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5G and LTE private networks could account for a fifth of all mobile network investment by 2030, says report by research firm SNS.
With global network capex in full retreat, private networks have become one of mobile's few growth hotspots.
Research firm SNS Telecom & IT says the sector is on track for annual growth of 20% and likely total spending of $6 billion by end-2027.
Nearly 60% of this investment – worth around $3.5 billion over the next three years – will be tipped into standalone 5G, making it the predominant wireless network tech for digitization and factory automation, a new report concludes.
The result of this growth spurt will likely be the transformation of private networks "into an almost parallel equipment ecosystem" by the late 2020s. By 2030, private networks could account for as much as a fifth of all mobile network infrastructure spending.
SNS, which says it is drawing on its database of 7,300 private LTE/5G networks in 130 countries, says one of the biggest drivers is the quantifiable performance advantages of 5G over other network technologies.
This is especially true of standalone 5G core, which, although deployed by less than a tenth of the world's mobile operators, delivers performance and efficiency advantages that have led to much greater success in the small but burgeoning private cellular segment.
Alternative to DAS
Spectrum liberalization has also been a big factor. Dozens of regulators worldwide have released or are in the process of releasing spectrum for private networks: for example, CBRS in the US; 26GHz in Spain; the 4.6–4.9GHz and 28GHz bands in Japan; and private limited service licenses in Brazil.
Private networks have also emerged as a cost-effective alternative to DAS in delivering neutral-host coverage in enterprise and public venues, SNS says.
With 5G and 4G networks now deployed in a vast number of verticals – from factories and mines to power plants and offshore wind farms – some meaningful data on productivity and cost benefits can be extracted.
According to SNS, productivity and efficiency gains for manufacturing and logistics processes are "in the range of 20% to 90%," with cost savings of up to 40% and an improvement of up to 80% in worker safety and accident reduction.
So where does this leave mobile operators? In part it depends on local regulations and the degree of market access granted to unlicensed operators and spectrum.
But there's a nice opportunity for telcos that have built out systems integration (SI) businesses, like NTT Data and Verizon, SNS says. It estimates these SI units may be able to capture as much as 35% to 40% of the market.
NTT Data counts BMW, Cologne Bonn Airport, Schneider Electric and Las Vegas city among its clients. Verizon Business' managed private wireless customers include all the US NFL stadiums, Audi's Neustadt test track and Southampton port in the UK.
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