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Mobile Private Networks: what’s the state of play?

OCT 27, 2022 | Matt Hatton
region: ALL vertical: ALL Internet of ThingsHyperconnectivityHuman Machine InterfaceAutonomous Robotic SystemsEdge Computing

Earlier this month we published the report ‘Mobile private network (MPN) state of the union’, providing Transforma Insights’ view on the current state and future prognosis for MPN/ private wireless. This topic is one of the hottest in technology at the moment and straddles my personal tech interest areas of telecoms and IoT. The release of new spectrum such as CBRS in the US, alongside evolutions in 4G and 5G technologies, has made it much more viable to deploy a dedicated mobile network for a specific customer or site.

Why deploy a Mobile Private Network?

The deployment of private networks is nothing new. Wi-Fi networks are the most obvious examples, with infrastructure put in place and managed by the enterprise (or consumer) for supporting connectivity in a specific limited geographical area. But, there are advantages to using cellular technologies, both 4G and 5G. They are highly reliable, provide better coverage, are more flexible to deploy, have better security, support moving devices more effectively, and integrate better with wide area connectivity outside of the prime location. All of this gives them a leg up against the competition.

I should put a shout out here to a company called GXC which I met at Mobile World Congress in Las Vegas a few weeks ago. It provides a very interesting enhancement in private cellular, whereby it has a very clever collision avoidance technology that allows it to reuse the same spectrum for sending and receiving data. This then allows the cellular access points to operate as a mesh with easier deployment, superior redundancy and so on.

There are some particular capabilities that 5G can bring to bear, foremost of which is the Ultra-Reliable Low Latency Communications (URLLC) functionality which will allows for the support of applications like real-time control systems, autonomous vehicles and augmented reality. Although there may not be many applications and services using such capabilities today, the potential is huge.

MPN is mostly about 4G/LTE today, connecting asset-intensive industries dominate

As noted above, there are comparatively few mature applications that demand 5G functionality today. Hence why 80% of MPN deployments are 4G/LTE. There is a couple of reasons for this. Firstly, it’s significantly cheaper. Secondly, and we learnt this from talking to a lot of industrial companies, the fact that LTE is mature is a big plus. While the iterations of 5G are all about adding functionality, most organisations have a preference for a settled technology.

Where are we seeing MPNs adopted? The key sectors are mining/oil & gas, manufacturing, ports, and utilities, collectively quite asset intensive. Mining/oil & gas has a particularly strong showing, accounting for around 20% of all MPN deployments when it represents only 1.2% of the global economy. Part of the reason for this success is a lack of other alternatives, with sites typically located in remote areas and often needing to cover very large areas for both voice and data communications.

Transforma Insights forecasts 22,000 installations by 2030

All of this begs the question: exactly how many of these things are there in the world. There are competing views and quite a lack of consistency on definitions, but Transforma Insights predicts that there will be between 1,000 and 1,500 MPNs deployed worldwide, a figure which we predict will grow to 22,000 on 2030 (according to our middle scenario). There is some complexity here, particularly due to the growth of private and pseudo-private field area networks supporting, for instance, utilities.

It’s the economics, stupid!

Ultimately, the decision of whether to use 4G or 5G for private networks will come down to a cost/benefit analysis. Some private LTE deployments might be less than USD100,000, but typically they will be in excess of USD500,000, and regularly into the millions of dollars. All of this makes it ten times as expensive as deploying alternative technologies including Wi-Fi. For 5G the cost will be even higher. Devices are also significantly more expensive for cellular, and particularly so for 5G, where module prices are still north of USD100. You will only use these technologies if you really need them!

A very interesting recent evolution in pricing came with AWS’s Private 5G offering. Its focus is on small scale deployments, with the offer incorporating network infrastructure, core network and SIM cards. AWS’s illustrative pricing assumes around 100 devices. For this it charges USD7,000 per month, i.e. USD70/device/month.

Network slices and hybrid options

It’s hard to discuss MPN without also diverging onto the topic of network slicing. The needs being addressed are somewhat similar and they are often packaged as tiers of sophistication of offering (with dedicated MPN being the most sophisticated). Instead of deploying a dedicated set of network infrastructure, an enterprise’s connected devices can be supported on the public network infrastructure but with dedicated capacity and logically separated connectivity.

Network slices can be optimised to deliver superior bandwidth, reliability, latency, security and power management, amongst other things. It is possible to deliver slices for specific clients. However, Transforma Insights believes that this will not be the norm. Slices will predominantly be used by operators as a way to offer optimised service classes for particular use cases for all customers, rather than a dedicated capability for a specific company.

There’s also the issue that mobile network operators struggle with some of the technical, commercial and operational issues around how to provision and sell slices to clients.

Other than network slicing, there are other mechanisms for better supporting enterprise requirements for enhanced connectivity. These range from installing more public network infrastructure through to having private infrastructure supported by public core networks. All have their advantages and drawbacks. Ultimately it comes down to a cost/benefit analysis of what functionality the enterprise really needs versus the cost.

Want to learn more?

On the 26th September, ahead of the release of the report, Transforma Insights ran a webinar entitled ‘A marriage made on the campus? Developments in 5G and private networks and how they come together’. Many of the themes covered related to the coverage areas of the report.

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