Thursday, 29 July 2021

Drivers that may power the rise of Private Networks for MNOs

posted by Mentor Europe
Monday 21 June 21

It’s still early days but the Private Mobile Networks topic is heating-up - and it’s more complex than a simple Private versus Public story

Right now, even with success in delivering mobile coverage and services to the mass market, Mobile Network Operators (MNOs) are currently playing a limited role in Private Networks. The question remains if they can – or should – play a greater role. MNOs will compete well in certain situations but less so in others - and face competition from Neutral Hosts and Systems Integrators. We explore some of the expectations and review where the winning propositions are likely to be and how MNOs can successfully play in this field. The Private Mobile Network proposition landscape We see two sets of drivers for Private Mobile Networks: 1. Location and coverage, and 2. &ldquo…

Right now, even with success in delivering mobile coverage and services to the mass market, Mobile Network Operators (MNOs) are currently playing a limited role in Private Networks.

The question remains if they can – or should – play a greater role. MNOs will compete well in certain situations but less so in others - and face competition from Neutral Hosts and Systems Integrators.

We explore some of the expectations and review where the winning propositions are likely to be and how MNOs can successfully play in this field.

The Private Mobile Network proposition landscape

We see two sets of drivers for Private Mobile Networks:

1. Location and coverage, and

2. “Special features” - such as guaranteed capacity, low latency, security, numbering or addressing schemes, access controls, and ultra-precise location services. These features allow businesses to achieve levels of automation and efficiency previously unseen and currently not available or affordable on public networks.

Scenarios 1, 3 and 5 reflect the different coverage challenges of traditional mobile networks. These are not private networks since features are standard, even though in scenarios 3 and 5, the MNOs may not actually own the Neutral Host network.

Scenario 2 provides special “private network” features in existing MNO coverage footprints. And Scenario 4 does this with the enhanced coverage provided by a Neutral Host.

Some special features can be implemented as services running over-the-top - and others require direct control of the network - or a slice of the network.

Scenario 6 is a fully Private Mobile Network. The combination of the global trend for Governments to reserve spectrum for local private use, and the emergence of cloud based mobile core networks is a game changer for Private 4G/5G networks.

The Private Network opportunity for MNOs

MNOs have natural providence over Scenarios 1, 3 and 5. Yet, if in scenarios 3 and 5 MNOs cannot provide sufficient coverage, then the space owner may be motivated to commission a full private network (Scenario 6).

MNOs are also uniquely positioned for Scenarios 2 and 4, as 5G network slicing further improves the special services that MNOs can provide.

Each slice can have different functional and performance characteristics that meet the specific needs of the business. It’s fair to say a fully private network is best placed to meet these specific needs, but if a company has a clear purpose and are prepared to pay, and assuming that coverage and capacity can also be met, then the Operator could sell them an appropriately configured network slice.

However, this does pose a number of questions:

1. What are the compelling special features customers will purchase?

2. How can a mass market-focussed MNO avoid being drawn into creating and managing 100s of bespoke slices for their business customers?

3. Does the MNO have the internal organisation and skills required address this market?

Managing the sheer complexity and variety of this proposition is a big stretch from their core mass market capabilities.

The opportunity is for MNOs to partner with relevant third parties to deliver a viable and profitable private service on the public network.

Fully Private Networks will be dominated by Global Systems Integrators

In the Scenario 6 – a fully Private Network - a business will have decided they want their facility to have a wireless network with special features allowing them to achieve levels of automation and efficiency previously unseen.

They will already have discounted wired solutions because of inflexibility. They may have considered Wi-Fi - but instead selected 4G/5G mobile.

Reasons for using 4G/5G mobile will vary from business to business and can include use of licensed spectrum to control interference, better support for high densities of wireless devices, mobility and resilience between access points, (with 5G) lower latency, better security, and ability to roam onto public mobile networks

Fully Private 4G/5G Networks are typically heavily customised and highly integrated with other systems and equipment to address the needs of different industry vertical sectors. Examples of these vertical sectors are manufacturing, warehousing and distribution, air and sea ports, mining, and oil and gas production.

For this reason, it is difficult to see MNOs playing a lead role. Instead, the lead will probably be taken by a Global Systems Integrator who specialises in the relevant industry vertical sector.

What’s the next step for MNOs?

MNOs will compete well in certain situations, enabled by 5G network slicing, especially when providing special private network features in existing MNO coverage footprints.

But they will face challenges and increased competition from new entrants like neutral hosts and systems integrators. Businesses seeking fully private networks will be far more likely to approach global systems integrators who specialise in their relevant vertical markets. They will draw on wireless design and operations firms to make this work. While neutral host operators will grasp the opportunity of scenario 5 to work with venue owners and delight them with private 5G services.

Operators have some tough choices to make. The heart of it is, whether to get close to the likes of business and industry and work with them to develop solutions or stand back and watch the Private Mobile Network game play out.

Mentor Europe are program management specialists working in the UK telecoms market.

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