A new report by Juniper Research has found that the enhanced capabilities of 5G are driving enthusiasm and awareness of private cellular networks, and that will bring annual spend on network hardware and services to almost $12 billion globally by 2023.
This, according to the report, represent a 116% growth from the $5.5 billion expected for 2021.
It noted that 5G deployments have a key role to play in the expected growth, saying that over 60% of base stations used in these deployments in 2023 will be 5G, thanks to its ultra-low latency, and signal propagation properties that allow deployment in environments where conventional networks struggle.
A private network is any network to which access is restricted. A corporate organization’s network or a network in a school are examples of private networks.
The new report, titled Private Cellular Networks: Spectrum Assessment, Business Models & Forecasts 2021-2026, also notes that these networks will be almost entirely business driven. The most prominent sectors will be manufacturing, mining, and the energy industry, which together account for 59% of spend in 2023.
Telcos risk losing out
The report however noted that, despite the dominant position of telecom operators in public cellular networks, they risk missing out on much of the private network market, as vendors are more likely to be the main hardware and service providers for such networks.
Juniper Research believes that telecommunications network vendors, like Ericsson and Nokia, are in the best position to capitalize on private networks; offering their hardware and value-added services directly to businesses looking to utilize private networks.
“With private networks frequently entirely separate from public networks, the role of traditional mobile network operators can be minimal in many cases”, remarked research author James Moar. “This means that hardware providers and systems integrators will play more dominant roles, given the right regulatory framework.”
Importance of Spectrum & Regulation
The report also notes that private network deployments are uneven globally, with the largest markets being those with the most open or flexible spectrum allocation.
Germany and the United States are among the most advanced in this; offering localized leasing and general spectrum availability. As a result, these two countries will account for 30% of global private network spend in 2023, although this will decline as other countries release spectrum for private network usage.
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