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Ericsson refines private wireless sales pitch

Ericsson on Tuesday announced its new "Private 5G" offering. The company said the service "optimizes and simplifies business operations with cloud-based network management, keeps sensitive data on-premise, has zero downtime upgrades and guarantees high performance through Service-Level Agreements (SLAs)." The company added that the new product will initially be targeted at such industries as manufacturing, mining, utilities, ports and airports.

Thomas Noren, a longtime Ericsson veteran who previously served as Ericsson's head of 5G commercialization, will lead the business.

To be clear, Ericsson has been selling equipment and services for private wireless networks for several years now. For example, the company announced a major 4G private wireless network deployment for aerospace giant Airbus just a few months ago. And "dedicated networks" was one of the key reasons cited by Ericsson in its $1.1 billion acquisition of Cradlepoint last year.

But Ericsson's new "Private 5G" offering both streamlines the company's portfolio in the sector and positions Ericsson to sell products and services directly to enterprises (as Nokia does) in addition to its traditional network operator customers.

"Ericsson's preference is still to work through operators and they are taking as many steps as they can to empower operators to embrace the enterprise opportunity," analyst John Byrne of GlobalData wrote in response to questions from Light Reading. "However, they are also moving closer to the Nokia position of reserving the right to proceed directly if operators are not taking the ball and running with it. They are building an ecosystem of partners with specific vertical expertise or device capabilities that operators can leverage (but the underlying subtext is that so can Ericsson with or without operators)."

Daryl Schoolar, practice leader for fixed and mobile infrastructure for research and consulting firm Omdia, told Light Reading that Ericsson's new offering will allow the company to carefully tailor its offerings for specific enterprise customers. "These industries don't need everything that Verizon needs," he explained.

Schoolar added that Ericsson's announcement also sheds some light on the areas where the company might be expecting immediate growth: manufacturing, mining and utilities, for example.

Omdia and Light Reading are both owned by Informa.

Catching up

Ericsson's new announcement is also noteworthy considering the company's rival Nokia has been loudly touting the private wireless networking opportunity for years now. "The opportunity is massive," Houman Modarres, senior director of enterprise marketing at Nokia, told Light Reading in 2019. He cited figures from Harbor Research showing that the overall market for private wireless networks could span up to 14 million sites worldwide, which would be double the 7 million macro basestations devoted to commercial wireless networks.

With its refreshed marketing message around private wireless networking, Ericsson is clearly looking to tackle that opportunity. But the company's announcement also raises the question: Is Ericsson playing a game of catch up?

"In general, I don't actually think it is too late for any vendor to introduce new solutions simply because it is still very early days in the broader private 5G market," explained Stefan Pongratz, an analyst at Dell'Oro Group, in response to questions from Light Reading. Pongratz said his firm estimates the private 5G market will surpass $1 billion in revenues over the next five years – though that's still overshadowed by the overall mobile broadband and fixed wireless network opportunity.

Finally, Pongratz pointed out that the barriers to enter the private wireless networking space are lower than the barriers guarding the bigger public mobile networking sector. Indeed, there are already a wide range of vendors hoping for a piece of the opportunity, including Motorola Solutions, Boingo, JMA, Celona and others. It's also a sector that the big cloud computing companies have begun targeting, with Amazon, Google and Microsoft all touting their offerings for private wireless networks.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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