Private 5G networks – Options for MNOs

It ties in with the telecoms industry’s view of monetising B2B “verticals” for new 5G investments and is also often aligned with discussions about network slicing and edge-computing. It parallels trends in industrial transformation, Factory 4.0 and post-pandemic recovery funding for national infrastructure and businesses.

All of this goes beyond the normal public service-type subscription models traditionally offered by carriers/MNOs (mobile network operators). It instead overlaps with some of the ownership and operation models more common for corporate Wi-Fi and IT/cloud – illustrated by Amazon's recent announcement of AWS Private 5G. In industrial settings it also fits alongside other specialised wireless technologies and OT (Operational Technology) systems.

While the advent of 5G – and especially its applicability to industrial IoT (IIoT) has catalysed focus on this area of private and vertical networks, many people are surprised to discover that the sector actually has a 20+ year history. The author of this blog first saw a GSM picocell, intended for enterprise deployment, in 2001. Private networks have been deployed on oil rigs, military bases and large ships for many years. A special version of cellular technology called GSM-R is widely used for railways’ connectivity needs. Small “edge” core network elements for such deployments have been available since 2005 or even earlier.

But 5G changes the game significantly. Firstly, its ability to handle high-performance and low-latency applications makes it significantly more attractive - beyond just a few specialised niches. Perhaps an even greater "democratising" factor is the virtualisation and cloud-based trajectory of 5G core networks and the management/orchestration layer.

But also the timing is important – 5G is emerging at the same point that enterprises are connecting many more devices and systems, collecting and acting upon gigabytes of sensor data, exploiting machine-vision, AI and robotics, and looking to increase flexibility and modularity of their assets – as well as productivity and safety of staff. Reliable wireless connectivity is essential in modern ports, warehouses, factories and hospitals – as well as consumer-related locations such as sports venues or entertainment resorts.

Larger-area users such as utilities, public safety agencies and railways are also demanding ever-more connectivity options, often with even higher reliability and security requirements than most MNOs.

Private networks (rather than standard public MNO services) are demanded by enterprises for a number of reasons:

• Coverage: many businesses operate in areas outside the normal population centres, such as industrial zones, remote regions or even offshore or underground. These are often underserved by national MNOs. They may also need enhanced coverage indoors or on-campus, especially in areas with lots of metalwork.
• Control: enterprise applications may need specific localised network capabilities such as ultra-low latency, or extra high-capacity uplink for video cameras, which need customised radio configuration. Moving objects may require redundant connections and emergency-stop capability for safety reasons. There may be a desire to keep sensitive data on-premise, or for local 5G identity methods to coordinate closely with IT security practices.
• Cost: there is little appetite for businesses to pay per-GB for mobile data traffic, especially on their own sites. Owning a private network (or agreeing a special deal with an MNO) can change the cost model significantly. Others may be concerned more about liability and the cost of operational downtime if a network fails, so are willing to take ownership of networks for risk-mitigation and compliance reasons.
• Cloud: Many possible private 5G use-cases align with cloud/virtualisation of specific applications. Data collected from industrial automation and wireless sensors may be used in digital twins, or analysed with AI tools. Realtime operations and global supply-chain management systems may be linked directly to onsite networks and devices. IoT systems may be controlled via edge servers. There may be benefits in integrating the cloud and network platforms – as the AWS Private 5G solution is attempting to catalyse.
• Customers: Some private networks are intended as “micro-MNOs”, with the enterprise selling on connectivity or other services to local tenants. For instance, a private network on a cruise ship may sell wireless services to passengers, or a university could provide private-network SIMs to staff and students.

In short, there is a growing demand for private (or virtual-private) connectivity options for enterprises and governments, with extra features, customisations and a range of ownership/business models. This is similar to what has been seen in the past with corporate data networks or voice/unified communications systems – or even supply of electricity to industry, with its mix of grid-based power and private onsite generators.

Dedicated networks vs. Network-slicing

Often the term “5G private networks” leads to an assumption that there are two only options for delivery of these capabilities:

• A separate and dedicated network built for an enterprise, either created internally or provided by a systems integrator. This may use local or shared spectrum bands or rely on an MNO’s normal frequency allocations. Software network functions (such as the core) may be on-site, near-site at an edge datacentre, or in the cloud.
• An extension or “slice” of an MNOs’ main public 5G network, configured to the enterprise needs and running in the operator’s mainstream spectrum. Some telcos use terms such as “campus network” or “non-public network” to describe their private network services.

The latter option usually has a few variations suggested. It may be necessary to add extra dedicated network coverage (for instance inside a building or factory), or to cede some form of control to the enterprise such as ownership of the user/device identities, or allowing local breakout of data traffic. Depending on the 3GPP version deployed in the MNO’s main network, it may need a separate core supporting more vertical-optimised features for the enterprise.

Originally, the mobile industry expected MNOs to be in the driving seat for 5G private networks via slicing, even though local 2G-4G systems were often run independently. However, the last two years have undermined that assumption to a fair degree. Many in the industry have been surprised by the appetite for enterprises to deploy their own 4G/5G systems, as well as a huge wave of systems integrators and vendors emerging to cater to them.

There is still a lot of involvement by telcos as well with enterprise / private networks, although often this has been more as integrators of the same style of custom deployments, rather than offering slices of the main macro 5G networks. Interestingly, this model has even allowed fixed operators, as well as MNOs, to participate in the private 5G market. (For instance, Verizon Business operates a 5G network for the Port of Southampton in the UK – a country in which it does not operate public mobile services).

There are numerous reasons for this, although one of the drivers has been much better local spectrum availability (such as the CBRS band in the US, or various other options in markets like UK, Germany, Japan and France). This, together with the desire in enterprise to push faster towards 5G Standalone and later Release 16/17 features, has led to a focus on alternatives to the (delayed) network slicing vision.

A further issue has been the need for industries to be serviced by sector-specialists familiar with the key applications, legacy systems and business practices/regulations. Telcos typically only have deep knowledge of a few verticals, and so need to pursue partnerships or develop new expertise inhouse. Other factors have included the need for “hard” service level agreements (SLAs) and a desire for greater customisation than is normal MNOs.