Private wireless networks are not new. Many are already in use in industries such as oil and gas and mining, in factories, and at airports and seaport terminals.
The notion of a “private” network is changing, however. On the demand side, new applications and use cases are developing among Enterprises as they digitalize their operations to handle a wide range of information technology (IT) and operational technology (OT) functions at a high security level.
At the same time, telecom equipment manufacturers led by Ericsson (NASDAQ: ERIC) and Nokia (NYSE: NOK) are introducing new technical capabilities in both 4G LTE and 5G that enable private network configurations for various Enterprise operating requirements and budgets.
The notion of a fully private, on premises autonomous network involves placing equipment inside a building, on a campus, in a factory or at an industrial site. A private network utilizes wireless infrastructure that is separate from the public cellular network and is managed by the Enterprise.
Architecturally, private wireless networks involve dedicated spectrum, dedicated infrastructure, and dedicated devices.
Dedicated spectrum can be licensed or unlicensed, with the licenses either owned or leased. In recent years, oil and gas companies such as Chevron participated in the 700 MHz and 3.5 GHz CBRS PAL auctions along with utilities like Southern California Edison that also won 3.5 GHz CBRS PAL licenses.
These organizations bought spectrum for proprietary use in their respective operating territories. In commercial transactions, Anterix (NASDAQ: ATEX) is selling 900 MHz licenses for specific use among utilities across the U.S. (See, Utilities’ Growing Interest in Private LTE Networks)
Dedicated infrastructure involves the Enterprise deploying its own RAN (radios and antennas) on towers located at select points around a site or a facility to ensure maximum signal coverage and throughput. The RAN connects to a dedicated Core that can be located on site or remotely if more than one geographic site is involved.
The Core provides all the network’s key functions including managing the devices in use on the network, voice and data call routing and connecting to an Enterprise’s private cloud or to the public internet as well as interacting with public cellular networks via network Cores.
In a 4G LTE cloud-native private network, an edge cloud server on the customer premises can perform some distributed core functions to improve latency and reliability, or to ensure complete data confidentiality.
All network functions – Core, management elements, applications – are deployed locally at a specific site. If wireless services are needed at more than one site, all network functions can be centralized with an application edge cloud server deployed at each site to improve reliability and latency.
Dedicated mobile devices are programmed to work exclusively on that network. These devices include smartphones equipped with programmable eSIMs (see, Adapting Mobile Devices to Private LTE CBRS Networks) that allow them to work alternatively between the public cellular network and private network as people move between the two.
Similarly, dongles can be programmed for enabling laptops and tablets to work on the private network. Furthermore, the private network supports myriad IoT sensors that monitor specific Enterprise functions or equipment integral to the operation.
With the ability to distribute Core functions, there are different private network deployment options.
A hybrid private wireless-as-a-service is offered by both Ericsson and Nokia through their major communication service provider (CSP) customers. Here, most Core routing elements and all applications are deployed using an on-site edge cloud server while the network management elements are hosted in a CSP or third-party provider cloud.
With 5G, the concept of network slicing is becoming significant. Network slicing takes place in the Core software and can be a CSP 5G-hosted solution. In a private network application, a minimum of Core elements and applications are deployed at the Enterprise site to ensure reliability and low latency, and to maintain data confidentiality. The remaining Core elements and applications run in the CSP cloud and rely on existing cloud core management functions.
Ericsson is pitching its Private 5G offer while Nokia is selling a combination of its Digital Automation Cloud and Modular Private Network concept.
For both companies, the Enterprise business is a minor albeit growing portion of revenues. In its 1Q21 results, Nokia reported that its Enterprise sales grew 18 percent on a year-over-year constant dollar basis even though Enterprise accounted for only 7 percent of its US$6.2 billion total sales in the quarter. Nokia’s CSP sales accounted for 81 percent of that total but grew by just 7 percent YoY.
With private network solutions, both manufacturers are supporting their primary CSP customers in new applications with potential new revenue streams while serving Enterprises directly if these companies choose to operate their own networks.
By John Celentano, Inside Towers Business Editor
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