In private wireless 5G, reality is strangling hype

The hype around private wireless started around five years ago, in the early days of 5G, when vendors like Nokia suggested the market opportunity could span up to 14 million sites worldwide. That would be double the 7 million macro basestations devoted to commercial wireless networks.

That outlook sparked a race among vendors. Startups like Celona, networking giants like Ericsson, hyperscalers like Amazon, operators like Verizon, technology firms like Dell and Cisco – and plenty of other companies – all jumped into the private wireless industry with high hopes.

But actual sales have been tough to find. Analyst Roger Entner with Recon Analytics jokes that there are more analyst reports about private wireless than actual deployments.

The failure of the market to develop has come as a slap in the face to some. "I was too early," admitted Verizon CEO Hans Vestberg earlier this year.

"Nobody is happy with the acceleration of private networks," Casa Systems CEO Michael Glickman told Light Reading recently. Verizon's 2022 agreement with Casa positions Casa to offer core networking services for Verizon's private wireless enterprise customers.

However, the market did move forward during 2023, according to Omdia analyst Pablo Tomasi (Omdia and Light Reading are owned by the same parent company, Informa). "The private networks market continued to grow in 2023, yet it did not significantly accelerate," he wrote in response to questions from Light Reading.

According to Omdia's estimates, the US remains the primary market for private wireless networking. It reached $590 million in 2023. It's expected to grow to $1.6 billion in 2028.

Plugging away

The slow burn in private wireless hasn't stopped vendors from pushing forward. Rajesh Pazhyannur, CEO and co-founder of Ataya, told Light Reading that his startup recently released a new product designed to make it easier and quicker for enterprises and others to deploy a private wireless 5G network. Founded in 2021 with roughly $5 million in seed funding, Ataya has been slowly fleshing out its private wireless networking product lineup.

Pazhyannur acknowledged that many private wireless networking deployments haven't yet shifted from the trial phase to the commercial deployment phase. But he said Ataya exceeded its financial goals in 2023: "That gives us comfort that this market is picking up," he said. He declined to provide the company's financial details.

Other players in the space continue to plug away too. For example, Corning's new Everon radio, for indoor deployments, supports both public networks and private wireless networks. HTC's G Reigns private 5G network division plans to announce new partnerships with the likes of Capgemini and Intel at the upcoming MWC Barcelona trade show. And Kyndryl has reported early wins in industrial private wireless networking with deployments among Dow and Chevron Phillips Chemical.

Some, though, aren't interested. For example, wireless networking equipment vendor Parallel Wireless officials told FierceWireless the company plans to forego the private wireless networking opportunity in favor of focusing on traditional public wireless network providers. That's the opposite of what fellow vendor Airspan did; now, Airspan continues to hope that its pivot into private wireless eventually pays off.

Moves forward

A few recent developments have helped to breathe optimism into the sector.

For one, the US Department of Defense (DoD) is now required to install private wireless 5G networks on all US military bases. There are almost 800 such bases around the world.

Already Verizon has inked two recent agreements for 5G at military bases. And Booz Allen Hamilton won a $10 million contract from the US Navy to build a private 5G network in Guam.

Details can be scarce, though. For example, representatives from Booz Allen Hamilton could not answer even basic questions about the company's deployment plans, including what spectrum it might use. The company referred such questions to the Navy.

Separately, the Wall Street Journal reported that hospitals in the US are increasingly looking at private wireless 5G networks to handle growing demands for high-speed data. The publication cited T-Mobile's new deal with Boston Children's Hospital for such a network.

"Besides the major global verticals of manufacturing, transport and energy, the US is showing significant activities in education, sport and utilities," wrote Tomasi, the Omdia analyst, of private wireless interest in the US. "The country is also showing a healthy level of competition from both large international players as well as local players and startups."

Hype versus reality

But will the private wireless networking market ever reach the sky-high hopes that companies like Nokia – which based its estimates on findings from Harbor Research – had five years ago? Probably not.

"Network spend on private networks [globally] will increase from $1 billion in 2022 to $9 billion in 2028, but will be less than 5% of the equivalent spend on public network infrastructure," wrote analyst Ibraheem Kasujee, with Analysys Mason, on the firm's website.

Why? It's pretty simple: 5G is expensive. Wi-Fi is cheap.

"Our Ekahau solution includes support for planning both private 5G and industrialized Wi-Fi networks," Stephen Bye, chief of Ziff Davis' connectivity business, told Light Reading. "We are seeing significant demand and interest in our Wi-Fi planning and optimization offering, while demand for private 5G has been tepid."

He explained that newer Wi-Fi technologies can be quite capable and offer many of the same advanced technologies – like handoffs from one site to another – as 5G. 

Bye suggested part of the issue lies with the exorbitant patent-licensing fees levied against 5G equipment.

But Kasujee, the Analysys Mason analyst, argued that all is not lost. "Private networks will provide a small boost to operators' enterprise revenue while other segments struggle to grow, and can help operators to develop capabilities such as professional services and vertical-specific expertise," he wrote. "For established network vendors, it represents useful incremental revenue. For start-up vendors, even a market of just a few billion dollars is hugely attractive."

"I still firmly believe in the opportunities," Verizon's Vestberg said of the company's private wireless networking business. "This is a long play for us."