Private 5G growth stymied by pandemic, lack of hardware

Enterprises await 5G standards, mature devices, solid use cases.

5g cellular tower
Shutterstock / Alexander Yakimov

Private 5G networks promise to offer low latency, high reliability, and support for massive numbers of connected devices, but enterpise deployment has been slower than expected, experts say, due to the pandemic and a slow-to-evolve device ecosystem.

IDC reports that the global private LTE and 5G wireless infrastructure market totaled $1.8 billion in revenue in 2021 and will increase to $8.3 billion by 2026, but that spending will grow "slower than expected" in the next couple of years.

"They're still monkeying with the protocols for the massive machine connections and low latency," says Forrester analyst Andre Kindness. "The hardware is still being developed, the chip sets are still being developed."

Price is also an issue. Since the hardware is new, the economies of scale haven't kicked in yet. And if a 5G project uses licensed spectrum, then there are the connectivity costs. "Do you want to be charged for every light or thermostat and pay for that connection?" Kindness says.

Finally, 5G skill sets aren't there yet, either, and the talent that exists is mostly tied up working directly for the telcos.

"For the last three years, companies have been pushed by equipment manufacturers and telcos that 5G is the be-all and end-all of everything," Kindness says. "But I would put a critical eye around it."

Private versus public 5G

All the major cellular carriers in the United States have 5G projects in place, though coverage is limited. Enterprises can leverage these public networks for connectivity for drones and other vehicles, to support remote staff, for first responders, for wide area networks, or to support sensors and edge computing deployments.

Enterprises can also use 5G for backup connectivity in case their landlines go out.

"There are versions of private 5G that are in essence extensions of the commercial mobile network operator infrastructure," says Dan Hays, principal and head of U.S. corporate strategy practice at New York-based PricewaterhouseCoopers LLP. For example, a company can have a cell phone company build infrastructure to enable or enhance coverage and capacity in their location, says Hays, who works closely with numerous telcos, as well as network equipment and device manufacturers.

Then there's the fully private option, which can be operated completely independent of a cell phone company and uses shared CBRS spectrum – Citizens Broadband Radio Service – or unlicensed spectrum such as 5G NR-U, which stands for New Radio Unlicensed.

"It could be an enterprise doing it themselves," says Hays. "Or it could be a systems integrator taking on that responsibility, or an equipment supplier that is offering that solution and doing the engineering and supporting it as well, or a purpose-built company focused on private networks."

All these different players are entering the 5G space, he says. "The jury is still out on who will win and what model will really dominate the market when it comes to building and operating private 5G networks."

It is still very early days for private 5G, Hays adds.

"As a network technology, 5G has become more mainstream for consumer usage as networks have been upgraded," Hays says. "But it hasn't quite taken hold in the enterprise or for private networks due to a lack of available solutions and clarity around what use cases will take full advantage of 5G's capabilities."

Having the right use cases is critical, says Arun Santhanam, vice president for telco at Capgemini Americas.

"You want to mow your lawn, so you buy a lawnmower," Santhanam says. "You don't buy a lawnmower then say, 'Now, what can I do with it?' But that's the biggest mistake people make when adopting 5G. They get caught up in it. Now they have a private 5G network – so what do they do with it?"

Enterprises that start out with use cases are much more successful, he says. "That's why we're recommending a lab environment where these things can be mocked up."

Another challenge that companies can face is scalability. "If something works in a smaller setup, there's no guarantee that it will work in a bigger one," he says.

Finally, there's the issue of interoperability.

"Today, you may have a private 5G network from one group," Santhanam says. "Then you get multiple things [from different vendors]. You want to start connecting them. How do you get them all talking to each other? People will start working on interoperability standards to make it happen."

Until then, these are the growing pains that 5G has to go through, he says.

5G use cases

The vast majority of private 5G deployments today are in manufacturing, warehousing, and logistics, says IDC analyst Rohit Mehra. "Then mining and exploration, utilities, and very large venues like shipping ports, then transportation."

"Those are the current validated verticals where the market is real, deployments are happening, and transitions are well on the way to 5G," he says.

Then, over the next three to five years, as the market matures, more industry segments will begin private 5G adoption, including retail, healthcare, and large campuses.

The biggest driver is when enterprises need networks that extend to large areas that can't be covered with WiFi or public 5G networks. Private 5G is also a good option when enterprises can't use public networks due to performance, reliability, security, or compliance reasons.

"If you want predictable performance and reliability, that's where dedicated 5G comes in," says Mehra. "On the public networks, performance depends on the time of day and how much other traffic the network is seeing."

