically wired connections for industrial-grade communications between machines, robots and control systems.’

For example, the mining, utilities and transport sectors have deployed private LTE solutions in recent years, albeit to a limited extent. This is partly due to the maturity and widespread deployment of LTE coverage and a more mature device ecosystem. Although 5G represents an evolution for mobile communications in many areas, LTE is expected to remain a viable solution, especially in use cases where LTE devices are readily available and where LTE can meet the organisation’s needs.

In other words, it is expected that many organisations will continue to deploy LTE as a private WAN solution for some time to come. So when planning a private cellular deployment, a converged solution may present the ideal approach, which could include implementing a converged LTE/5G core and multi-RAT radios for backward and forward compatibility. Put another way, adopting an ‘either/or’ approach may result in organisations having to spend more in the long term, especially if there is an interest in deploying LTE and 5G together.

Why 5G?

The reasons for the interest in private 5G are many, but they can be summarised in some important value propositions, according to IDC. These include:

Superior performance compared to LTE

▪ Superior reliability: 5G NR offers ultra-fast connectivity, while LTE, although generally sufficient in many cases, uses older QoS parameters, making it potentially less reliable for ultra-sensitive use cases.

▪ Ultra-low latency: For industrial and time-sensitive use cases, 5G can offer round-trip latency of less than 10 ms, which is essential for emerging time-sensitive and edge-based use cases. When combined with ultra-reliability, 5G can deliver an ultra-reliable, ultra-low latency network.

▪ Ability to address industrial IoT use cases, especially those deployed using edge infrastructure: Combined with time-sensitive networking (TSN), 5G can provide a more deterministic network solution, using 5G as a wireless connectivity bridge.

Future proof for ultra-dense sets of IoT endpoints

▪ Massive IoT and M2M communications. 5G is designed to accommodate ultra-dense, high-capacity sites, making it an ideal solution for a large volume of deployed IoT terminals.

Architectural advantages that expand implementation models

▪ Flexibility of the 5G architecture. Some of the private 5G components can be implemented as cloud-native functions (e.g. SA 5G core), allowing parts of the solution to be hosted in the cloud, at the edge or on site.

▪ 5G network slicing: Although this concept, which includes widespread automation, has been championed by communications service providers, organisations consuming private 5G will also be able to ‘slice’ the network for use cases or applications. However, this will require more planning on the part of organisations, with particular dependence on where and how they implement the core functions of 5G, whether in the cloud, on-premises or in a hybrid cloud model. Deploying one model over another may alter the organisation’s ability to ‘control’ how and where 5G slicing is applied, which is likely to be a ‘must-have’ for many organisations.

▪ In addition, 5G slicing requires device dependencies and is more suited to advanced scenarios. Overall, we expect that applying network slicing as part of a private mobile deployment will require careful analysis on the part of the company.

Potential TCO gains and improved time to market when deploying network infrastructure

▪ Cost advantages for deploying wireless solutions over wired solutions, especially in greenfield builds. Some organisations have justified the initial spend on private LTE and 5G due to the ability to save upfront costs and improve time to market rather than installing new wires, especially indoors.

In short, in general terms, private 5G tries to combine the technological advances of 5G with an improved commercial and business model for organisations too.