Private LTE/5G networks: a framework for understanding the ...
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Private LTE/5G networks: a framework for understanding the opportunity
Private LTE/5G networks: a
framework for understanding
the opportunity
Caroline Chappell and Michele Mackenzie
Private LTE/5G networks: a framework for understanding the opportunity
WHO SHOULD READ THIS REPORT
KEY QUESTIONS ANSWERED IN THIS REPORT
About this report
2
This report analyses current and emerging deployment models
for private LTE/5G networks.
We examine the rationale for private LTE/5G network adoption,
the network models, and the buyer and supplier landscape. It
complements two reports already published by Analysys Mason
on how operators can maximise value from the private network
opportunity and the private LTE/5G network strategies of selected
operators, systems integrators and vendors.1 This report
establishes a framework for assessing the opportunity and
includes:
▪ market context: analysis of key demand and supply side
drivers, the spectrum landscape and market sizing
▪ network models: analysis of deployment models and how
they address different enterprise requirements
▪ adoption trends: analysis and mapping of each network
model to the types of enterprises and verticals.
The report provides implications for buyers and suppliers of
private LTE/5G solutions. It is based on several sources:
▪ interviews with stakeholders in the operator, vendor and
systems integrator markets
▪ Analysys Mason’s internal research on the private LTE/5G
market such as our Private LTE/5G networks tracker.2
▪ Operators, vendors and systems integrators (all suppliers)
that want to understand the market dynamics for private
LTE/5G networks and why this opportunity is emerging now.
▪ All suppliers that want to understand the network
deployment models.
▪ All suppliers that want to understand the adoption trends
and mapping of enterprise segments/verticals to each
model.
▪ What are the different network models for private LTE/5G
and how do they differ?
▪ What are the advantages and disadvantages of each
network model?
▪ What are the early adoption trends for each model and how
do the models map to enterprise segments and verticals?
▪ What is the size of the private LTE/5G network market?
1 For more information, see Analysys Mason’s Private LTE/5G networks: operator strategies and Private LTE/5G networks:
operator and vendor profiles and analysis.2 For more information, see Analysys Mason’s Private LTE/5G networks tracker.
Private LTE/5G networks: a framework for understanding the opportunity
ContentsExecutive summary
Research overview
Market context
Network models
Dedicated/on-premises network model
Private/public hybrid network model
Public industrial network model
Appendix
About the authors and Analysys Mason
Private LTE/5G networks: a framework for understanding the opportunity
Enterprises will spend USD9 billion on private LTE/5G networks
over the next 5 years, laying an important foundation for
industrial transformation.
This report examines the private LTE/5G networks market and
establishes a framework to analyse the opportunity. It includes
the following sections.
▪ Market context: analysis of key demand and supply-side
drivers, the spectrum landscape and market sizing.
▪ Network models: analysis of deployment models including:
― how the models address enterprise requirements
― analysis and mapping of each network model to the types
of enterprises and verticals.
Figure 1: Framework for private LTE/5G networks
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Executive summary
KEY IMPLICATIONS
1. The private LTE/5G network market is highly bespoke and
fragmented. Suppliers and buyers need to understand the
main drivers and size of this opportunity.
2. Three deployment models serve the heterogenous private
LTE/5G network market. Each model has advantages and
disadvantages for buyers.
3. Suppliers’ objectives are to maximise revenue from the
private LTE/5G network market. The value that each model
can bring will depend on the supplier’s assets and skills. Source: Analysys Mason
Dedicated/on-premises Public industrial
Private/public hybrid
Enterprises that
have had digital
transformation
strategies
underway for the
past 1–3 years
Market context
Network deployment models
1 3
54%USD9
billion
Cumulative
capex and opex
spend on
private LTE/5G
networks
2019–2025
2
Private LTE/5G networks: a framework for understanding the opportunity
ContentsExecutive summary
Research overview
Market context
Network models
Dedicated/on-premises network model
Private/public hybrid network model
Public industrial network model
Appendix
About the authors and Analysys Mason
Private LTE/5G networks: a framework for understanding the opportunity
Suppliers need to articulate to buyers how private LTE/5G networks can address
industrial sector requirements
The private LTE/5G networks market is heterogenous.
All aspects of the market are varied (see Figure 2). For example,
on the supply side spectrum regimes vary by country, which may
also determine which suppliers have more influence. On the
demand side, private LTE/5G network requirements vary
according to the industry. Buyers and suppliers of private LTE/5G
networks should evaluate the opportunity in the context of:
▪ Use cases: enterprises deploy digital technologies to
automate processes, increase productivity and quality, and
reduce costs.
▪ Devices: devices are out of scope of this report but networks
need to support devices that will differ in terms of
computing power, bandwidth and mobility requirements.
▪ Spectrum: availability of industrial and shared spectrum
varies by country. These options affect barriers to entry for
new suppliers (in addition to MNOs).
Network requirements: network size can vary across small
buildings (several 1000m²) to large mines (several km²). Factors
such as network density, throughput and roaming will depend on
number of devices and use cases.
Industries: the drivers for adopting a private LTE/5G network will
differ by industry and will depend on multiple factors such as
digital transformation priorities, brownfield or greenfield site
deployments and current networks installed.
Figure 2: Heterogenous private LTE/5G market
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For private networks to scale, standardised network
components and platform models will need to emerge.
