Exploring the potential of private 5G for operators and beyond

Richard Webb

Director of Network Infrastructure CCS Insight

Sylwia Kechiche

Principal Analyst for IoT and Enterprise GSMA Intelligence

Leo Gergs

5G Markets Senior Analyst ABI Research

Kevin Restivo

Research Manager of 5G and Enterprise Mobility IDC

Four expert analysts give their take on the private 5G market, tackling the role of operators and highlighting some of the most innovative applications so far.

Q: How would you describe private 5G and what are its benefits when compared to 4G?

Richard Webb (RW) The capabilities of 5G go beyond those of 4G (LTE), not just in terms of higher capacity but lower latency, reliability and so on. When you get that paradigm-shift in terms of capability, you open up the potential to support a much broader range of industrial and enterprise use cases. The 5G network architecture is also more cloud-native, software-driven, intelligent and programmable than ever before. At the same time, other technologies such as AI, automation, analytics and edge computing are evolving and can be more closely integrated with 5G, so you have various potentially powerful technology combinations to support enterprises as foundations for their digital transformation programmes, more so than could be offered with the limitations of 4G or Wi-Fi (though both are great in their own way too and still have a role in private networks). That said, private networks can be highly specialised environments with exacting requirements for connectivity and other capabilities, so it takes time to put solutions together (whether based on 5G, 4G or Wi-Fi) and whilst market growth is steady, there remains a long roadmap.

Sylwia Kechiche (SK) Historically, Wi-Fi has been the connectivity choice for private networks. However, mobile technologies (4G/LTE and 5G) are better suited to OT network requirements of high volume, high reliability, mobility and always-on operations. 5G standalone (SA) offers the most benefits related to enhanced Mobile Broadband (eMBB), massive IoT and critical IoT, allowing support for a wide range of devices and applications with more demanding bandwidth and latency requirements compared to Wi-Fi and 4G. In the future, 5G SA will also deliver time-sensitive networking for high-precision devices.

Leo Gergs (LG) Private 5G describes the opportunity for enterprises to set up their own mobile network for enterprise premises that does not require any connection to public network infrastructure. This gives enterprises the chance to use a 5G cellular network to transport valuable and sensitive data that should remain on-premise, as all networking equipment is deployed on-site. Considering enterprise verticals, 5G is much more than just “4G + another G”. The distinct features of 5G allow for completely new applications for connectivity on several enterprise verticals:

  • Massive machine-type communications (mMTC) capabilities will support the connectivity of up to one million devices per square kilometre, which will enable setting up highly dense wireless sensor networks for the permanent monitoring of workflows in different enterprise environments. Furthermore, the constant monitoring of machines and other valuable equipment will minimise the risk of a standstill of enterprise operations caused by sudden machine breakdown.
  • The supported bandwidth of 10GB/s in the uplink and 20GB/s in the downlink (through eMBB) will furthermore enable automating, particularly data-intensive processes.
  • Even though 5G on its own will not solve every single pain point that potential enterprise vertical implementers are facing, several new capabilities, including ultra-reliable low-latency communication (URLLC), as well as support for time-sensitive networking (TSN) and deterministic networking, make 5G particularly useful for enterprise applications. Most importantly, 5G will introduce advanced functionality on top of reliable connectivity, including edge computing, network slicing, automated processes and network orchestration, all of which create the foundation for a new service platform.

Kevin Restivo (KR) The market opportunity between private 5G and private 4G is a distinction that should be noted: 5G can expand the scope of mobile private network adoption by supporting new use cases that support the digital transformation efforts of enterprises, such as large-scale mobility of connected devices and reconfigurable production lines.

However, 5G technologies will lead to an expansion in the size of the market opportunity for private 5G networks given the cloud elements in the infrastructure and with more support for virtualised mobile private network (MPN) deployments. At present though, 4G is a more mature set of technologies used by large companies to accommodate their needs. However, more cloud elements in the infrastructure and greater support for virtualised MPN deployments should expand the total addressable market (TAM) for virtualised MPN deployments by making private networks accessible to smaller enterprises.

Q: What is the role of mobile operators in the deployment of private 5G? Are operators pivotal to the process or is there a threat that they could be left out in the future?

