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Private mobile networks, a way to take advantage of real 5G


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The deployment of private 5G mobile networks is on the rise, especially in China, because it allows interested private or government organizations to execute a vast digital transformation program in a specific and exclusive location, without being dependent on any operator or public network. The GSA calculates that there are 656 users of fully operational private mobile networks in the world, 38% of them with 5G networks and with a budget of more than 100 million euros.


The manufacturing sector is one of the most active in the development of private mobile networks, because it considers that it can provide many advantages, especially with the use of 5G SA technology, unrelated to 4G. And for network and equipment providers, 5G is a quick and effective way to showcase the possibilities offered by new mobile technology. China is leading the way in installing private 5G mobile networks, which is not surprising given the priority that the government and the three nationalized mobile operators are giving to 5G.


In Europe, the deployment of private 5G mobile networks is also on the rise by large industrial groups, especially German ones, because the German regulator reserved a total of 100 MHz for private networks. Private networks are also growing because the availability of a public 5G SA network in Germany, and in Europe and the United States as a whole, is being delayed much longer than was foreseeable when 5G began to be promoted massively in 2019.

Investment in private 5G networks is expected to increase twenty-fold over this decade, from $5 billion to $110 billion, more than half in China and Asia Pacific.

Quite a few proofs of concept and various trials have been carried out in Europe with satisfactory results in recent months, but it is now time to move on to the industrial scale. At the end of January, the French and German Economy Ministries announced their support for four joint projects for 5G applications in private networks, with a total budget of 17.7 million euros.

The Ministers of Economy of both countries highlight in the statement the importance of joint collaboration. “The four winning projects will allow the 16 participants from Germany and the 14 from France to demonstrate the benefits of 5G in various application scenarios, such as Industry 4.0, business parks and smart operating centers,” the statement said.


One project, 5G-Opera, wants to create a Franco-German ecosystem of 5G private networks with virtualized and/or open hardware and software solutions and will support the other three projects. These initiatives will be financed based on the French “5G and future networks” strategy and the German “5G campus networks”, the statement clarifies.

Manufacturing, mining, energy and logistics projects

The Global mobile Suppliers Association (GSA) has identified 58 countries and territories with deployments of private networks based on LTE and 5G or with spectrum use licenses granted. GSA is an international association that has brought together the entire mobile telephony ecosystem since 1998 and should not be confused with the GSMA, the association of the main mobile operators.


In the GSA report from last February, it is said that there are around 656 organizations with deployments of LTE or 5G private mobile networks. The criterion for including these private networks has been that they must use spectrum defined by the 3GPP, generally for business operational needs or critical missions and that their commercial value exceeds 100,000 euros, precisely to avoid accounting for very small or demonstration and test deployments. of concept.


As these are private networks, it is understood that they are not available to the general public, the report clarifies, although they can include educational institutions that provide mobile broadband to student homes or fixed mobile access (FWA) networks deployed in communities of homes or businesses, as well as cities or towns that use local licenses to provide wireless service in libraries or public spaces, but that are not an extension of the public network.

The manufacturing sector is the most active in private mobile networks, with 111 companies identified by the GSA, as well as mining, education and energy companies

The exact number of existing private mobile networks is difficult to know, the report warns, because many details are not public. But, to improve the existing information on this market, the GSA has a database of LTE and 5G private networks worldwide, which it constantly updates, with the help of members of Ericsson, Huawei and Nokia to harmonize the definitions and decide the criterion to count or not a mobile private network. In this February report of the GSA, many networks have been removed compared to last November’s report and many others have been added, because it is a very dynamic activity.


The GSA has counted a total of 50 private mobile network equipment suppliers based on 4G LTE or 5G. In recent months, the commercial availability of pre-integrated solutions has increased, in order to facilitate their adoption. The association has also identified more than 70 mobile network operators (which may belong to the same group but operate separately) that are involved in private mobile network projects. The association adds that the use of large infrastructures in the cloud and the presence of private networks in commercial companies will allow additional growth in this market.


These 656 identified private mobile networks are spread across the world, although the GSA does not provide any distribution by geographic area. It details, however, that LTE is used in 78% of these networks and 5G in 38% of the total. In a graph of the report it is clarified that LTE monopolizes 61% of private networks, 5G 21% and 17% are mixed, LTE and 5G. The remaining 1% remains to be identified.


The manufacturing sector is the most active in launching private mobile networks, with 111 companies identified by the GSA, compared to 51 at the beginning of 2021. Mining companies are also very active, with 63 deployments or licenses, followed by 58 companies from the education sector and another 58 from the energy sector. In ports and maritime companies there are another 41 deployments. The 5G network of the port of Barcelona is probably part of these latest deployments, like other ports, if it has been considered to be large enough.

Source: GSA. Private Mobile Networks, febrero 2022.

Other sectors, such as health, are in it, especially due to the pandemic, which has accelerated applications that require mobile connectivity, as well as municipal governments, the transport sector and logistics. The variety of sectors is very wide, in any case, and it must be borne in mind that, although 18 activity segments are cited in the graph above, “others” is the second most important.