Vendors are building scalable, cloud-based network functions for
enterprise deployment. Slide 11 analyses in more detail
developments in this area. There is also a need for new delivery
models that deliver components of the private LTE/5G network in
a software-as-a-service model to facilitate adoption. However,
there will always be an element of bespoke integration in
delivering the private network.
Spectrum
Devices
CoverageThrough-
put
Device
densityRoaming
Network
require-
ments
Use casesReal-time
monitoringSurveillance
Communi-
cations
Worker
safety
Industries
IndustrialPublic
(mobile)Shared
Cost by
country
Private LTE/5G networks: a framework for understanding the opportunity
Three main network models have emerged to accommodate
the diverse requirements for industrial networks and position
cellular as a challenger to existing technologies such as Wi-Fi.
This report analyses three network models for private LTE/5G
network deployments and provides a framework for assessing the
advantages and disadvantages of each. The report has two main
sections.
▪ In the first section we discuss the context and
background for private LTE/5G networks, the supply-side
and demand-side drivers, the potential size of the market
and why new approaches to spectrum are lowering
barriers for new suppliers but also for buyers of private
networks.
▪ In section two, we define three private LTE/5G network
models (see Figure 3). We evaluate the best fit for each
model to support industrial enterprises’ key technical and
commercial requirements and provide a framework for
comparing each model based on drivers and challenges.
We also map each model to the enterprise segments and
verticals that they are best-placed to support. We show
current adoption trends highlighted with enterprise
examples but also indicate future trends.
Figure 3: Three private LTE/5G network models
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Research framework: three main network models address diverse enterprise
requirements
Dedicated on-
premise
Public/private
hybrid
Dedicated/on-
premises
Private/public
hybridPublic industrial
Fully dedicated
on-premises
model
Multiple
variations of
MNO network
assets (RAN and
core) combined
with on-
premises assets
Public multi-
tenanted
network
dedicated for
industrial use
USD9 billion opportunity for suppliers
2019–2025
Private LTE/5G networks: a framework for understanding the opportunity
Implications
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1The private LTE/5G network market is highly bespoke and fragmented. Suppliers and buyers need to
understand the main drivers and size of this opportunity.
The private LTE/5G network opportunity is complex because all aspects of the market vary; industrial
requirements for network connectivity differ by sector and use case. The supply-side market landscape is also
diverse; spectrum regulation differs by country as does the vertical opportunity.
2Three deployment models serve the heterogenous private LTE/5G network market. Each model has
advantages and disadvantages for buyers.
To determine best fit for their business, enterprises need to map their requirements – both technical and
commercial – to the different types of model. For example, enterprises that have stringent privacy requirements
may conclude that a dedicated/on-premises model is the best fit despite higher associated costs.
3Suppliers’ objectives are to maximise revenue from the private LTE/5G network market. The value that each
model can bring will depend on the supplier’s assets and skills.
Suppliers will deploy network models that best suit their assets and skills so that they can maximise value and
compete more effectively to deliver on enterprise needs.
Private LTE/5G networks: a framework for understanding the opportunity
ContentsExecutive summary
Research overview
Market context
Network models
Dedicated/on-premises network model
Private/public hybrid network model
Public industrial network model
Appendix
About the authors and Analysys Mason
Private LTE/5G networks: a framework for understanding the opportunity
Michele Mackenzie (Principal Analyst) is an analyst for Analysys Mason’s IoT and M2M Services research programme, with responsibility for
M2M and LPWA forecasts. She has 20 years of experience as an analyst and conducts research on IoT verticals such as utilities, automotive,
healthcare and fleet management. She also writes reports on the role of network technologies such as NB-IoT.
About the authors
33
Caroline Chappell (Research Director) heads Analysys Mason’s Cloud and Platform Services practice. Her research focuses on service
provider adoption of cloud to deliver business services, support digital transformation and re-architect fixed and mobile networks for the 5G era.
She is a leading exponent of the edge computing market and its impact on service provider network deployments and new revenue
opportunities. She monitors public cloud provider strategies for the telecoms industry and investigates how key cloud platform services can
enhance service provider value. Caroline is a leading authority on the application of cloud-native technologies to the network and helps
telecoms customers to devise strategies that exploit the powerful capabilities of cloud while mitigating its disruptive effects.
Private LTE/5G networks: a framework for understanding the opportunity
CONSULTING
We deliver tangible benefits to clients across the telecoms
industry:
▪ communications and digital service providers, vendors,
financial and strategic investors, private equity and
infrastructure funds, governments, regulators, broadcasters,
and service and content providers.
Our sector specialists understand the distinct local challenges
facing clients, in addition to the wider effects of global forces.
We are future-focused and help clients understand the challenges
and opportunities that new technology brings.
RESEARCH
Our dedicated team of analysts track and forecast the different
services accessed by consumers and enterprises.
We offer detailed insight into the software, infrastructure and
technology delivering those services.
Clients benefit from regular and timely intelligence, and direct
access to analysts.
Analysys Mason’s consulting services and research portfolio
34
Analysys Mason’s consulting and research are uniquely positioned
Private LTE/5G networks: a framework for understanding the opportunity
Research from Analysys Mason
35
Private LTE/5G networks: a framework for understanding the opportunity
Consulting from Analysys Mason
36
Private LTE/5G networks: a framework for understanding the opportunity
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JANUARY 2021