As we kick off the year 2024, it’s a fitting time to reflect on the impressive progress made in private cellular networks over the last year. The utilization of private 4G and 5G networks has skyrocketed across industries seeking more control, security, and performance from their connectivity. Numerous verticals began to leverage the benefits of operating self-contained mobile networks tailored to their unique needs. As private networks continue reshaping enterprise connectivity, 2023 undoubtedly marks a milestone representing massive maturation for the space. In this blog, we’ll look at a few key takeaways from our recently published State of the Market 2023 for Private Networks report and explore the key developments that defined the advancement of private networks over the past year and how they might shape their trajectory into 2024 and beyond.
New verticals and use cases emerge: In 2023, the deployment of private networks continued to extend beyond manufacturing, with education, research, transportation, and urban services emerging as key sectors driving adoption. These industries sought dedicated and secure communication solutions for automation, industrial research, and smart city initiatives. Sectors like mining, utilities, and oil & gas recognized the advantages of private networks for critical applications. Sports, entertainment, and broadcasting emerged as significant markets. Private LTE & 5G networks also gained traction in temporary setups, preferred over Wi-Fi.
Mobile operators gain prominence: Mobile operators are increasingly emerging as the primary beneficiaries of the growing deployment of private LTE/5G networks. Mobile operators are leveraging their IoT expertise and early market entry, ownership of spectrum leasing, and collaboration with network equipment providers. Leading operators in the US and across the globe are actively embracing and shaping the private networks market.
Private 5G ecosystem expands: Recent industry developments underscore the drive to establish a comprehensive and accessible private 5G ecosystem, with tech vendors addressing market gaps to boost enterprise adoption. Major smartphone manufacturers, including Apple, Samsung, Google, LG, Zebra, and Motorola, now offer devices compatible with private 5G, LTE, or CBRS networks. 2023 also saw the launch of various non-phone devices like in-vehicle routers, laptops, drone cameras, and dongles with built-in compatibility with private 5G and CBRS. Apple’s support for private 5G networks in its iOS 17 operating system was one of the year’s most significant developments.
Managed services & neutral host models gain traction – The managed services or OPEX-based “Network as a Service” model is emerging for private 4G/5G networks. The neutral host model is gaining prominence. Several developments in 2023 underscore the growing importance of these models in driving the widespread adoption of private networks. The managed services or OPEX-based model simplifies the deployment and management of private 5G networks for businesses.
Shift in focus from standalone products to holistic integration: The industry saw a shift in focus from standalone products to holistic integration. Integration issues have emerged as a significant roadblock in harnessing the full potential of private 5G networks for enterprises. Initially, the industry anticipated that private wireless networks would be predominantly product-driven, fueled by open wireless ecosystems and cloud solutions.
5G SA and network slicing gain traction: As more mobile network operators deploy 5G Standalone (SA), we see a growing traction of 5G SA private networks. Several recent developments and announcements underscore the increasing recognition of 5G SA to transform how enterprises operate, offering high-speed, low-latency, and reliable connectivity for a wide range of applications. This trend is poised to reshape the private network landscape and drive innovation in various industries. With the growing commercialization of 5G SA networks, network slicing-related activities ramped up during the past year.
Edge computing is becoming integral to private 5G: Private 5G is progressively integrating with edge computing. Major vendors and mobile operators are taking various approaches to make edge computing an integral component of private 5G solutions. Their efforts range from software-defined edge technologies and global collaborations to AI-enhanced edge capabilities and strategic integrations with leading cloud providers like AWS. This signifies a growing recognition of the synergy between private 5G and edge computing for delivering advanced and flexible solutions to enterprises.
Many challenges remain: In many markets, lack of spectrum is the biggest hindrance to the widespread adoption of private networks. The allocation of mid-band and high-band spectrum in several countries is gaining momentum, crucial for the optimal performance of private networks. Moreover, while the LTE/CBRS private networks device ecosystem is expanding, the 5G counterpart remains constrained. Integration challenges further compound the situation as system integrators struggle to achieve seamless interoperability among equipment from different vendors. Additionally, private network providers encounter persistent obstacles in integrating their networks with existing IT systems, contributing to the overall slowdown in adoption.
The year 2024 is upon us: As we look ahead to 2024 and beyond, the future remains bright for private cellular networks. With expanded use cases and verticals, a growing ecosystem of enabling technologies, and new business and deployment models, private networks are poised to continue reshaping enterprise connectivity. Key developments on the horizon include further expansion into new industries, the rollout of 5G standalone networks with slicing capabilities, tighter integration with edge computing and cloud solutions, and easier interoperability between multi-vendor equipment. While challenges around spectrum availability, device ecosystem constraints, systems integration, and more remain, collective industry efforts to address these gaps instill optimism. With private network providers, operators, and technology vendors working in tandem to unlock innovation potential, we foresee private LTE and 5G adoption accelerating across the globe. The stage is set for private networks to transform how organizations operate at scale and drive immense economic value in the coming years.
Click here to read our annual State of the Market 2023 for Private Networks report.
