Enterprise interest in private networks is growing with the increasing digital transformation. Enterprises can deploy these networks to explore a wide variety of wireless use cases, and deliver connectivity to areas beyond the reach of a public network. These networks can also be tailored for industry and business-specific requirements.
With the advent of 5G, private networks powered by the technology are poised to drive innovation and enable next-generation enterprise transformation for a growing list of sectors, as they offer more pervasive and reliable connectivity, lower latency, improved quality of service, and greater security, scalability, flexibility and network control compared to previous communications technologies. These networks enable and promote virtualisation, artificial intelligence (AI), big data analytics, private cloud services, internet of things and automation in enterprises.
According to the Global Mobile Suppliers Association data, there were 656 organisations deploying long-term evolution (LTE) or 5G private mobile networks, as of February 2022. The manufacturing sector emerged as a strong adopter of private networks, with 111 identified companies involved in pilots or deployments, up from 51 at the beginning of 2021. Meanwhile, as per the International Data Corporation, the private LTE and 5G infrastructure market will reach $5.7 billion in 2024. Further, according to ABI Research, the demand for private network deployments will mainly be driven by heavy industry verticals. Manufacturing and energy production, including mining, oil and gas; and logistics alone are expected to generate half of the total $64 billion in private network revenues by 2030.
Private 5G networks are gaining traction among enterprises globally. For instance, Germany issued 5G private licences to over 33 companies including BMW, Bosch, Siemens and Lufthansa in 2021. In India, IT majors such as Tata Consultancy Services, L&T Technology Services and Tech Mahindra are planning to adopt private 5G networks.
A look at some of the use cases of private networks for enterprises across sectors:
Healthcare is one of the fastest-growing sectors to require private networks. The unprecedented strain induced by the Covid-19 pandemic on healthcare systems across countries has further accelerated the demand for enhanced connectivity and modernisation of facilities, driving hospitals to deploy private networks.
By harvesting huge amounts of data and combining it with AI, the potential to advance healthcare is practically limitless. According to a study by Ericsson, healthcare – and within that, telemedicine – is the largest addressable private 5G market.
For instance, O2 Telefónica confirmed a private 5G set-up at the Helios Park-Klinikum, a private psychiatric and orthopaedics hospital in Leipzig, Germany, in April 2022.
The manufacturing sector is advancing toward a massive digital transformation, enabling many new use cases including automated manufacturing. Private 5G networks play a key role in enhancing the density and performance of automation technologies such as collaborative mobile robots, automated guided vehicles, augmented reality predictive maintenance and virtual reality remote devices in the manufacturing domain, which otherwise have limited potential due to problems related to reliability with Wi-Fi, and latency with LTE.
Deployment of private 5G networks will boost agility and production, reduce response times and help in storing sensitive data internally. These networks, along with other emerging technologies, will be a key enabler of Industry 4.0.
For example, Mercedes Benz Cars collaborated with Telefónica Deutschland and Ericsson to set up the world’s first 5G mobile network for automobile production in its Factory 56 in Sindelfingen, Germany, in 2020.
Private 5G networks enhance the smartness of facilities by delivering significantly improved mobile connectivity and enabling large venues such as malls, stadiums, airports and office buildings to explore new use cases. Some of the top adopters of these networks in the coming years will be sporting events and experiences, as well as smart airports.
Private 5G networks allow these facilities to design and deploy the infrastructure best suited to their digital transformation roadmap by minimising the dependence on third-party wireless service providers.
The logistics sector is yet another high potential use case with regard to private 5G networks. With growing e-commerce penetration across the world, the incessant flow of goods across all logistic checkpoints – including warehouses, ports and distribution centres – needs to be tracked and connected through a diverse range of enterprise mobility devices.
With the sector focused on automating multiple logistical functions, the benefits of private 5G networks are unparalleled and imperative for advanced digital transformation. These networks can support real-time asset and inventory tracking, predictive analytics, facility modelling, automated logistics control and management, and facility and environmental control.
For example, the US Department of Defence is investing nearly $100 million in a private 5G network at their global logistics centre as a critical component of a broader plan to raise logistics efficiency by 40 per cent.
Oil and gas
Oil and gas facilities are set to become another early adopter of private 5G networks, primarily because many of their units are located outside the range of commercial networks. Private networks enable enterprises in the sector to automate, monitor and centralise a significant part of their engineering operations and maintenance. Further, access to real-time data allows the streamlining of operational resources and improves safety, while also reducing costs. New use cases focused on predictive maintenance, worker safety and enhanced training are also being unlocked in the sector.
In July 2020, Accenture and AT&T partnered to help US-based oil company Phillips 66 deploy a private industrial LTE and 5G set-up for low-latency refinery automation and analytics.
The mining sector is yet another domain with huge potential for private 5G networks. Mine operators need reliable wireless connectivity to leverage digital technologies, but are often unable to bring wireless communications to underground environments and meet the critical connectivity demands of machines and mobile workers in open-pit areas.
Private networks can address these challenges by offering reliable and pervasive broadband connectivity to machines, vehicles and workers in all parts of a mine, with fewer access points than Wi-Fi. This translates to enhanced safety, higher productivity and a smaller carbon footprint.
For instance, Kittilä, the largest gold mine in Europe, collaborated with Sweden-based Telia and its partners Digita and Nokia in October 2021 to deploy a private 5G network for both above-ground and underground operations, reaching up to 1 km depth, to improve the occupational safety and reliability of its mining operations.
With an ever-increasing density of connected devices, educational institutions and research facilities are increasingly looking towards private networks and other next-generation technologies to improve operational efficiency, aid faculties and empower students.
Institutions that deploy private 5G networks can have complete autonomy on accessibility, strengthen campus connectivity and establish smart campuses, ranging from building management to advanced cognitive learning.
For example, Las Vegas partnered with Terranet Communications and Baicells to deploy a private municipal network in July 2021, to help nearly 30,000 students with no internet access to keep up with school during the pandemic.
Smart ports and Port 4.0 are emerging concepts in the maritime industry, but many terminal operators continue to lack dedicated and dependable connectivity infrastructure for operational efficiency of cargo handling, employee safety and data security. Moreover, optimal integration of automated systems into supply chain logistics still remains a struggle for many. The only solutions are private LTE and 5G networks. A massive variety of smart port use cases will be enabled through the speed and low latency offered by 5G networks.
For example, UK-based BT partnered with Ericsson to build a 4G/5G network in Port of Tyne in the UK, just months after deploying a private network in Belfast Harbour in Ireland.
A number of cities around the world already use cellular networks to operate infrastructure. Private networks allow cities to connect their smart infrastructure in a more cost-effective way compared to public networks. Smart cities can leverage private 5G networks to securely automate data collection and consolidation.
The bottom line
The applications of private 5G networks are expanding as enterprises realise the benefits of pervasive, low-latency, high-bandwidth, secure connectivity, today and well into the future. With the arrival of commercial 5G and more spectrum being made available for enterprise use, there is a growing interest in private LTE/5G solutions as a basis for connectivity across mission-critical, industrial and traditional enterprises.
According to analysts, investment in 5G private networks will add up to tens of billions of dollars by the end of 2024. Meanwhile, as per a study by KPMG, use cases in domains across government, healthcare, manufacturing, finance and media will unlock approximately £3.35 trillion in revenue in the next seven years.
Private 5G networks are the next big thing for enterprises and industries in digital transformation. The coming years will witness some interesting new deployments and use cases of these networks.