110 billion in 2030 vs. 5 billion this year

These nearly 250 private 5G mobile networks identified by the GSA worldwide (38% of all private mobile networks) is certainly a very small number if one takes into account the strong promotion that 5G has received, although in recent months the general media have cooled their expectations. At the MWC Barcelona a month ago, for example, few international newspapers covered the congress, apart from the Spanish and some French. The announcements and presentations did not invite optimism either and that the invasion of the Ukraine had been so recent by then that it could not have altered the business strategies for the coming months.


The deployment of 5G private mobile networks is also highly concentrated in Asia, and particularly in China. Turnover from private 5G mobile networks in China was $1.2 billion last year, more than a third of the global total and more than Europe and the United States combined, according to consultancy ABI Research. For this year, the consultancy estimates that China will invest in private 5G networks 60% of the world total and by 2025 the figure is expected to be 5,000 million dollars, according to a report on 5G published last Monday in the Wall Street Journal.


It is well known that China leads the deployment of 5G networks and its Government considers it a national priority. But it is that, aside, the bulk of the Chinese effort to develop 5G will go to the installation of private networks in driving sectors of the national economy, such as manufacturing, logistics and energy, and also those dangerous for human activity, such as mining or refinery of raw materials.


At the beginning of last year, the honorary president and founder of Huawei, Ren Zhengfei, already assured that his company would invest massively in remote control vehicles and automated systems for mining and other sectors of dangerous and remote activities, among other initiatives, without the West take your bet too seriously. The United States was still confident that its embargoes would strangle Huawei’s activity and thus China’s growing supremacy in 5G and technology in general. The same thing that the United States now wants to do with Russia, with Europe as a support.


“China is very ambitious regarding the development of 5G and has proposed that it be a national priority, with the aim of leading the digital transformation and connectivity of the country’s economy,” says Sihan Bo Chen, head of the China area. of the GSMA, the association of operators, in the Wall Street Journal. In April last year, China set a goal of having 560 million individual 5G users by 2023, 40% of the population, which it has largely already achieved.


The other great objective, highlights ABI Research, is that the penetration of 5G in large industries exceeds 35%, which would mean building more than 3,000 private networks next year. Achieving it would mean a very important qualitative leap in the digital transformation of Chinese industries, because it is very clear that the industry, and not consumers in general, must be the protagonists and beneficiaries of the implementation of 5G.


Numerous examples show that the installation of thousands of private 5G networks in Chinese industry in the coming years is more than a goal, it is a palpable reality. ABI cites in the article of the American financial newspaper the automated extraction of coal in a mine in the Chinese province of Shanxi, with 5G technology from Huawei and the operator China Mobile. 5G networks enable remote inspection of mining activity, with vehicles that tunnel and extract coal operated remotely. Huawei and China Mobile’s 5G equipment also runs a steelmaking factory in southern China, with remote-manipulating cranes aided by video surveillance cameras.


At the moment, the turnover with the deployment of 5G private mobile networks is low, but growth in the coming years is expected to be spectacular. ABI Research calculates that global turnover in private 5G networks was about $3 billion last year, to reach $5 billion this year and approach $18 billion in 2025. By 2030, ABI Research estimates, the total investment could be of 109,400 million dollars, as reflected in the lower graph, taken from Monday’s information from the Wall Street Journal, in a special 5G supplement.


As the chart makes clear, China will account for at least a quarter of the total annual investment in private 5G networks for the rest of the decade, with developed Asia Pacific countries (especially South Korea and Japan) another quarter. Another roughly quarter of the annual investment will be in the developing countries of Asia Pacific and the Middle East.


In Europe, the United States and Canada as a whole, therefore, they will have at most a quarter of the total invested in private 5G networks, according to the forecast of ABI Research, a prestigious American consulting firm specializing in industrial technology investments. The 17.7 million euros budgeted by the French and German governments mentioned at the beginning of this article are a drop in this ocean of planned investment.

Western 5G providers on the hunt for investors

In the past MWC Barcelona, ​​private 5G networks occupied a prominent place in the stands of the main network equipment suppliers; that is, Huawei, Ericsson and Nokia. Growth in the private 5G private network (RAN) network equipment market growth was lower than expected last year, as companies hesitate to move from the trial phase to large scale, according to Stefan Pongratz, an analyst and public face of the consultancy firm Dell’Oro, but this year orders are expected to pick up significantly.


Nokia and Ericsson are the most interested in European companies being encouraged with private networks, because operators have difficulties in making the rollout of 5G profitable and are in no hurry to do so. Most European operators have been slow to commit to deploying 5G SA networks, pointing to the end of this year to start the task. Orange, for example, only announced that it had decided to split the 5G SA network installation contract between Ericsson and Nokia.


Apart from Ericsson and Nokia, and Huawei, which had one of the largest and most crowded booths at MWC, Qualcomm made a significant display at the fair, announcing numerous collaboration agreements in private networks, especially 5G with Microsoft and Bosch, as well as the future development of 5G modules to accelerate its adoption with personal computers and laptops. So did Samsung and NTT, albeit virtually, and it was also very clear that Microsoft has high expectations in this field with its Azure platform.


Now it is necessary for the private network projects to become a reality in Europe and for the development of 5G to take off in the industrial sector. However, it will be necessary to conclude the Russian invasion of Ukraine in the least traumatic way possible in order to face the much-vaunted digital transformation of companies, and of the economy in general, thanks to 5G.