What is the Private Networks opportunity?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Francesca Greane, Marketing, Content and Community Lead for 5G World 2020, discusses the private network opportunity.

According to new private research by Omdia with enterprises in North America and Europe, 9 out of 10 enterprises want someone to manage their sprawling and increasingly wireless LAN estates. This represents $18.5 billion in annuity revenues in 2020, with more growth to come. Clearly, the appetite for private 5G and LTE networks is there, but why?

Part of the answer is data; a growing commodity for enterprises. Accordingly, safeguarding data is increasingly a top priority for industries from oil and gas to manufacturing and mining. Private networks offer enterprises a way to keep their data protected and on-premise, and also promise to provide the superior connectivity needed to power industrial IoT and massive M2M communications enabling productivity gains and operational cost savings.

As connectivity experts, mobile operators are poised to capitalise on this lucrative market but there are obstacles to overcome and questions to answer.

Discover the emerging private networks opportunity in our upcoming webinar (June 4th, 4pm GMT)

  • Will enterprises opt to go it alone by purchasing their own spectrum to power and build their own private networks?
  • Will regulators incentive enterprises to do so with low-cost spectrum and appealing spectrum offerings for enterprises?
  • What are the technical architecture options for hybrid public/private networks compared to stand-alone private network or a private network slice?
  • How will operators partner with vendors and system integrators to develop compelling offerings for enterprises?
  • With each industry vertical having its own requirements and objectives, what are the optimal go-to-market strategies across key verticals?
  • Will 5G dominate the private networks market or will LTE continue as the technology of choice? And what will be the role of complementary technologies such as Wifi6?

Register for free today and join us for a deep dive into the questions mobile operators are asking as they prepare to capture the private networks market.

 

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ETSI sets out to develop non-IP networking standards for 5G services

The European Telecommunications Standards Institute (ETSI) has set up a new Industry Specification Group to address issues of age-old networking protocols faced by new services, in particular 5G.

The Industry Specification Group for Non-IP Networking (ISG NIN) had its kick-off-meeting at the end of March, but the announcement from the standardisation body only emerged this week. The new group will supersede an existing ETSI group for Next Generation Protocols (ISG NGP), created in 2015 to look at networking technology needs in the upcoming 5G era.

The industry has recognised for some time problems between new services and current networking technology. including ‘the complex and inefficient use of spectrum resulting from adding mobility, security, quality-of-service, and other features to a protocol that was never designed for them. The subsequent fixes and workarounds designed to overcome these problems themselves incur increased cost, latency, and greater power-consumption’.

ETSI set up the ISG NGP in 2015, still in the 4G era, to address these issues, with the work now being carried forward by the new ISG NIN. The group’s stated mission is ‘to develop standards that define technologies to make more efficient use of capacity, have security by design, and provide lower latency for live media’, all of which are key 5G promises.

“I’m really happy to have been entrusted with the Chairmanship of this group,” said John Grant of BSI, who was elected as ISG NIN’s Chair. “Finding new protocols for internet more suitable to the 5G era was essential. Big data and mission-critical systems such as industrial control, intelligent vehicles and remote medicine cannot be addressed the best way with current TCP/IP-based networking.”

Referred to in a group known as TCP/IP, the internet protocol suite, including the packet data identification standards (Internet Protocol, or IP) and the transmission standards (Transmission Control Protocol, or TCP), was developed inside the US defence department in the 1970s for transmitting text-based data between fixed computers.

When internet started to be widely adopted for civil use, there were discussions of building new networking technologies to handle the increased internet usage. In the end however, engineers decided to overlay new technologies on top the existing TCP/IP infrastructure.

“A lot of design and development happened to kind of rescue [it],” said Bilel Jamoussi, head of the ITU’s study groups responsible for ratifying technical standards during an FT interview. “We are now, I think, at another turning point, of saying, is that enough, or do we need something new?”

Built on the similar premise that the current TCP/IP infrastructure is no longer able to support demands from new technologies and new services, the Chinese proposal, titled ‘New IP’, was presented behind closed doors over a year ago at the ITU’s Geneva head office by delegates from Huawei, China Mobile, China Unicom, and China Academy of Information and Communications Technology (CAICT). It was only reported to the outside world when the FT got hold of the files.

Though scant in details, the fundamental scheme of the Chinese proposal is to replace the current open, flat, global, almost ‘wide wild web’ with a top-down approach to Internet management which ISPs, operators, and ultimately sovereign states, would have the overall control. The story was covered in detail by Light Reading, our sister publication.

Whether the announcement of ETSI’s new ISG NIN, two weeks after the meeting took place, is a response to the media coverage of the China plan, is anybody’s guess. The focus of the new group is different from the grandstand of the Chinese proposal: it is specific (targeted at supporting 5G services), phased (starting with private networks before being applied to public networks, starting from core networks before extending to the access), and addressing the underlying technology instead of looking at the control of the internet, or the lack of it.

