stein@opensky
I have wanted to write something about this topic for a while – and now I found the time was right. What you will get below is an overview, plus some high-level considerations, not deep technical insight.
In connection with 5G, “private” networks have attracted increased attention recently, not only because 5G has capabilities needed to support a range of industrial applications – but also because various regulators across the world have started to allow “private spectrum”. Network slicing is also an important capability of 5G enabling dedicated “private” network for enterprises and/or “private” use.
One of the initial debates around private spectrum came up in Germany – when large industrial enterprises like Daimler, Volkswagen, Siemens, BASF, Bosch, Sennheiser etc (in telco terms: “large verticals”) voiced interest in building their own campus networks – and when the German regulator subsequently opened up for private 5G licenses for such use. Today, many regulators across the world have done the same – and countries across the globe today include the USA, many countries in Europe, UK, Japan, Brazil, Australia, New Zealand, Singapore and more. Recently, also my own country Norway is doing the same, with NKOM proposing to open up the 3.8 GHz - 4.2 GHz spectrum band for local 5G networks from 1H 2022 some time.
As an enterprise, private 5G networks are something to consider, however, what suits you best depends on a lot of factors. If you are a large industrial company like e.g. Siemens it could make sense to acquire spectrum and plan for and operate your own private 5G network. If you are a mid-sized or smaller company, it may be more sensible to work with a traditional mobile operator (either with a 5G network slice or some other kind of arrangement) – or even new types of players offering private mobile network services – and there are many of these (including MVNOs, traditional telco vendors, enterprise networking vendors, various types of new startup companies – and, not at least, hyperscalers like Google, Amazon, Microsoft etc). To maneuver within this space requires quite some insight and effort – and there are also various cost-benefit issues to consider.
The first question to ask is: Do I really need a private mobile network? … and for what purpose? Is it for improved local coverage as a campus network? Is it for a closed network environment and increased security? Is it to support business critical applications – or is it mainly for internal communication? etc.
What is your use case? Apart from the obvious general communication use case, there are many things that 5G can do for you if you consider it for industrial applications – including providing reliable broadband / video communication for various purposes like remote monitoring or control, replacing cabling in your industrial production systems, managing large fleets of IoT sensors etc. You also need to consider the degree of integration needed with your legacy production systems – and do you require special purpose devices?
What is a private network?
Having built some mobile networks in the past, it occurs to me that there could be some confusion about what a private network really is. I will not try to define what it is and isn’t (others may have done that – in various ways) - but I will highlight some important aspects.
To provide coverage in a mobile network, you need to deploy base stations – and these transmit frequencies for which you need access to spectrum. You may own this spectrum yourself – or you can get access to it through someone else having a spectrum license (typically a mobile network operator – MNO). For years there have been existing players already that offer public mobile services without access to spectrum – and these are typically MVNOs (Mobile Virtual Network Operators) which have their own core network functions - and which offer their own “network” through leasing access to base stations from MNOs. In the context of acquiring private spectrum licenses, it is about having access to “your own” base stations with your own spectrum – with strong control over the coverage you get.
If your main ambition is security and keeping others out of your network, although private spectrum might help, it is mainly about core network functions, e.g. with closed user groups, with or without outside access – or about operating your own internal secure LAN or WAN for business applications – based on 5G. In such cases, 5G can be a very good network isolating your business applications from outside usage, supported by a very fast, reliable and secure 5G radio access technology.
You may also have specific needs for certain capabilities or Quality of Service, like e.g. latency, reliability, availability etc.
A private network can thus have various implementations, with or without private base stations and with or without a private core network. 3GPP has defined four high-level options that they are accommodating for technically, 1) a “stand-alone” private network (with a private core and RAN), 2) a “hosted” private network (with a core and RAN hosted by an MNO), 3) “RAN sharing” (with a private core but sharing base stations with the MNO) – and 4) a “virtual” private network (core and RAN) as a secure network slice in the MNOs public network).
Private spectrum
One of the key drivers of the large private networks interest is private spectrum. Traditionally, spectrum for cellular mobile networks have been allocated to mobile network operators only, as licensed spectrum for public mobile services. This is in contrast to e.g. how spectrum for WiFi has been regulated. WiFi typically has used unlicensed (free for all) spectrum which is not allocated to dedicated users. What is currently on the rise in the context of private 5G networks is localized and shared spectrum typically used for campus networks – which need to be allocated to a list of users by the regulator or lightly managed somehow, e.g. like the CBRS spectrum in the USA.
If we consider the shared spectrum for campus networks more closely, different countries are handling this in slightly different ways – but it is generally about a dedicated spectrum band for private networks, and allocation to concrete users based on applications for specified locations - and some form of frequency coordination.
