A Market Ripe for Private LTE Networks

Conceptually, private mobile networks function similarly to Wireless Local Area Networks (WLANs), with flexibility, coverage, and cost-savings providing them with a major advantage over traditional wired networks. That said, there are some key differences. Security is enhanced via SIM card technology, using the Secure Element embedded in the chip to ensure that device authentication mechanisms are stronger than WiFi.

Meanwhile, network functions and Quality of Service (QoS) are managed by a mobile core network. This allows performance to be optimized according to devices' needs inside the network. Finally, data and voice are primarily transported using licensed spectrum, minimizing the potential radio interference that WiFi is susceptible to. 

The past two years have seen considerable developments in the mobile industry. 5G networks have begun rollouts, while cellular IoT connections have risen globally from 633 million in 2017 to over 1.6 billion in 2019. Businesses now view a digital-first, connected strategy imperative to their operations. This has only been strengthened by the impact of COVID-19, underlining the need for remote monitoring, asset tracking, and automation. 

Private LTE

The business case for private LTE or 5G networks is strong. Private Land Mobile Radio/Professional Mobile Radio (LMR/PMR) networks have long been used for services ranging from taxis to the military. However, legacy LMR/PMR networks are mainly designed for voice applications, while the standards they are built upon are aging.

Private LTE networks offer many new advantages, both in application performance and flexibility, and security. This opens up the opportunity to migrate existing LMR/PMR customers to private LTE and, later, private 5G networks. This is also beneficial for new customers with specific connectivity requirements that all-purpose communications networks cannot meet. This hypothesis is underlined by a study conducted by Nokia and Harvard University, which identified over 14.5 million potential sites for private LTE deployments globally.

Private LTE networks essentially shrink an operator’s LTE mobile radio infrastructure and core network into a smaller, dedicated area not accessible by public mobile subscribers. This makes deployments ideal for underground, in-building, campus type areas. Examples include those in mining, manufacturing, industrial, sports, enterprise environments, and even smart cities. 

Ocado, a British online supermarket, has highlighted this as a reason to deploy a custom private LTE network in its packing warehouses, connecting around 1,000 robots. 

Rio Tinto, a mining company, has deployed a private LTE network covering 15 mines using only four base stations. In contrast, Airbus has launched a solution using a stratospheric balloon to provide 20KM of private LTE coverage. 

NRAs Responding to Increasing Enterprise Demand

How private LTE networks are deployed depends on several variables. According to the GSA, the first concern is spectrum licensing: National Regulatory Authorities (NRAs) in some 36 countries around the world have released dedicated spectrum licenses for private LTE or 5G networks. This includes several countries across Europe and the US, Japan, Australia, and Hong Kong. Germany’s NRA, BNetzA, has granted spectrum licenses to individual companies, highlighting that MNO involvement isn't guaranteed in new deployments.

Some private network customers will choose to use LTE-U/5G NR-U (unlicensed spectrum) airwaves, which will reduce reliance on MNOs further. However, unlicensed spectrum private LTE networks are subject to interference caveats, with the main advantages of core network management capabilities. Critical applications will almost certainly use a licensed spectrum to achieve a guaranteed level of service.

Opportunities for Systems Integrators

In some instances, enterprise customers will look to MNOs for expertise in mobile network architecture and operations to deploy small cells and the EPC (LTE core). Early deployments have already been tested or rolled out for enterprise customers by the likes of AT&T, Orange, and Vodafone. However, other routes mean that the competitive landscape is open.

Many enterprises consider their data sensitive and want to manage operations privately so operators won’t be privy to that data. Systems integrators and MVNOs with experience in deploying virtualized core networks alongside network and device management systems, for example, are expected to be key players where:

• Private network software can be instantiated in very little time under the Network-as-a-Service model.
• Systems integrators have global wholesale connectivity agreements to enable mobility across networks.
• Mapping devices moving between local and virtual private networks creates a unified private LTE network. This allows devices inside the private network to be used securely across public mobile networks while minimizing billing complexity. This is particularly important for customers whose employees or devices move between private and public networks.

The total addressable market for private networks is up to 14.5 billion connections: a substantial opportunity. This can be assumed when applying an average of 1,000 connections per private LTE site and using Ocado as a benchmark. As ever, there will be teething pains in growing this market, particularly as COVID-19 continues to raise questions over near-term investment strategy. This is where OPEX models will come into their own, offering a low-risk ‘pay-as-you-grow’ entry for enterprise customers.

Security, including in-network and devices roaming across public and private networks, must also be addressed. At the same time, players must bear a ‘future-proof’ aspect of design in mind regarding private LTE migration to 5G. These factors mean that a concrete strategy must be formulated between service providers and partners to deliver an optimal experience for customers. Given the high interest in private LTE networks, this is something that must be addressed quickly.