Are private networks a viable business for telco operators? That was the topic of a 5G World panel hosted by Omdia's Camille Mendler, chief analyst for enterprise services.
Spoiler alert: Despite significant challenges, all the panelists were bullish on the private network opportunity. Antje Williams, SVP 5G campus networks for Deutsche Telekom, said German manufacturers are enthusiastic about 5G private networks, although they are proceeding cautiously. Catherine Gull, head of business development at Three Enterprise, said Three is growing its private network business as a center of excellence within its various operating companies. Damir Opsenica, CTO of Iskratel, said his company is working with three large industrial companies in Eastern Europe that are currently planning to deploy private networks. (The equipment vendor recently announced a smart factory deployment at its own facility in Slovenia with Telekom Slovenije.) And Khalid Aziz, SVP head of global ventures at Signify, explained why his company (which was formerly Philips Lighting) believes light waves will be a better data transmission medium for private networks than radio waves.
Partnerships were an important theme throughout the discussion, with the panelists noting the importance of their alliances within the industries that they are targeting as potential customers.
"Our biggest bets for private networks are partnering with industry [for] certain aspects of 5G private networks," said Three's Gull.
"We need to work very, very closely together with our customers to find out what they actually want and what they need, and then also with other partners," said DT's Williams. She said telcos are incapable of approaching all the different device manufacturers that serve an industry, and that's an area where partners can be helpful. She said device support is critical in order for 5G private networks to gain traction. "Right now the chipset vendors are getting involved, more involved than ever before," she said. "A lot of the devices we have today in the industrial field are connected over Wi-Fi, with its limitations, and therefore there are a lot of device manufacturers that are interested."
Partnerships are also important as service providers try to understand what their customers value from a network perspective. Signify's Aziz gave an example from the mining industry. He said that since service providers cannot address all the specs related to connectivity for the mining industry, Signify is partnering with companies that specialize in managing SLAs in the mining environment.
Iskratel's Opsenica echoed the idea that SLAs are the most important metrics for private network customers, saying that enterprises are much less concerned with which type of connectivity is used than they are with the SLAs. "The technology aspects are pretty much driven by the use cases," he said.
Mendler said Omdia's research shows that almost half of all private network deals are partnerships, and that just 15% are built and operated solely by a communications service provider. She also said service providers are usually not at the top of the list of companies enterprises want to partner with for private networks. Hyperscale cloud providers and equipment vendors were named more often as preferred partners, although enterprises typically acknowledge the need for a service provider in the mix.
Omdia also found that already 21% of private networks use 5G, while 63% use LTE. The two carrier representatives on the panel both said that it will be a while before 5G catches up. They said 5G private networks are most appropriate for use cases like automation and robotics, and that these typically require 5G standalone core networks and near-symmetrical uplink and downlink.
DT's Williams described a "private network in a box" model that she said could work well for smaller and midsized companies, who may not want to host their own 5G core or acquire their own spectrum. "We do have campus networks also that [are] implemented in our normal public network which also means that we are using virtual functions of the core network part," she explained. "You don't have to build always a new core network up for each and every customer [which] makes the whole thing much more scalable and efficient."
Aziz clearly held the attention of the other panelists when he started explaining Signify's technology, which he said is superior to RAN technology for some use cases. "Light being very specific in the area and peer-to-peer becomes the perfect medium to do high-bandwidth, high-throughput, ultra-low latency," he said. "Where we are focusing is very specifically in private networks. … Automated guided vehicles must communicate with one another and the radio technology becomes a bottleneck for multiple reasons of interference and technical dependencies." Signify and Vodafone are currently working on a trial that combines 5G and Signify's LiFi technology.
— Martha DeGrasse, special to Light Reading. Follow her @mardegrasse