Private 5G networks are experiencing increasing global adoption, driven by the demand for high performance, ultra-reliable connectivity and enhanced security across entire business networks. These networks are poised to drive innovation and enable next-generation enterprise transformation across a range of sectors as they offer improved connectivity, lower latency, better quality of service, and increased security, flexibility and network control vis-à-vis earlier communications technologies. Wireless networking utilising LTE or 5G networks facilitates these transformations, even in the most dynamic, remote or highly secure environments, while leveraging the scalability of a technology that has already been deployed worldwide. These networks enable and promote virtualisation, artificial intelligence, big data analytics, private cloud services, internet of things and automation in enterprises. As spectrum availability expands and technology ecosystems develop, private 5G networks are experiencing widespread uptake.
A look at the global adoption trends in the private 5G mobile network space and the way forward…
Deployment trends
According to the latest data from the Global mobile Suppliers Association (GSA), which tracks private network deployments globally, there were 1,148 private network deployments in enterprises worldwide during the first quarter of 2023. Net additions in the quarter stood at 69 customer references, compared to 1,079 in the previous quarter. The data shows that 321 new private networks were announced in 2022. This number eclipsed the net growth observed in previous years, with 2021 witnessing 312 announcements.
According to GSA data, the adoption of 5G within the private networks segment is also increasing, as indicated by the percentage of 5G and 5G-LTE combination networks rising from 37 per cent in the first quarter of 2022 to 44 per cent in the corresponding period of 2023. 5G and LTE combination networks can be easily upgraded to 5G networks through software as the device ecosystem matures. Currently, LTE is used in 54 per cent of the total private mobile networks. Global System for Mobile Communications-Railway, a secure voice and data communication platform designed specifically for the rail industry, is being deployed in 2 per cent of these networks. Although the proportion of 5G deployments constitutes a significant portion of the total private mobile networks, the GSA highlights that this number skews towards long-term trials and deployments within educational institutions and test bed or validation facilities, with a limited number of networks running real operations in industrial set-ups.
Global uptake
Till date, 74 countries and territories have deployed private LTE or 5G networks, with Egypt being the latest addition. Private mobile networks are primarily concentrated in developed nations, with the US, Germany, China, the UK and Japan having the highest number of deployments. The US leads with the highest number of private mobile networks at 155, followed by Germany (86), China (51), the UK (45) and Japan (34).
Developments around private 5G networks are on the rise in Asia Pacific, with operators launching private 5G
solutions, and established companies and start-ups in the infrastructure and software networking sectors striving to establish their presence in the burgeoning private 5G network market. Private 5G activity in Asia Pacific is concentrated in the region’s most advanced countries, such as Australia, Japan, South Korea and Singapore, reflecting the higher levels of digitalisation and Industry 4.0 initiatives across the public and private sectors in these regions. Elsewhere, momentum is starting to build up, as indicated by developments in India and Thailand. Key drivers behind this growth include Industry 4.0, the increasing ecosystem readiness and maturity, and the presence of enabling regulations. Allied Business Intelligence (ABI) Research expects the deployment of 5G private networks in Asia Pacific to reach revenues of $13 billion in 2028, up from $732 million in 2022.
China is reported to have a significant number of private mobile networks, with figures reaching as high as 10,000. According to ABI Research, companies involved in their deployment generated $1.2 billion in revenue from 5G private networks catering to businesses and governments in the country, accounting for roughly one-third of the global total and surpassing the revenue generated in Europe and North America combined. China’s lead in the private network sector is expected to continue in the coming years, given the ambitious government targets. ABI Research forecasts that private network revenue in the country will exceed $5 billion by 2025. As such, China is ahead of other countries in 5G deployment. According to China’s Ministry of Industry and Information Technology, by end 2021, the country had installed over 1.4 million 5G base stations, which accounted for 60 per cent of the global total. However, with regard to private mobile networks, the GSA is of the view that a large portion of these installed networks use the public network and therefore, do not meet the definition of private mobile networks. Meanwhile, the Middle East and Africa region witnessed a wave of 5G launches in 2022. However, progress on the private 5G networks front has been relatively slow. The entire region has only 53 announced private mobile networks, which is significantly lower compared to other major regions.
Spectrum push
According to the GSA, there is generally a strong, positive correlation between the number of private mobile
networks and the countries with dedicated spectrum allocations. Among the spectrum bands designated for private mobile network deployments intended for local or private network purposes, the C-band spectrum is the most widely assigned. Telecom regulators are actively making or planning to make increased allocations of dedicated spectrum available for private mobile networks, typically in small tranches within specified locations. This spectrum can be directly acquired by organisations instead of mobile operators, offering industries an alternative deployment model. Developed economies such as the US, the UK, Germany and France have already allocated dedicated spectrum for private mobile networks, and Spain and Norway have recently joined the list. This trend is expected to be followed in other countries as well in the near term.
Future outlook
Overall, there is clear and compelling growth in private mobile networks, especially those powered by 5G. Deployments are anticipated to increase in 2023 and beyond, as growing competition in the private 5G space offers enterprises greater options and cost reductions. The availability of new 5G spectrum in various markets and the virtualisation of network solutions serve as the primary factors attracting new entrants (including cloud providers, specialist vendors and start-ups) into the private 5G ecosystem. According to Analysys Mason, the private 5G market is projected to experience a compound annual growth rate of 65 per cent between 2021 and 2027, reaching a total of 39,000 deployments by the end of that period. This growth will be supported by investments, which will increase from $1.5 billion in 2022 to $7.7 billion by 2027. The research firm estimates that in 2021, 26 per cent of the live private networks utilised 5G, and expects nearly half of all deployments to adopt 5G by 2024. By 2027, this figure is projected to increase to two-thirds of the total 39,000 private networks.
Going forward, North America is predicted to dominate the private 5G mobile network segment, primarily driven by increased investments in the development of private 5G network infrastructure. Meanwhile, the Asia-Pacific region is poised to experience the highest growth rate due to growing investments in the development of automated factories and the rapid expansion of the 5G ecosystem in countries such as China, South Korea, Japan, Australia and India. With the rapid growth of 5G opportunities, and telecom regulators in various countries planning initiatives to allocate spectrum for LTE and 5G private usage, there could be significant uptake in the adoption of private 5G networks in the coming years.
