Home5G & BeyondPrivate LTE and 5G networks will be worth more than $6.4bn by...

    Private LTE and 5G networks will be worth more than $6.4bn by 2026 


    The question is where and how that will happen, so we asked the authors of a new report 

    Market intelligence firm SNS Telecom & IT’s new report on private LTE and 5G Networks concludes that global spending on this infrastructure for vertical industries is projected to exceed $6.4bn by the end of 2026. 

    These are big numbers and a lot of factors like spectrum availability, competing technologies and even enterprise skillsets will determine how close we come to this figure and which industries will be early adopters. 

    One of the key factors accelerating the adoption of private LTE and 5G networks is the liberalisation of spectrum. National regulators have been proactive in releasing or granting access to shared and local area licensed spectrum, fostering an environment conducive to private network deployments. 

    For example, the United Kingdom has implemented a shared and local access licensing model, Germany has issued licenses for 5G campus networks, and France has established vertical spectrum and sub-letting arrangements. Other countries, such as Finland, Sweden, and Norway, have allocated dedicated national spectrum for specific critical communications-related applications. 

    Beyond national spectrum allocations, there’s also a big opportunity to deliver private LTE/5G over license-exempt spectrum using unlicensed LTE and 5G NR-U equipment for private networks.  

    The report highlights several case studies that demonstrate the versatility of private LTE and 5G networks. For instance, the German Armed Forces have deployed a ZNV (Deployable Cellular Networks) solution, enabling them to establish cellular communications in rapidly deployable scenarios. In Taiwan, the provision of 4.8-4.9GHz spectrum for private 5G networks has facilitated targeted connectivity solutions. 

    Looking ahead, SNS Telecom & IT estimates that spending on private LTE and 5G network infrastructure will experience a Compound Annual Growth Rate (CAGR) of around 18% between 2023 and 2026. By the end of 2026, these investments are projected to exceed $6.4bn. 

    As much as 40% of these investments, nearly $2.8bn, will be directed towards the build-out of standalone private 5G networks. The authors believe private networks will become an almost parallel equipment ecosystem to public mobile operator infrastructure in terms of market size by the late 2020s. 

    Going beyond the hype 

    Mobile Europe quizzed SNS Telecom & IT’s analyst team on some of the report’s findings to gauge how much impact private LTE/5G will have.  

    Q. In mining for example, 4G LTE is sufficient for many applications – what’s going to change to make 5G a no-brainer in these instances? 

    Higher data rates (and higher resolution) for applications such as video surveillance, greater connection density for IoT sensor networking, lower latencies for machine control, and higher reliability. 

    Q. What about indoor private 4G/5G networks, what is the market opportunity? 

    Within the context of “vertical” industries, we are seeing growing investments in indoor private 4G/5G small cells for dedicated wireless coverage in environments such as factories, warehouses, hospitals, airports and university campuses. 

    From a “horizontal” perspective, enterprise RAN systems for indoor coverage enhancement are relatively common and end-to-end private networks are also starting to be implemented in offices, buildings and corporate campuses. The global market opportunity for indoor private 4G/5G networks will be within the $2bn range annually by 2026. 

    Q. How much will the lack of devices hamper 5G private growth – what needs to happen to break this issue down? 

    There is this narrative that there are no suitable 5G devices available for industrial applications. The truth is that many 3GPP Release 15-based 5G terminal products are commercially available and being utilised as part of private 5G network deployments for use cases such as Ultra-High Definition video transmission, Automated Guided Vehicles and AR/VR-based worker support in industrial environments.  

    3GPP Release 15-based products support a subset of URLLC functionality, in addition to eMBB (enhanced Mobile Broadband) use cases. 

    In addition, devices equipped with 3GPP Release 16-compliant chipsets – which support the full URLLC (Ultra-Reliable Low-Latency Communications) feature set – are starting to appear on a commercially viable basis. We expect to see a significant increase in private 5G installations in 2024 and beyond with the widespread availability of these products. 