RW Mobile operators deliver the 5G connectivity – an important role but not necessarily the ‘central’ position in a private network solution – some enterprises may prefer to work directly with a systems integrator, IT solutions player or cloud provider if they already have an established relationship and are seen by the enterprise as its primary digital transformation partner. 5G connectivity could just be bundled into the overall solution, which may have a specialised focus on AI, compute, security etc – not something an enterprise would necessarily see as delivered by a mobile operator. This is not at all to say operators will be side-lined in this market – more to say, they need to evolve their private network service proposition and capabilities, things like network slicing that is still in the very early days, in order to be compelling.

SK According to the GSMA Intelligence Operators in Focus: Enterprise Opportunity 2021 Survey, 68 per cent of operators claim to currently sell private wireless networks specifically deployed for enterprise customers. The rest are planning to do so by 2025. Operators can utilise various deployment models, from public dedicated networks through hybrid networks (network slicing, public/private campus, private RAN with public core) to private networks. Within these various models, network slicing and edge computing add the benefits of Quality of Service (QoS), privacy, security and specific service-level agreements (SLAs). However, a handful of manufacturers, such as Bosch, are resourced to take an active role in testing and deploying 5G private networks. Since 5G enables multiple modes of deployment, operators are no longer the exclusive service providers. Operators are partnering with manufacturers to develop solutions using various deployment models, including network slicing and customised technical capabilities specific to manufacturing business needs, such as uplink/downlink and the option for equipment installation on-site for faster processing (edge compute).

LG There is a range of new players attacking the traditional telecoms industry when it comes to private networks. This is possible because of spectrum liberalisation initiatives (either setting aside licensed spectrum exclusively to enterprises or shared spectrum, as is the case with CBRS in the US). Hyperscalers like Amazon Web Services (AWS), Microsoft and Google are rapidly advancing their telco ambitions in the private network domain. At the same time, vertical-specific players are working to integrate private cellular networks into their existing enterprise offerings. In addition to system integrators, industrial automation vendors like Bosch Rexroth, Siemens and Phoenix Contact are deeply rooted in the industrial manufacturing domain and growing their product portfolios to include private cellular networks. And their capabilities are advancing rapidly. For example, recently Siemens announced it will provide infrastructure to set up a private 5G network to cover 1.4 million square metres at Germany’s largest exhibition ground in Hannover, which gives a hint of how capable these industrial automation vendors are to serve their specific verticals.

To preserve their enterprise opportunity, operators need to understand that enterprises do not see value in deploying 5G connectivity as such but in the applications it will enable. Therefore, network operators need to integrate cellular connectivity into a much wider technology platform, including AI, data storage and device management capabilities. To be able to offer this in an attractive pricing structure, it is imperative that network operators depart from a connectivity-focused business model and fully embrace either a network-as-a-service or platform-as-a-Service model.

KR Operators can and are playing a critical role in the deployment of private networks, be they 5G or 4G.

We’re tracking operators’ involvement in publicly-announced private network wins and any others we hear about it. What we’ve found is that operators are playing an integral role in the deployment of private networks. One big reason why is that enterprises need to transform their networks to prepare for the future and better deal with the realities of today. Enterprises often look to operators for help with connectivity and network-related issues. The transformation of the network is one massive issue for enterprises in Europe as we have found out in recent studies.

The transformation of the network has been called out as the second-biggest challenge behind only security. As far back as 2019, only 24 per cent of decision makers surveyed for our 2019 enterprise communications survey told us the networks they manage are ready for the applications they want to build. It’s further proof of the need for more efficient networks that can address the issues legacy or inadequate networks present to enterprises today.

These are issues we, and many decision makers, recognise operators are particularly well suited to help with. However, operators are facing more competition from partners and from the enterprises whose business they want when it comes to private networks.

Q: Which sectors are set to gain the most from implementing private 5G in their operations?

RW Firstly, I’d say there is almost no industrial or enterprise sector which would have nothing to potentially gain from private 5G networks, which is why there is such optimism around it as an emerging market. But sectors that are highly process-driven, require real-time, continuous operations, have assets (i.e. machinery) that would benefit from mobile connectivity and require high levels of data security, would be amongst the earlier adopters of 5G private networks. They will already have the use cases that can take advantage of high bandwidth, ultra-low latency, ultra-reliable connectivity and would be seeking to deploy other technologies such as AI, automation, analytics, edge computing and so on – 5G can be a foundational platform for these other emerging technologies to interact with business processes. So far, smart manufacturing, smart power grids, mining are proving to be amongst the first to realise the potential of private 5G.