5G-enabled edge computing for telemedicine

Chris Christou, senior vice president at Booz Allen Hamilton and an expert on cloud and mobility, says that manufacturing and logistics are the current leaders when it comes to 5G use cases. "They really need the reliability and time-sensitive networking," he says.

But a project that he is currently working on involves the use of 5G for telemedicine, to enable augmented and virtual reality headsets for training and diagnostics.

Besides the low-latency, another aspect of 5G which makes it particularly useful for telemedicine is that it is designed to support edge computing.

"You can deploy edge compute without 5G," he says. "But 5G has it incorporated into the standards. It lessens the reliance on appliance-based network devices and makes network services that much easier to deploy and manage."

For example, both AWS and Azure offer edge computing services, says Christou. It's basically an extension of their cloud offerings onto your premises. With 5G connectivity to nearby servers, extended reality headsets can meet very strict performance requirements needed for applications like telemedicine.

"You could have a server in the hospital," he says. "WiFi networks are notoriously not as reliable. And with Ethernet, the devices have to be wired up."

He says that he's already seen performance improvements in applications as a result of using 5G. "And the technology is becoming more and more deployable," he says.

The telemedicine project isn't in production yet, but he hopes that it will be deployed in the next year or two.

Self-driving tractors powered by 5G

Blue White Robotics is a startup with about 130 employees in Israel and California that makes kits to convert tractors to self-driving, autonomous vehicles. The tractors connect to management software that allows a single person to manage an entire fleet. The kit includes GPS, LiDAR (light detection and ranging) remote sensing technology, and video cameras, and it can be installed in any modern tractor and turned off with a switch if a person wants to drive the tractor themselves.

The company uses the shared CBRS spectrum to get connectivity between the central hub and the autonomous vehicles, since farms are usually in rural areas where high-speed, low-latency wireless networks are typically not available.

"5G provided a solution to the level of communication needed on the farm," says marketing director Adi Schechter.

Another benefit of CBRS is that there are no cellular bandwidth costs. In addition, the communications are truly private since no traffic ever hits the public networks.

The first projects went live at the end of 2021, says Schechter. They cover 42 fields, totaling 2.1 square miles. The goal, she says, is to help address food security and labor shortage issues. She recommends that other companies looking to deploy 5G start with small projects, then "test, test, test, improve, and test again."

5G deployment options

For its project, Blue White Robotics used Federated Wireless, a ten-year-old company specializing in helping enterprises deploy private CBRS networks, including 5G.

Few enterprises have 5G networking experts on staff, so most will use at least one external partner to help with their 5G projects, especially at the beginning. One obvious place to start is with the cellular carriers themselves. If anyone knows how to do 5G, it's the global and regional telcos who are rolling it out.

All the global telcos are rolling out 5G for the public markets and have the market cornered on 5G expertise as well as the 5G spectrum licenses.

"AT&T, Verizon, Orange, Telefonica – all the global service providers want to play," says IDC's Mehra. "What they bring to the table is the spectrum that they own."

But the most common 5G deployment strategy is to start with one of the traditional networking suppliers, says Mehra. Nokia, Ericsson, Huawei, Samsung, Fujitsu, Cisco, ZTE, and others are all active in 5G and are dominating the landscape, he says. The major global system integrators, including IBM, HCL, and Wipro, are also players in the 5G market.

Then there are the cloud providers, including Microsoft Azure and Amazon's AWS.

"They're offering a private 5G network in a box," says PwC's Hays. "It's a small piece of equipment that any business can just take out, plug in, and immediately you have a private network available." The current offerings don't necessarily scale well, he added. "But they give you the basics of connectivity."

Plus, the cloud providers are typically able to integrate these private 5G networks into their other services, including cloud and edge computing and AI.

There are also emerging companies that specialize specifically in 5G, like Celona, Inseego, Cradlepoint, and Sierra Wireless, says Mehra. "They're not your traditional Nokias and Ericssons of the world," he says. "But they've built businesses based on 5G technology that they can leverage to become credible vendors."

Celona, for example, focuses on helping companies deploy 5G that works with their AI and edge computing systems. It partners with Verizon and HPE Aruba and also has relationships with AWS, Google, and Microsoft for cloud computing, and Quamcomm and Motorola for the hardware.

Finally, building everything yourself is also a possibility when setting up private 5G networks, if only shared spectrum or unlicensed spectrum is being used.

"It can be done," says Mehra. "But you need to have a large enterprise IT organization that has the necessary skills in-house."

Many companies have networking expertise, he says, but they don't typically have cellular expertise. "They've left it to cellular providers, for the most part." As a result, he says, a managed 5G approach will probably be the most credible option, regardless of who actually provides that managed service.

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