If we look at how the “private 5G spectrum” is intended in my country Norway (as recently proposed by NKOM – article in Norwegian), this will be in the 3.8 – 4.2 GHz band, for bandwidths of up to 80 MHz, based on applications individually approved by the regulator for up to 5 years for specific locations, for either low-power transmission with flexibility to place base stations within a defined area – or high-power transmission from exact and specified locations.
In the 3.6 GHz band (3.4 - 3.8 GHz), the primary 5G band in this part of the spectrum, however, NKOM has not allocated any private spectrum. However, MNOs will be obliged to offer “private 5G networks” to enterprises either through specific services (e.g. network slicing) or through leasing of spectrum.
In the UK, a similar scheme for “Shared access licenses” was announced by Ofcom in 2019. In the USA, on the other hand, the management of the CBRS spectrum (in the 3.5 GHz band) is handled automatically by a Spectrum Access System (SAS), which manages spectrum sharing on a dynamic, as-needed basis across three tiers. The three tiers in the CBRS band include: Incumbent Access licenses, Priority Access licenses (PALs), and General Authorized Access licenses (GAA). The FCC requires the use of a SAS administrator to coordinate and manage operations of the three tiers to prevent interference to higher priority users.
In Germany, the BNetzA has already approved at least 123 private 5G networks in the range 3.7 - 3.8 GHz for local networks. The frequencies are used in particular for Industry 4.0 applications in the fields of manufacturing, agriculture and forestry. Enterprises can apply for local licenses of up to 100 MHz (in 10 MHz TDD blocks) for up to 10 years. Users must ensure interference-free operation.
For more information on private networks in Germany (and in some other countries like Japan, China etc), check also out this article from Rethink Technology Research.
What do we see in the market?
Private networks may be seen as a threat by many MNOs, specifically when using private spectrum. Operators have always been fighting to get as much spectrum as possible, as the more spectrum they have, the easier it is for them to do network planning – with typically lower Capex (check also out this earlier article from last year with a few 5G reality checks) . They also keep others out from their license to operate. After all, spectrum is a much sought-after natural resource. Seeing that private spectrum is actually happening, however, many MNOs have also decided to look at private networks as an opportunity (see e.g. this recent article on Deutsche Telecom building an industrial private 5G campus network for Berlin’s future factory hub). If verticals actually acquire spectrum, MNOs may take a position on operating or hosting the network for them.
In general, MNOs focus mostly on making a strong service offering for public 5G services for consumers and enterprises – and 5G network slicing usually is their preferred way of offering “private” network services to enterprises. It might, however, be argued that this offering probably is better suited for SMEs than large industrials like Siemens, Bosch or Daimler as referred above. The challenge MNOs have, however, is that hey are normally not very strong in working in a B2B perspective (refer e.g. this earlier article on who will eventually benefit from 5G – or this one more focused on succeeding with IoT) – so they are likely to be challenged also in the SME segment.
If we turn to the various new players emerging in the private networks market, others have tried to structure this in more detail (like e.g. STL, Disruptive Analysis etc), however, I can give some examples. One obvious type may be (general-purpose or specialized) MVNOs either targeting verticals specifically for providing private network functionality – or complementing their normal operation without public spectrum by adding private spectrum (and base stations). The same could also apply to other service providers with experience in offering B2B services, like e.g. fixed and cable operators, FWA or WISP providers etc).
Another clear candidate may be tower companies (another trend these days) which already have experience with tower infrastructure and base stations. They could want to acquire private spectrum to target the private networks market.
Even MNOs may act as a new player in the private networks market in countries where they don’t have their own public spectrum. In such a case, the MNO may acquire private spectrum in a foreign market e.g. to serve multinational customers – or to create new overseas business (like e.g. what Verizon is looking for in the UK).
One of the greatest challenges for an incumbent MNO in the private networks market, however, could be the traditional telco vendors (the likes of Ericsson, Nokia and so on). On one side they depend on having a good relationship with their main customers (the MNOs), however, they are also very well suited to deploy and manage a private mobile network for enterprises – due to their competence and benefit of scale. It could be, however, that the prices they offer enterprises for equipment and services will be less competitive. Large MNOs typically get large volume discounts and procurement synergies from the same telco vendors.
Another one of the greatest challenges for an incumbent MNO in the private networks market is what can be provided by smaller or larger software companies, hyperscalers or smaller or larger “software telcos” (refer earlier article). They may already have their own core network – and could easily complement this with private spectrum. In addition, they will in most cases have strong experience in working with B2B customers or working with system integrators.
As commented above, the market for private 5G networks might be crowded and complicated – not easy to maneuver in for a medium-sized enterprise. See also this article from Light Reading. These enterprises are likely to need some help !
What does it take to build and manage a mobile network?