SK Almost a quarter (22 per cent) of the enterprises surveyed said they require location-specific coverage in 2020, unchanged from the figure in 2019. Of those that require private networks, 88 per cent on average have either already invested or would be likely to invest in their own private network. Manufacturing is one of the industries trialling and testing private 5G, but others include mining, warehousing and healthcare, to name just a few. Trials aim to uncover how 5G can benefit operations. For example, trials at the Worcestershire 5G testbed look at how 5G can benefit Industry 4.0 applications and has shown that applying 5G in the area of preventative maintenance can increase productivity by 1 per cent, while AR-based machine maintenance can yield a 0.54 per cent productivity gain.

LG Particularly, verticals with a high degree of mission- or even life-critical use cases will benefit from private 5G. This is because through URLLC 5G will be able to guarantee a 99.999 per cent reliable network connection with 99.999 per cent availability. As you can imagine, reliably and availability of connection is particularly important if your business or a human life depends on proper functioning. In other words: you do not want to lose a life just because the network was not working. Therefore, there are three main verticals we see can benefit from 5G adoption.

First and foremost, private 5G can enhance the industrial manufacturing domain. As a technology, 5G will be a perfect fit to provide wireless connectivity on the factory floor since it enables, for example, establishing a massive wireless sensor network or implementing VR and AR applications for predictive maintenance and product monitoring. Furthermore, the technology opens up new production opportunities by enabling AI applications to be integrated into manufacturing processes.

Secondly, we see a lot of potential for 5G-enhanced operations in automotive transportation. Not only will 5G-enabled cellular vehicle-to-everything (C-V2X) be an important contributor to safer road traffic (and therefore significantly reduce the burden on health services), but it will also be an important building block in cutting carbon dioxide emissions and therefore creating more sustainability. Automotive heavyweights like Audi, BMW and Volkswagen have partnered with the likes of Ericsson, Huawei and Nokia to commence large-scale trial projects to test the capabilities of cellular technology for connected car use cases. The results of these proof-of-concept projects are auspicious and show that, through enhancing traffic efficiency, 5G can reduce fuel consumption by up to one third.

Last but not least, the healthcare vertical can benefit greatly from 5G adoption. The global Covid-19 outbreak has put healthcare systems across the globe under tremendous pressure and highlights the urgent need to advance toward smart healthcare systems. Covid-19 has also presented the perfect application scenario for the deployment of 5G networks in hospitals, doctors’ practices and social care environments. In fact, the pandemic has accelerated 5G network deployment in hospitals especially in the hardest-hit regions, such as China. By providing sufficient bandwidth through eMBB capabilities, the deployment of a 5G network allowed the introduction of remote diagnostic and consultation facilities within hospitals in China, to prevent patients potentially infected with Covid-19 from having to leave their house to get medical consultation and preliminary diagnosis. By enabling remote consultation, 5G significantly contributed to the reduction of Covid-19 infection rates and therefore prevented countless numbers of lives lost.

KR We expect 5G to open up the market to a range of sectors. Private 5G networks are best suited in specific use cases across three sectors: environments where connectivity is mission critical such as utilities, and oil and gas; industrial environments such as mining, transportation and logistics, and manufacturing; and other enterprises which is an emerging opportunity where new use cases are being developed for retail, education and other industries. Private 5G will be an innovation engine for enterprises and an enabler and accelerant for IoT, Industry 4.0 and edge computing enhanced by digital transformation.

Q: Could you highlight some example use cases which show the potential value of private 5G?

RW Two that come to mind:

1. Ericsson using 5G-enabled smart manufacturing principles in its new 5G factory in the US. This project, through which Ericsson has established a manufacturing base in North America for 5G equipment, is recognised as a ‘lighthouse’ for smart manufacturing and sustainability.

2. Huawei won a Global Mobile Award (GLOMO) at the recent MWC Barcelona for its role in a 5G-enabled smart power project in Shenzhen, China (with China Southern Power Grid). Huawei worked with China Mobile to deploy and integrate 5G with the power grid, introducing new network slicing capabilities amongst other things, to create a more efficient and cleaner energy operation.

There are many other good examples, with new ones emerging all the time, but these are ones that I have looked at closely and been particularly impressed by.

