Vodafone Germany and Lufthansa go private for 5G

Vodafone Germany and Lufthansa have launched what they claim is a private 5G network based on standalone technology in an 8,500 square meter aircraft hangar in Hamburg.

While the deployment of a 5G private network is an interesting development, the fact that Vodafone does not own the spectrum which is being used to power the connectivity adds another twist.

In what could turn out to be somewhat of a disruptive move, the German telecoms regulator has been allocating hyper-localised spectrum licenses in the 3.7-3.8 GHz to enterprise and public sector organisations. For the first time, a company might be able to cut the telco out of the loop to satisfy its connectivity needs.

It could have been viewed as a headache, though Vodafone Germany does seem to be embracing the potentially disastrous scenario.

“The German economy needs 5G. We can do 5G,” said Vodafone Germany CEO Hannes Ametsreiter. “As a 5G partner, we want to help our industry to maintain an international top position in the future. Those who focus on new technologies today will be at the forefront tomorrow.

“We support our partners in bringing 5G into everyday industrial life as early as possible. To the factories. In the business parks. And even in airplane hangars. With individual campus networks that we tailor perfectly to the needs of our partners.”

Realistically, this is could be a niche, but profitable market for the telcos. Private networks could span the breadth of a campus or could be nothing more than a few floors on a building, but the customisation and security benefits would be attractive to some. That said, building and operating a network is an expensive business, this is not something which would be applicable to many customers.

At Lufthansa, the hanger is large enough to house four airplanes and the first usecases have been to make use of virtual and augmented reality visualise 3D design data of the planned cabin equipment on tablets and other end devices in empty aircraft fuselages. This is just the first usecase, though there will certainly be more.

Lufthansa has highlighted it is now able to shift the upload and download requirements of the network, CAD data transfer is incredibly demanding on a network, while all of the data is processed within the hanger itself. These sorts of benefits will appeal to some customers.

Germany is one country where the idea of private networks might catch on, thanks to its engineering and manufacturing heritage, though this is likely to be a niche usecase for telcos elsewhere. The threat which has emerged is cutting the telco out of the loop. Equipment can be purchased directly from the manufacturers, integrators and other consultants can be brought in to build and manage the network, while these enterprise organisations already own the spectrum for the area.

Vodafone Germany is proving it can be adaptable as a partner. It is differentiating itself to offer new services to enterprise customers. This might not be a trend which redefines the connectivity industry, but it is an example of how outside parties could come in and steal revenues promised to the telcos. Vodafone Germany was not necessarily needed in this experiment, but collecting managed services revenues is better than nothing.