There is a lot of noise in the IoT world surrounding private networks and so TecFutures is digging deeper into the current reality and future uptake of private networks. They are being positioned as an innovate approach for the enterprise, particularly with the increasing uptake of 5G IoT services.
We recognize that enterprises find the ability to have private networks is a highly attractive proposition and see it as becoming increasingly important. Private networks offer several advantages to the enterprise. Greater availability is an attraction through higher speeds and increased bandwidth, coupled with low latency. They can be more reliable, flexible, scalable and efficient with better performance, easier configuration and ability to capture data. Improved security is another very important advantage which enterprises value.
There are some very clear emerging use cases and requirements, and we see particularly high levels of interest in sectors such as transportation, automotive, manufacturing and health care.
Private networks can be a complex undertaking for the enterprise, where IoT devices and applications need to integrate with particular technologies. Enterprises need to acquire spectrum from either a regulatory authority, MNO, or third party, and need the equipment that allows their IoT devices to connect over mobile network infrastructure.
Spectrum may not be readily available, and the enterprise may face regulatory hurdles in the deployment of private networks. Enterprises also need suppliers who can guide them through the design and implementation of private networks and those suppliers need to have experience with 5G and related technologies to ensure an effective rollout whilst not being tied into one vendor.
So, the demand is emerging but what are IoT CSPs thinking? Clearly, they see private networks as a significant part of their IoT offering and this importance will only grow over time, but private networks still represent a market that is emerging. The supply side of the market will have to provide extensive education to enterprises on why private networks are important and what benefits they offer, particularly in the context of 5G.
The reality of private networks does not necessarily match the hype from the CSP perspective. In the TecFutures IoT CSP survey, we find that 11% of the CSPs surveyed are currently offering private networks and the figure is higher for MVNOs at 13%. It appears that it is the larger global and regional players who are most prevalent in this market with only 8% single country CSPs currently offering this solution – which could be explained by the complexity of developing and offering a private network solution.
The private networks market is still immature but does have impetus from enterprises and from CSPs. It will continue to grow in importance in the coming years and represent an area of growth and opportunity. Enterprises need to undertake a robust evaluation of the capability of private networks and determine how it can play a role in their IoT deployments.
Suppliers should recognise that guidance and education are critical if they want to maximize opportunities in the private network space and should refine their approach to current and future customers.