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The Private 5G Battle Roars Into EC 2022
It is auspicious that Mobile World Congress (MWC), the cellular industry’s main event for the year, came just three weeks before our own Enterprise Connect in Orlando, where I will be presenting at “Mobility Update: Sizing Up 5G (And Alternatives) in the Real World.” The prospects for private 5G (P5G) networks for enterprises were a major point of discussion at MWC. That is understandable given that P5G, along with cellular fixed wireless access (FWA), are seen as the two main new revenue opportunities to sprout from the deployment of 5G New Radio (5G NR).
According to Statista, annual revenues for the three Tier 1 US cellular carriers in the 2020 was just north of $230 billion. That means the operators will have to sell a lot of P5G and FWA to have any material impact on their overall performance. In the meantime, consumers clearly haven’t been blown away by what 5G has delivered, and investors are looking for some return on this massive investment in spectrum and equipment upgrades.
Frankly, in the bizarre business of cellular wireless, I can’t see any reason why anyone should expect higher revenues or profits from 5G in its current form. The carriers spent billions of dollars on equipment upgrades and billions more on mid-band spectrum to augment their networks and increase transmission rates, but none of them raised their prices. Instead, they started offering discount plans on Apple and Samsung phones to keep from losing customers!
Private 5G: So What’s In It For The Enterprise?
From an enterprise buyer’s standpoint, the carriers’ FWA offerings might offer a workable alternative for internet access for telecommuters and small locations, but if its promises to streamline industrial internet of things pans out, P5G could deliver a much bigger payoff in overall business operations. Certainly the analyst estimates of the potential impact have been off the charts, though their validity might be questioned.
Recognizing a potential opportunity, it seems everyone wants to get into the P5G business. We can start with the big mobile infrastructure providers, Nokia and Ericsson, who have been involved in many of the trials in Europe. Our own mobile operators, certainly Verizon and AT&T, have cranked up their P5G offerings, though their approaches seem quite different. Both companies will be represented on our Mobility Update panel.
Not surprisingly, traditional enterprise suppliers Cisco and HPE also made P5G announcements at MWC. As neither of those companies had significant depth in the cellular radio access network (RAN), they partnered with companies like Airspan and JMA Wireless to build their P5G offerings.
What Cisco and HPE do have is a 5G core, the cloud-based element in the P5G network that provide the user services like connecting phone calls and ensuring QoS for data services. Importantly, most of these core options are of the standalone (SA) variety, which means they support services like ultra-low latency and massive M2M, not yet available in public 5G.
Airspan is a name that shows up in a lot of these offerings including those from Cisco and HP. The company has been a supplier in the cellular infrastructure market, and was an early mover in the shift to small cells, and technologies like Open RAN (O-RAN) and network virtualization. O-RAN is built on the idea of using lower-cost interchangeable, standards-based radio hardware operated by a cloud-based controller. The approach has been catching on in the carrier environment, particularly with start-up carriers like Rakuten Mobile in Japan. O-RAN is key to the flexibility needed for P5G deployments, and will likely be a component in most offerings.
If that’s not enough, the hyperscalers like Microsoft Azure and AWS have gotten more deeply into the cellular infrastructure with the carriers shifting more functions to the cloud, and the cloud providers are now involved in partnering to deliver mobile edge computing (MEC). AWS has gone one step further and is planning its own P5G offering.
A “Private Network” or A Private Network-as-a-Service (NaaS)
One theme that runs through most of these offerings is that they will be packaged as network as a service (NaaS) offerings. The original assumption among enterprise users was that P5G would take the same track as Wi-Fi – the customer works with a systems integrator to design the solution, map out the radio coverage, buy, install, and test the equipment, but after the initial implementation, the customer owned it and ran it. All of the Wi-Fi access points connected through the wired LAN infrastructure, so the Wi-Fi was viewed as an extension of the local network.
From that viewpoint, Celona Networks seemed to have the inside track to an enterprise-focused option for P5G, as its architecture meshed with enterprises’ existing Wi-Fi infrastructures. While Verizon has partnered with Celona for one of its P5G offerings, the preponderance of P5G solutions appear to be going the NaaS route with equipment designed for the carrier infrastructure market rather than the existing enterprise LAN/Wi-Fi market.
The concern we had about treating P5G like Wi-Fi was the time and cost involved getting the people who maintain our Wi-Fi networks up to speed on the cellular radio technology they would have to maintain and troubleshoot on a P5G network. With a private network, IT takes responsibility for customer satisfaction.
A NaaS approach provides an effective end-run around the staffing and training issues with an offering that effectively says:
- We will design the network for your specific applications and requirements.
- We will do the site surveys, layout the access point (i.e. eNB/gNB) locations and backhaul connections. The cloud-based RAN controller includes a self-organizing network (SON) capability, so a lot of the channel assignment, power adjustment, and failure/recovery is done automatically by the platform.
- We will configure, deliver, install, and test all of the components.
- We will then guarantee to maintain the network at that level of performance on an ongoing basis.
- The customer is typically provided with a portal that will allow them to do day-to-day operations tasks like adding/deleting users, defining QoS parameters, monitoring network availability and the like, but if something breaks, the provider fixes it.
Early signals indicate that the contract terms will include an out-front cost for the equipment, installation and set-up and some type of ongoing monthly charge. There will likely be a range of contract options including the ability to spread the upfront charge over the life of the contract.
More importantly, we will be entrusting the satisfaction of our users to an outside party, so we will have to look closely at the contract terms concerning performance, response, and user satisfaction.
Enterprises will have many more wireless networking options on the table as we go through 2022, and even more options as to how we deploy them. Enterprises have been largely successful with their private Wi-Fi deployments, but we have to see how amenable they will be to the NaaS concept. After all, it’s the internal networking group that’s going to be taking the calls if this P5G thing doesn’t perform as advertised.
The move to the cloud has been normalized in the minds of enterprise buyers, as they have navigated through the migration of IP PBXs, unified communications and contact center platforms to the cloud. However, in those cases we were essentially taking processor functions that were performed on servers in our data centers and moving them to servers in the cloud data center.
With a P5G NaaS offering, the provider is proposing we allow them to deliver a complete wireless service in our facility, and then they take over the responsibility of making our users happy. We have had systems integrators that offered this type of service particularly for Wi-Fi service in hotels, but NaaS will be a new life experience for most enterprise users.
So, as we approach Enterprise Connect ’22, the P5G market is rapidly transitioning from the white paper to stage to a serious evaluation of where and how this technology might be used to solve real world requirements. Besides a new technology however, the whole idea of the NaaS arrangement will have to be thought through.
We’ll be talking through all of these options and key points for customers to consider in our Mobility Update : Sizing Up 5G (and Alternatives) in the Real World session Monday, March 21, at 10:15 A.M. There’s still time to join us – we hope to see you there.