    Q. How much will private 4/5G interact with P25/TETRA critical networks? 

    As long as P25 and TETRA networks exist, there will be a high level of interaction. Land Mobile Radio (LMR) networks are unlikely to be fully replaced by LTE and 5G NR until the late 2020s to early 2030s, especially in markets where large-scale and nationwide systems have been rolled out or upgraded recently – for example, Germany’s BDBOS, Norway’s Nødnett and the Netherlands’ C2000 TETRA networks. 

    Many suppliers, including but not limited to Ericsson, Samsung, Nemergent Solutions, Etherstack and Streamwide, have launched LMR-3GPP MCX interworking function solutions that bridge traditional LMR systems with MCX (Mission-Critical) services over commercial and private 3GPP networks to support standards-based communications interoperability between narrowband and broadband networks. 

    Q. How should operators handle private 5G slicing coming onto the public network? 

    This depends on the end user market and specific use cases. The most optimal approach is to combine sliced public network resources with dedicated physical network assets – for example, local cell sites, small cells or COWs (Cells-on-Wheels) for targeted RAN coverage and/or on-premises core network functions.   

    Q. Enterprises understand wi-fi – they don’t have 5G experts. How will WiFi 6/6E/7 impact private 5G and which is each tech better suited for? 

    It is a well-known fact that private LTE and 5G networks are likely to face competition from Wi-Fi and other non-3GPP technologies, which are continuing to advance with faster data rates, higher device densities and improved industrial-specific connectivity capabilities.  

    Based on feedback from enterprises, we view wider coverage radius per radio node, security features, reliability and high-speed mobility support as the key differentiators of private 5G networks, thereby making 5G better-suited for Industry 4.0 and critical communications-related applications.  

    However, 5G will face strong competition from Wi-Fi 6/6E/7 when it comes to horizontally-oriented digital transformation initiatives targeting offices, commercial buildings and business parks. 

    Q. What’s your view on unlicensed versus licensed 5G private? Which markets show the most promise with this in EMEA?  

    In EMEA, the vast majority of private 5G network installations are based on licensed spectrum. There is some hesitation associated with the adoption of unlicensed spectrum for private 5G networks, especially when suitable local area licensed spectrum options are available in many markets. However, there are a few exceptions. 

    In France, the DAT 5G (Democratizing Access to 5G Technology) project aims to develop a 5G NR-U connectivity and services platform to provide industrial SMEs, ETIs (Intermediate-Sized Enterprises) and local authorities with private 5G networks – operating in unlicensed spectrum – at a competitive cost. 

    In the UK, Ocado has pioneered the use of unlicensed private cellular networks in industrial settings. Specifically, the online grocer has developed an LTE-based wireless system – operating in unlicensed 5GHz spectrum – that provides improved connectivity to thousands of robots working concurrently across a warehouse environment to make up for the shortcomings in wi-fi. 

    Morocco’s national railway operator the Moroccan National Railways Office (ONCF) has deployed a Huawei-supplied LTE network – operating in unlicensed 5GHz spectrum – to support the Al Boraq service between Casablanca and Tangier, one of the first high-speed rail lines in Africa. 

    Q. What role will the hyperscalers play in delivering 5G private? 

    Hyperscalers are progressively extending the reach of their hybrid and private cloud offerings to serve workloads associated with private 5G service infrastructure – including mobile core network functions and some of the RAN components – as well as end user applications, particularly those requiring low-latency performance via edge computing resources. 

    Q. How much more defragmentation of spectrum needs to happen in EMEA before private LTE/5G can fly? 

    National regulators in the UK, Germany, France, Finland, Sweden, Norway, Poland, Bahrain, and other pioneering countries in EMEA have either released or are in the process of granting access to shared and local area licensed spectrum.  

    Additionally, sub-1GHz wide area spectrum – which is required for 3GPP-based critical communications broadband networks – is available in Ireland, Germany, France, Poland and many other national markets. We believe that sufficient spectrum will be available in most national markets by 2025, enabling private LTE/5G networks to thrive. 

    Q. How much will the future value of 4G/5G private networks depend on the integration of the IoT use cases over those networks? 

    Very highly, particularly for industries such as agriculture, construction, forestry, healthcare, manufacturing, mining, oil and gas, ports, utilities and warehousing.