As we’ve all witnessed, 5G hasn’t had much of an impact for consumers just yet. As a result, carriers have yet to reap many of the expected rewards, despite huge outlays to acquire rights to new RF spectrum and build out their network infrastructure. Most aren’t terribly worried, however. They know 5G is a long-term investment, and in the short term, most of the opportunities are expected to occur in the enterprise world.
A new research study by TECHnalysis Research, entitled “Defying Expectations: Private 5G Networks”, suggests that there could be challenges in the 5G business world as well, particularly from cloud computing providers. The study is based on a recent telephone survey of 400 US-based IT and networking professionals from both medium-sized companies (100-999 employees) and large enterprises (1,000+ employees) that either currently have or are planning to deploy a private cellular network within their organizations. The survey questionnaire included questions ranging from intended applications, types of connected devices, integration with existing networks, type and source of radio frequency (RF) spectrum intended to run the network, geographic coverage, types of partners, and much more.
The survey results uncovered a wealth of interesting data points based on real-world experience and forthcoming plans, some of which were expected, but many of which were not. For example, when it comes to the frequencies that organizations said they intend to use for their private networks, the overwhelming majority (81%) selected sub-6, only 17% said mmWave, and a miniscule 2% selected CBRS (Citizens Broadband Radio Service—see “Spectrum-Sharing Technologies like CBRS Key to More Robust Wireless Networks” for more.)
In addition, the bulk of both existing private networks (56%) and planned 5G private networks (84%) are (or will be) used indoors, primarily for general connectivity purposes. Outdoor usage and expansion are expected to drive an almost 60/40 outdoor to indoor split on existing networks and roughly 50/50 parity between indoor and outdoor network usage for planned private 5G networks in the future. Note, however, those numbers are based on predictions for 18 months from now for existing networks and 18 months after initial deployment for those planning to build networks. (The average date of those deployments is 18 months from now, so we’re talking roughly three years before we see those parity levels reached in currently planned networks.)
What’s both fascinating and confusing about these figures is that many have touted mmWave as an ideal match for private networks, particularly indoor ones, yet there seems to be much less interest in deploying it. In addition, concerns about the cost of acquiring spectrum is a big issue for all companies interested in private networks (it was the fourth most common concern overall), yet there was almost no planned deployment of CBRS, which is specifically designed to enable free or very low-cost access to RF spectrum for businesses. Clearly, this represents a lack of education and awareness on the potential benefits of CBRS that the industry needs to address. On the positive side for telcos, just over ½ of organizations said they had acquired or expect to acquire the required spectrum for their private cellular networks through carriers.
When it comes to companies that organizations plan to partner with to build their private networks, the news wasn’t quite as positive. Though 78% of respondents planning to deploy a private 5G network said they would like to partner with telcos, that was second to the 81% who said they wanted to work with cloud computing providers. (Respondents were allowed to make multiple choices and averaged 4.2 types of partner companies they intend to work with.) Figure 1 shows the results for potential 5G network partners.
For those with existing private cellular networks, the difference was even larger: 85% are working with cloud computing companies and 76% are working with telcos. Part of the issue is that many organizations are using or planning to use their private networks as an enabling part of larger computing solutions—especially for things like IoT and edge computing—and not necessarily for standalone telecom-related purposes. As a result, many organizations seem to be shifting their mindset towards working with organizations that can solve these computing issues first and use whatever technology or tools they need to achieve that higher end.
This is where the potential threat to traditional telcos lies, particularly if they focus purely on operational metrics and don’t start positioning themselves as computing solutions providers. Indeed, in a few verbatim responses from survey respondents, they expressed the desire to “break free” from the constraints that they perceive telcos often place them in. At the same time, telcos do have established relationships with essentially every medium- and large-size organization, and they can potentially use those connections to their advantage.
One of the many other interesting findings from the survey is that it is very early days for private cellular networks and a lot of work still needs to be done. There is a great deal of excitement about the potential for private 5G, but there are also several concerns around complexity, costs, integration, and more. Companies that want to succeed here are going to need to address these potential issues head on and drive home the message that they can clearly and plainly deliver high-value solutions that help organizations address the real-world challenges they are facing.
Disclosure: TECHnalysis Research is a tech industry market research and consulting firm and, like all companies in that field, works with many technology vendors as clients, some of whom may be listed in this article.