Why Is 5G Private Network Adoption Slow?

Analyst firms have consistently forecast that 5G mobile networks will command significant growth in terms of deployments and spend but the reality has failed to match those bold assumptions on growth. So what’s going wrong?

The primary motivations for this adoption include operational efficiency gains, support for digital transformation initiatives and the replacement of legacy networks. Nevertheless, significant barriers persist, notably the high costs and complexity associated with deploying and managing private networks, and a shortage of affordable 5G-IoT devices to leverage those networks.

The adoption of 5G private networks will be primarily driven by industrial sectors such as manufacturing, transport, and mining, with manufacturing alone expected to account for over half of all deployments in the coming years. 

So what should CSPs do? For broader market penetration, especially among SMBs, CSPs should focus on reducing costs and simplifying deployment processes. While steps are being taken towards flexible pricing and hybrid deployment models, widespread adoption across the market will require continued efforts to make 5G private networks more accessible and manageable for smaller enterprises.

To achieve the growth forecast by analysts, there is a clear need for standalone 5G and the development of a comprehensive 5G device ecosystem. Collaboration among various organizations is essential, as no single entity can dominate the market or deploy all private networks independently. The availability of advanced 5G devices is crucial for enhancing business outcomes, ultimately driving the adoption and success of private 5G networks

Key actions that CSPs need to take to grow the 5G private networks market more rapidly include:

• Simplify Deployment: Create a one-stop shop for customers to reduce the complexity and challenges associated with integrating multiple solutions.

• Develop Managed Solutions: Offer managed services that encompass the design, delivery and ongoing management of private networks to alleviate the complexity for enterprises.

• Expand Spectrum Access: Ensure the provision of mobile operator spectrum necessary for the effective deployment of private networks.

• Collaborate Across Ecosystems: Work with other organizations to foster a collaborative approach, recognizing that no single entity can dominate the market or handle all deployments independently.

• Advance the 5G Device Ecosystem: Drive the development and availability of 5G-IoT devices to enhance business benefits and outcomes, making the technology more attractive and feasible for enterprises.

Market development takes time and it’s important to move away from technology hype to addressing real enterprise business needs.