This demand has been driven by a thirst for data-intensive applications such as media streaming, with network traffic set to grow more than 400% by 2030. This is undoubtedly great news for the consumer experience. However, it’s only one part of the story that began long before the first commercial networks were switched on in 2019.
5G’s potential to transform the industry was touted as its big differentiator over previous generations as the telecoms sector overhauled its infrastructure. But with less obvious evidence of 5G being broadly deployed in industrial settings contrasted with stellar consumer growth, it would be easy to write off its enterprise potential.
Stepping out of the shadow
Contrasting enterprise adoption rates with consumer subscriptions isn’t a fair comparison. Firstly, buying cycles for enterprises happen over a much longer period. Assessing and deploying a private wireless network is a much more complex task than choosing a handset and SIM subscription. Additionally, beyond the mass market, devices and software for specialised use cases take more time to define and develop. In some countries, spectrum simply hasn’t been available to enterprises though access is gradually improving.
As the market matures, it is overcoming these obstacles, suggesting private 5G is finally ready to step out of the shadow of commercial networks. Pioneering businesses have steadily been expanding private 5G’s footprint and following years of cumulative growth we have arrived at an inflection point and the number of private networks is set to grow rapidly. Data from Analysys Mason anticipates that the number of private LTE/5G networks will increase from around 4,000 in 2022 to more than 60,000 by 2028.
Drivers for growth
So, what’s contributing to this explosion? A maturing device ecosystem, proven use cases, and greater demand for more secure and reliable connectivity mean that private 5G has come of age. Until recently, only a handful of vendors were producing private 5G-ready devices, but enterprises now have far more choice.
The urgency for businesses to invest in artificial intelligence (AI) and deploy it across their operations has also provided fresh impetus and capital for private networks. 5G’s ultra-low latency and superior throughput make it ideal for connecting data-intensive processes with AI models, particularly at the edge of networks.
The emergence of 5G RedCap as a superior alternative to LTE-M and NB-IoT is also accelerating the shift for enterprises with a large IoT footprint. Examples of 5G RedCap applications include wireless industrial sensors, video surveillance equipment, smart grid and smart metering for utilities and smart wearables for worker safety.
While there is real momentum behind private 5G networks, it’s important to acknowledge that private 4G/LTE still has a significant role to play. Most private networks that utilise licenced spectrum are currently built on LTE and this dominance will continue for a few years. In many cases, LTE is more than adequate for the networks’ requirements, so moving up a generation isn’t a priority. Many of these networks are upgradable to private 5G allowing enterprises to make the switch at a time that suits their specific needs.
Industrial transformation
Private 5G is quietly transforming numerous industry verticals. Advanced connectivity is enabling smart operations that are driving efficiency, increased safety and greater levels of sustainability than were possible with legacy infrastructure.
In San Sebastian, Spanish airport operator AENA has deployed drones for security and advanced environmental monitoring on a private 5G network operated by Cellnex. The drones collect environmental data including air quality, temperature, humidity and noise which is then analysed to help manage airport operations more sustainably and minimise impact on the local environment.
Lufthansa Technik, the engineering division of the German airline, is using private 5G at its Hamburg facility to make aircraft maintenance more efficient. Previously, customers were required to travel to Lufthansa Technik’s facility to attend vital engine part inspections. The new ‘Virtual Table Inspection’ (VTI) enabled by private 5G means customers can attend remotely and communicate with mechanics in real time to expedite maintenance schedules and reduce travel.
Verizon has deployed a private 5G network at the Port of Southampton, one of the busiest ports in the UK responsible for £40 billion in exports. The network is enabling the port’s operator Associated British Ports (ABP) to offer service innovations such as asset tracking, autonomous guided vehicles, workflow management, predictive maintenance and safety monitoring.
In Finland, Telia and Digita have built a private 5G network for Posiva, a company pioneering innovative methods for the safe disposal of nuclear fuel. The network enables the operation of an advanced automation system which improves process safety for employees.
The next five years
Enterprise spending on private 5G networks is expected to reach $9.2 billion by 2028, according to Analysys Mason. But despite interest in private 5G being high, it remains a nascent technology, due to limited availability and the high cost of 5G devices in the market.
Currently, adoption is limited to large enterprises with the personnel and financial capital required to build at scale. However, as awareness of the benefits of private networks increases and access becomes more widely available, adoption is expected to increase by 1,400% from 2022-2028.
Industrial sectors such as manufacturing, transport, and mining are the biggest adopters as they enable them to achieve automation goals and support high bandwidth, low latency use cases such as AI and robotics. But demand for private networks in other sectors – such as education, healthcare and emergency services – is steadily growing as more businesses undergo digital transformation projects, implement AI and replace legacy networks.
Perhaps unsurprisingly, China is leading the charge in 5G deployments. Boosted by financial stimulus plans from the government, the country is on course to meet its ambition of becoming a market leader for 5G, with the nation alone predicted to account for 45% of private networks deployed by 2028. Western Europe and North America each accounted for around a fifth of deployments in 2022, while middle-low-income markets have developed gradually thanks to strong demand in one or two key sectors.
What we will likely see in the next five years, then, are 5G private networks co-existing with Wi-Fi, stepping in to support applications where Wi-Fi is limited, including outdoor coverage of large sites to improve cost-effectiveness or indoor sites where dedicated spectrum can perform better in ‘noisy’ signal environments.
The acceleration towards private 5G networks over the next five years will see enterprise networks step out of the shadow of their public commercial counterparts. While the total number of connections will remain comparatively small, the impact in terms of innovation productivity, economic growth and the improvement of sustainability, environment and society will be significant. The next five years of 5G are set to be even more exciting than the last.