To look at the situation from a positive perspective, at least both the Chinese party and ETSI, and ITU-T for that matter, agree that the TCP/IP infrastructure is getting obsolete.

“The IP stack and OSI layer model have undeniably enabled global connectivity – but since they originated in the 1970s, their design reflects the demands and capabilities of that era,” said Kevin Smith of Vodafone, who had been the chair of ISG NGP and was elected Vice Chair of ISG NIN. “Reassessing the fundamental design principles of network protocols offers the opportunity to deliver performance, security and efficiency gains for 2020 access networks and use cases, and may be achieved with simplification rather than expensive add-ons. The work of ETSI ISG NIN, in co-operation with industry organizations, can provide operators with a cutting-edge protocol suite to add to their service portfolio.”

CAT Cooperates with Huawei to Build Southeast Asia’s First International OTN Premium Private Line Network

[London, UK, February 21, 2020] CAT, Thailand’s national telecom operator, and Huawei announced that they will build Southeast Asia’s first OTN premium private line network. This network aims to serve multinational companies and customers in public and private sectors, such as government agencies and finance customers. The network will provide high-quality domestic and international private lines to support the global transformation of enterprises and lay a solid network foundation for the Thailand 4.0 strategy.

The Thailand 4.0 strategy aims to transform traditional small- and medium-sized enterprises (SMEs) into intelligent enterprises, and add value to traditional service industries. Furthermore, Thailand’s major companies are accelerating their digital transformation while expanding their global presence. This raises the requirements for international private leased circuits (IPLCs), including faster data transmission, better network stability, and lower network latency.

CAT is poised to shoulder the responsibility of building high-quality network infrastructure to support the 4.0 strategy. The majority of CAT’s enterprise private lines are MPLS VPN based. The private lines suffer from unstable latency, an availability that does not exceed 99.9%, network resources that are not visible, a long service provisioning period, and lack of value-added functions such as on-demand bandwidth. This does not live up to CAT’s reputation as a leading, nation-wide telecommunications service provider.

As one of the early adopters of Huawei’s premium private line concept, CAT has upgraded its existing 100G cross-border network by deploying Huawei’s Intelligent OptiX Network solution to build a high-quality private line network that covers the whole of Thailand, while connecting China, Singapore, Cambodia, and Myanmar. This cements Thailand’s position as an ASEAN Digital Hub. The network provides superior IPLCs featuring a high bandwidth, availability exceeding 99.99%, millisecond-level latency, fast provisioning (within days), and real-time SLA visualization to support Southeast Asian enterprises in their international transformation.

Commenting on the cooperation, Colonel Sanpachai Huvanandana, President of CAT, said: “This OTN premium private line network will cover 76 administrative regions in Thailand and connects multiple countries around the world. It can provide 2M to 100G high-quality private lines for enterprises in Southeast Asia, facilitating digital transformation. It will also strengthen our Business-to-Business sector and become an engine driving CAT’s development in 2020.”

Kevin Huang, Vice President of Huawei’s Transmission & Access Product Line, said: “With a strong presence and in-depth understanding of the OTN field and enterprise private line requirements, Huawei has proposed the OTN premium private line solution that features technological advancement and sustainable evolution. This solution aims to provide ubiquitous optical connections for enterprises to enjoy a quality experience and create a win-win situation for enterprises and operators.”

Huawei has over 20 years of experience in the optical network field and has held the largest market share for 10 consecutive years. Huawei has built more than 30 OTN premium private line networks for global operators by leveraging a portfolio of advanced products, including the OptiXstar OTN CPE, ASON, and iMaster NCE. For the future, Huawei will continue to promote innovative next-generation OTN technologies to help operators build leading premium private line networks and accelerate the digital transformation of global enterprises around the globe.

For more information about CAT OTN premium private line network, visit: Link

–ends—

About Huawei

Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. With integrated solutions across four key domains – telecom networks, IT, smart devices, and cloud services – we are committed to bringing digital to every person, home and organization for a fully connected, intelligent world.

Huawei’s end-to-end portfolio of products, solutions and services are both competitive and secure. Through open collaboration with ecosystem partners, we create lasting value for our customers, working to empower people, enrich home life, and inspire innovation in organizations of all shapes and sizes.

At Huawei, innovation focuses on customer needs. We invest heavily in basic research, concentrating on technological breakthroughs that drive the world forward. We have more than 188,000 employees by the end of 2018, and we operate in more than 170 countries and regions. Founded in 1987, Huawei is a private company fully owned by its employees.

For more information, please visit Huawei online at www.huawei.com or follow us on:

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Huawei makes a number of bold claims at MWC replacement event

Huawei released a string of new products at its MWC replacement event in London and claimed to be number one in every field.

