Private 5G Market: Bloom or Bust? – CXOToday.com

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Ever since 5G technology hit the markets, use cases for both public and private networks have made headlines, to an extent that industry was lulled into believing that it’s the best thing to have happened to humanity since the invention of sliced bread. However, today, the opportunities for private 5G are huge, but the demand is in slow bloom. 

In fact, at a recent webinar on “Private 5G Networks – Hype or Reality” (you can watch it here for free), speakers were at pains to explain that the technology itself wasn’t to blame for adoption challenges, if any. In fact, some of them actually seemed to think that it was an overdose of technology that was causing the issue. 

How much smart technology is too much?

Amidst a consensus that the private 5G market was indeed primed to attract more usage and smarter use-cases, the delegates and speakers at the webinar suggested that some of the issues around adoption related to too much technology being bundled into the offerings by telecom companies. 

Peter Cappiello, CEO of Future Technologies Venture, a company that provides systems for 5G network, said his company’s open pipeline grew from $40 million a year ago to $180 million. And this growth wasn’t about new customer acquisition but existing customers going beyond single-proof points to scaling from five to fifteen sites and 20 sites. 

However, he also noted that while the 5G standards had opened up new private network opportunities, all of these standards that a 5G network can support does not necessarily need to be ported to the private 5G space. “I am referring to the push towards an open 5G core, which I feel is gimmicky,” Cappiello says. 

Embedded 5G core can potentially save billions 

The irony of the situation is that the heightened opportunity was actually being buffeted by the advanced automation capabilities supported by the 5G standards, given the 3GPP specs being baked into the technology. This aims to bring usage of licensed spectrum to support autonomous factories – a fact recently highlighted by Tesla via its German Giga factory. 

In fact, even Vodafone recently highlighted the low-latency benefits of having 3GPP embedded into 5G standalone specifications. The telecom company claimed in a note that such a system could potentially result in $10 billion a year productivity savings for small and medium companies in the United Kingdom via support to low-latency services. 

Several mobile networks have taken the cue and struck deals to provide licensed spectrum based private 5G services such as the one Verizon did for Cummins at a New York plant spread over a million square feet of industrial space and an equal amount of outdoor space. It could support 1,500 onsite employees making 500 heavy-duty truck engines a day. 

Another point that came up at the seminar related to the criticality of the latency capabilities around the worker safety aspect. Vijay Venkateswaran, CEO at Viventum noted that this capability can also power a use-case for private networks using licensed spectrum. He cited the example of installing a private network for a mining facility. Initial investments can translate into risk reduction given the high cost of compensation to mining workers. 

The challenge lies at the infrastructure level

However, Cappiello believes that large industrial customers would probably have either Cisco or Aruba as their infrastructure partner or a blend of vendors providing the critical bits. These providers need not be well-versed with 3GPP technology knowledge at enterprise level, which will come in the way of them separating network elements. “It is hard enough to make it work in a matched pair where you’ve a core vendor and a radio vendor,” he said.

Which is why some of the speakers supported a simplified technology package using a single source for equipment or aligning with an established network operator who can slice up the technology components. Because, at the end of the day, one needs the core functionality to work and the support functionality to support. And open cores could potentially remove some of the real value that can be generated by enterprises. 

Which is why the adoption of private 5G networks may well take some more time. And it has nothing to do with the quality of engineering available, was the consensus at the webinar. 

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