The private LTE/5G infrastructure and device market grew over 7 percent last year, despite the uncertainty brought on by the pandemic, according to a new report from Mobile Experts. Joe Madden, company founder and principal analyst, said it was a portent for the future.
“We’re really jazzed up about the private LTE and 5G market because things are starting to change fast,” he said, “and we’ve just jacked up our forecasts because we’re seeing good things happening.”
The Mobile Experts forecast said that private LTE/5G infrastructure and devices will significantly increase their share of the overall private wireless market, growing from 11 percent in 2020 to 25 percent in 2026. The total private LTE/5G market opportunity, including services, will be more than $45 billion over the next six years, according to the report.
Mobile Experts looked at several industries in its report – oil & gas, utilities, manufacturing, transportation, government/public sector and mining – and how private networks are evolving to provide them with new capabilities to enhance productivity and safety.
“We have enterprises that are learning how to deploy private networks because they’re interested in automating some of their operations,” Madden said. “We have a lot of companies that want to use something like augmented-reality inspections, so that people can be more remote. It also allows them to do more of their work in factories from safer locations. So, we are seeing a lot of this kind of automation being accelerated in the market right now.”
Mobile Experts has observed active engagements from key suppliers of private LTE/5G. Mobile network operators and cloud players are bringing pre-packaged and custom Core/RAN/Transport solutions for varying needs across different industries.
“Virtualization is encouraging new players to enter the market and innovate – all that to say, we are seeing the momentum building and we expect this market to begin a strong and lengthy growth phase,” Madden said.
One of the biggest obstacles to the adoption of private LTE/5G has been the dependence upon Wi-Fi and the use of wired systems and a reticence to change. Additionally, spectrum was allocated for private broadband networks.
“So I think that’s just inertia is the single thing that’s held them back the most; plus they could only get a sliver of spectrum from 500 kilohertz to a megahertz wide,” Madden said, “but that began changing quickly when broadband spectrum was made available for these kinds of applications in the Citizens Broadband Radio Service.”
The need for security is another motivating reason behind private LTE/5G, according to Madden. Wi-Fi is not perceived by enterprises as being as secure as LTE or 5G, which have control and user point separation (CUPS). If there’s a camera analyzing welding joints for quality control at automotive chassis facility, the HD video is stored on-premise and never exposed to a hacker.
“With GSM 3G and early LTE, we had no separation of the control plane and user plane, which meant that the data had to be routed through the public cellular network,” Madden said. “One of the things that have changed in the last few years is that now we have control and user plane separation, so that the user plane data never leaves the company facility. That gives the enterprise a better feeling about the security of their data and the control over their own future.”
The Mobile Experts report separates business models into three areas: enterprise-direct, hybrid and private wireless-as-a-service. In enterprise-direct, the company directly buys its own equipment, whether or not it owns or subleases the spectrum. On the other extreme, the private wireless-as-a service uses a managed service provider, such as a mobile network operator using a slice of its network or even a neutral-host operator.
“We are going to have options where, for example, the enterprise might buy the spectrum or even buy their own equipment, but then they might want to use a cloud service for their core network, instead of buying their own software and running it on a server,” Madden said. “So, using the in-between option, you can own some elements and then offload some elements where it’s scalable and easy to do.”
Right now, enterprise-direct is the dominant business model used by railroads, utilities and others for supervisory control and data acquisition (SCADA) and internet of things (IoT) purposes. But over the next five years, the managed service provider model will grow at a rapid pace, according to Madden.
“We’re seeing a lot of enterprises realizing that deploying private LTE and private 5G is harder to do than they thought. It is not easy like Wi-Fi,” he said. “So private wireless-as-a-service, something offered by an operator, is coming on strong. We do see that growing and becoming a sizeable fraction of the market over the next five years.”