The cost and complexity of a private cellular network deployment and integration with existing IT infrastructure remain the biggest barriers to the adoption
Technology vendors, MNOs, and hyper-scale cloud infrastructure service providers have announced and launched scores of private wireless offerings in the past few years. According to Analysys Mason, during the past year, there has been an increased momentum around the deployment of private 5G networks – in 2022, over 70% of the new private networks announced were using 5G. However, despite the positive market momentum, enterprises’ adoption of private networks has been slower than anticipated. Prominent industry players have openly acknowledged this fact.
High cost is the most significant barrier
For most enterprises, the high cost of a private 5G network is possibly the biggest show-stopper. Many enterprise IT leaders are interested in deploying private networks but find the costs prohibitive, especially compared to the more ubiquitous, easy-to-deploy, easy-to-maintain Wi-Fi networks. Private 5G networks require a significant upfront infrastructure, maintenance, and operation investment. Organizations must often purchase and install their radio access equipment, core network, and backhaul infrastructure. Private 5G network deployments also require significant planning and coordination, which can be challenging for organizations with limited resources. Additionally, they must hire specialized staff to operate and maintain the network. For smaller organizations, the cost of deploying a private 5G network can be prohibitive, making it challenging to justify the investment.
Many enterprises are willing to pay a premium price for private cellular networks catering to mission-critical venues. However, such venues may have limited scope and can be isolated from mainstream enterprise IT. For more extensive and widespread deployments, the cost of deployment would need to be closer to other options, such as Wi-Fi 6.
Integrating 5G technology with legacy systems is a significant challenge
Another significant obstacle to private network implementation is integrating 5G technology with legacy systems or the existing IT infrastructure and networks. In fact, for many enterprises, integrating 5G technology with legacy systems and networks is the most common barrier to private network implementation.
Organizations must ensure that their private 5G network integrates with their existing IT infrastructure, including their applications, databases, and security systems. Additionally, organizations must ensure their private 5G network can interoperate with other networks and devices, such as public 5G networks, Wi-Fi, and IoT devices. This process can be complex and challenging, as 5G may not be inherently compatible with existing systems. Consequently, companies may need to invest additional resources and expertise to ensure the seamless integration of these technologies. This barrier may prolong the adoption of private networks, particularly for organizations with limited resources and expertise.
Private network solutions are highly customized and complex
Organizations must ensure that their network is designed to meet their specific needs, which requires a deep understanding of their operations and requirements. This means that private network solutions must be highly customized and complex, limiting their scalability. Often, only large corporations possess the resources and capabilities necessary to deploy such solutions. Small and mid-sized enterprises, on the other hand, lack the resources and capabilities to invest in these complex solutions.
Deploying a private 5G network is a complex process that requires specialized knowledge and expertise
Deploying and operating a private 5G network requires specialized talent – experts with a good understanding of IT and telecom networks. It’s challenging to find people with competencies in both the IT and telecom domains. Even if an organization can find them, it could be challenging for them to retain such talent. Additionally, these professionals command high salaries, making it challenging for smaller organizations to compete with larger organizations for talent.
Private 5G networks face regulatory and compliance issues in many countries
Deploying a private 5G network can also present regulatory issues. In many countries, organizations must obtain licenses to operate their own private 5G networks. Additionally, organizations must comply with a range of regulations related to data privacy, security, and electromagnetic radiation. Non-compliance with these regulations can lead to penalties, legal repercussions, and damage to an organization’s reputation. To adhere to these regulations, specialized knowledge and expertise are required, which can pose a challenge for organizations with limited resources.
There’s no doubt that the enterprise interest in private networks is growing. So is the understanding of these networks’ value to enterprise digitalization efforts. However, the cost and complexity of a private cellular network deployment and integration with existing IT infrastructure remain the biggest barriers to adopting these networks. Moreover, for most organizations deploying a private 5G network can be a challenging and complex process. Lowering these barriers will be critical to the broad-based adoption of private 5G networks.