SK Enterprises that choose to deploy a private network do so principally to gain more control over their network – often to isolate it from the public network but also to address requirements for higher availability, lower latency and enhanced privacy (keeping the data on premises and compliant with data regulations) such as the Health Insurance Portability and Accountability Act (HIPAA). With 5G, they gain additional benefits with regards to security and flexibility. The next-generation technology is building on proven cellular security and introduces new properties, such as mutual authentication between the device and the network, and data transmission encryption between devices and networks. It also has the ability to support a wide range of devices and applications with more demanding bandwidth requirements, including wireless robots and real-time video surveillance. Latency, another 5G benefit, is critical to AR/VR to ensure the synchronisation of the virtual and real worlds, and can enhance labour augmentation.

LG In the long term, the transformative power of 5G goes well beyond enabling faster connectivity. Instead, it will enable a whole set of new technologies that can then address even more important enterprise pain points and use cases. By enabling powerful bandwidth combined with latencies of below 10 milliseconds, 5G will be the breeding ground for technologies like AR and VR. Furthermore, 5G will allow the widespread deployment of AI which will transform current manual processes into smartly automated workflows. This can be applied to a healthcare environment where AI can be used to speed up diagnostic procedures and therefore enhance the quality of care for patients. In industrial manufacturing, AI can be used for machine-vision use cases and cloud-based quality control.

KR There are a number of use cases across industry sectors that can be cited as potential applications of 5G standalone networks more broadly if not private 5G. Seaport operators could employ 5G SA networks for real-time monitoring and analysis of environmental data, control of traffic flows, and control of site equipment such as cranes. In airports, new applications could include instant download of flight data when aircraft land, remote control of service equipment and vehicles, and AR-enhanced guidance for site service personnel. In the manufacturing sector, 5G standalone networks will be able to support command and control of site equipment such as autonomous guided vehicles.

Q: What are the main challenges standing in the way of private 5G networks adoption?


  • Telco skillset – not yet fully ‘tuned in’ to the industrial use case environment, the specific needs of enterprises/verticals, and how they should position 5G connectivity aligned with automation, analytics, AI, edge computing, data security services. To be fair to telcos, this is a steep learning curve and not necessarily their traditional core competencies so it will take time to evolve. I expect to see telcos increasingly hire software programmers (as opposed to network engineers) to help boost these skill sets.
  • Immaturity of offerings/partnerships – network and cloud infrastructure equipment and products are ready from a technology perspective but the commercial proposition, business/cost model, pricing of services and so on, are all still evolving.
  • Lack of vertical-specific knowledge amongst telcos, cloud providers, network equipment vendors.
  • Lack of dedicated 5G spectrum allocated specifically for private networks.

SK The key challenges enterprises face when deploying IoT (or any new technology for that matter) are integration with legacy technology, privacy and security, and cost. Integration is key, as in reality only a minority of 5G private networks will be greenfield; most will have to integrate and interoperate with existing (legacy) technologies. Private 5G networks also come with a higher degree of complexity as they have a larger attack surface because of IoT exposure, the physical mobility of devices and interplay between enterprises, mobile operators, manufacturers, IT/OT vendors and suppliers. However, having a clear business outcome in mind and the right partners in place will help overcome these challenges.

LG Main challenges for enterprise private 5G comes from two different sources.

Firstly, the technology and device ecosystem needs to mature. Industrial capabilities like the provision of URLLC or TSN requires hardware that is compatible with 3GPP’s Release 16. Even though Release 16 was standardised more than a year ago, there are still no compatible chipsets available. The chipset manufacturers, as well as infrastructure vendors, need to create a strong and health device ecosystem.

This in turn gives rise to a second, more future-related business aspect: the growing impatience of implementing. After all, enterprises are still waiting for the 5G-enabled capabilities that were promised to them more than two years ago. This disappointment makes them consider non-cellular technology alternatives. Operators must therefore understand that the window of opportunity is closing for CSPs to gain traction in the enterprise 5G world.

KR There are several factors that can inhibit the growth of the market for private networks. Access to spectrum, for example, is particularly important to the deployment of private networks that operate on 5G networks. However, the acquisition of spectrum will be too complicated or unwieldy for many enterprises. Operators, system integrators and network equipment producers are often best positioned to help customers with this process.

The sheer complexity of the effort is another as the convergence of network, IT architecture and services-based operations will drive changes in IT stacks, processes and people which may be ambitious for enterprises. Also, enterprises may not be able to hire the people who can keep pace with the rapid advancement and adoption of new technologies.