Building and managing a mobile network requires dedicated expertise, effort, investments and staff – which is something most vertical enterprises don’t have. This is something that MNOs have been building up over decades – and in many cases, traditional telco vendors have also acquired this competence – as MNOs increasingly have outsourced deployment as well as operation of their networks to the telco vendors. These telco vendors have thus built up a certain economy of scale – while the MNOs have saved cost.
Deploying the network: On the RAN side, deploying a (wide-area) cellular Radio Access Network involves a range of activities like radio planning, site finding, site contracting, building permits, site construction, backhaul planning, site integration, site optimization etc. Most of these activities also require proper tools and competence in using them. Now it must be stated that, in a campus-type private mobile network, many of these activities are very much simplified – and many of these processes are also quite automated with the later “G”s. In any case, however simplified it is, this is expertise mainly possessed by MNOs and telco vendors.
On the core network side, the situation is quite different – and it depends on what kind of supplier you have. You could have a traditional telco vendor like Ericsson, Huawei or Nokia – or you could have a new and disruptive supplier like some kind of small software telco (or a large hyperscaler). The deployment would typically be done by the vendor – and could take anything from a few hours to weeks and months, depending on the supplier and your need for premises.
Depending on the private network scenario you need, however, an enterprise may or may not have a RAN and it may or may not have a core network to deal with.
Managing the network: Managing a mobile cellular network also requires dedicated staff and expertise, to operate the network and also to maintain the network – and such staff will have to be available 24/7. Should one of the base stations go down, it will have to be fixed – and a person could possibly have to go to the site to fix it. Many things can be done remotely – but not all. On the core side, the same applies. However, the maintenance activities may not require a “field force”.
Upgrading the network: A mobile network is not static. It may have to be upgraded from time to time, be it to do optimization, to fix bugs in the software, to implement new features or to install capacity upgrades. Even more fundamental upgrades may also be needed, e.g. to upgrade to new standards releases. Managing the further development of the network requires adequate expertise and staff. There is a risk that the private network may become outdated – if it is not handled by professionals.
Is 5G really what you need?
This article is mainly focused on how 5G can be used for enterprises in implementing private networks. A question to ask, however, before going all in on a private 5G network is if 5G is the right technology to use – and this obviously depends on the use cases you are looking for.
An alternative technology that is getting a lot of traction these days is WiFi6. Without getting distracted into a technology debate about WiFi6 or 5G, however, I would simply refer to my earlier article on “WiFi6 and 5G – Is 6 better than 5?”. In short, the article identifies that both technologies are on a good track and that WiFi6 can do a lot of the same stuff that 5G can do – and in many ways the technologies are complementary. Some key differences, however, are that WiFi6 works within an unlicensed scheme – so an enterprise does not need to worry about spectrum licenses – and also that the ecosystem around WiFi most likely is broader than that of 5G. Therefore, it could well be that WiFi6 may have benefits for enterprises in many industrial use cases – and also some limitations.
Summary
So what should be the essence from reading this article? First of all, a private 5G network can take many forms – and, as an enterprise, you need to be clear on why you want a private 5G network – and what you want to use it for. You also need to consider your own capabilities, investment options and life-cycle cost of your alternatives.
If you are a major industrial player (like e.g. Bosch or ABB) you may consider that you have capabilities and financial muscles to choose which ever option, so the considerations here are possibly not so much for the large industrials – but maybe more rather for the private networks market for medium-sized enterprises considering some form of private network, be it with or without private spectrum.
If you are a smaller company, you should first of all consider if you need a private network at all – but if you do, then I would assume that some form of network slice (or any other special service) provided by an MNO is the lowest risk option.
If you are a medium-sized enterprise that considers a “private” 5G network, there will be many options to consider:
You could consider buying some form of network slice from one of the MNOs in your market – with an adequate SLA.
You could also consider acquiring private spectrum from the regulator for use in your campus (or campuses – with or without interconnection).
You could try to lease spectrum from one of the MNOs, if they will allow it.
With spectrum, you need to consider the cost of purchasing base stations from a telco vendor – and the cost of deploying, operating and maintaining these.
You could try to share base stations with an operator – and maybe they will even take (some of) the Capex and/or Opex for it.
You could decide to outsource the whole deployment and/or operation to some form of player.
You could also agree with an MNO to host the whole network for you – or you ask a telco vendor for the same.
You could ask any of a large number of players to offer you a private 5G network solution, with or without a RAN – or with or without a core, depending on your needs.
Finally, but not at least, depending on your use case – you need to consider the degree of integration needed with your IT infrastructure, how easy it is to implement – and who can best serve this integration.
The essence of it all is that going for private 5G networks is not an easy choice – and it will have strategic as well as cost consequences. There are a lot of potential suppliers in the market – and there are many technical options for you as an enterprise.
OpenSky Consulting has strong experience on planning and building mobile networks and on mobile communications, strategically, technically and business-wise. We offer advisory services relating to 5G – and can help considering your choices or helping to deploy.