At its product and solution launch event, dubbed “5G, Bring New Value”, Huawei unveiled a number of new products including a new chipset, an updated 5G core, new solutions for private networks and optical transmission, a new IP router, and a new software suite.

These products were launched one by one after Ryan Ding, Huawei’s President of Carrier Business Group, already unveiled the 64T64R Massive MIMO 5G base station during his keynote, when he reiterated the claim he made a year ago that Huawei enjoyed 18 months’ leadership over its competitors. When asked to substantiate the claim in a subsequent analyst briefing, Huawei simply said its leadership is in all technologies.

Similar claims, if not down to the specific number of months of its leadership, were repeated in the other product launches. After the new flagship base station and other 5G solutions (Blade AAU, 5G X-Haul for higher network slicing precision, a new optical module for ultra-broadband transmission) were introduced in more details by Yang Chaobin, Huawei’s 5G Product Line President, Henk Koopmans (pictured), CEO of Huawei’s R&D UK, took the stage to unveil the new 5G chipset, called 5G pre-module. It has a 2/3/4/5G-in-one baseband that will work on frequency bands from sub-6GHz to mmWave.

Huawei stressed the reference design that comes with it which will make it easier for Huawei’s customers to onboard the platform and design and make their products. What is puzzling is Koopmans’s claim that this chipset, on a 7nm process, is the world’s most advanced design, and is the world’s first to support both standalone (SA) and non-standalone (NSA) 5G modes, clearly undeterred by the fact that the new Qualcomm 5G chipset launched two days earlier does exactly that, and is designed on a 5nm process.

Huawei’s new private network solutions, called HiCampus, include LAN switch and fibre. It focuses on providing its customers with full wireless connectivity, full fibre, and full AI. The AI capability is highlighted in the context of fast detection of root causes for network errors. Huawei claims that over 85% of its customers’ network errors can be automatically resolved.

Other new products introduced at the event include Huawei’s new 5G core, with highlight on what it calls “deterministic networking” (including E2E network slicing, service & topology awareness, and resource orchestration); intelligent optical network solutions, called OptiX, to deliver enhanced experience for home use (especially supported by embedded AI) and private networks (with passive optical LAN); NetEngine 8000, Huawei’s new IP router for data communications which the company claims to be the world’s first to be able to deliver service level agreement (SLA) assurance. Huawei’s new billing system, called Huawei 5G CBS R20, was the final launch at the event. The company claimed that the billing system has achieved the first live 5G SA implementation, with STC Kuwait.

Another key theme that threads all the product launches at the event was Huawei’s stress on the “green” advantage of its new products, with different percentages of energy consumption reduction attached to the feature introductions. This is assumed to not only demonstrate the power consumption efficiency that can save OPEX for its customers, but also echo the message from the GSMA representative at the event that telecoms industry is the first sector to comply with the United Nations Sustainable Development Goals (SDGs).

Shell carpet-bombs lofty enterprise connectivity claims

It may only be a single presentation from a single company, but Shell’s indifference to the latest fads is a reminder that the telco industry has a way of over-hyping itself.

Speaking at the Private Networks in a 5G World conference in London, Johan Krebbers, Shell’s IT CTO & VP TaCIT Architecture, suggested the company has little interest in campus networks unless absolutely forced into the situation, neither in edge computing nor 5G connectivity. The 5G mis-interest should be hedged as ‘for the moment’, though it does undermine the insistence by many telcos that the enterprise segment is thirsty for next-generation technologies.

This is not to say the company is not exploring how connectivity can enhance operations, but it does place somewhat of a dampener on the buzz which is being created around the industry.

“Does it need 5G? Maybe not. But does it need connectivity? Of course, it does,” Krebbers said while discussing the projects which are being driven forward today.

Krebbers work is currently focused on using connectivity to improve the prospects of various aspects of the business. For the moment, the team is primarily focused on the manufacturing and logistics areas of operations, with a keen focus on IOT. Most of the projects are focused more acutely on data, such as predictive maintenance of assets or data-centric reservoir modelling, though many of these projects can be enhanced through solutions available today rather than the glorious next-generation technologies of tomorrow.

Again, it is worth hedging the statements here, there are of course various applications which would require the implementation of much more advanced solutions. Remote inspection of assets using drone technology will require 5G benefits such as enhanced mobile broadband and low-latency, but these are projects for the future. The most interesting elements of this presentation was the disregard for the trends which are being hyped by the telco industry today.

Krebbers said the team would rely on the public internet, not private networks, unless his hand was forced. Countries like Oman and Nigeria have poor 4G coverage therefore it is necessary to invest. Edge computing holds little interest as the team makes almost exclusive use of public cloud infrastructure and services. The team is driving towards a more predictive, not reactive, business structure which also slightly undermines the need for speed which 5G offers.

Shell is still a company which will make use of connectivity solutions, but these are not the enhanced services or products which the telcos will be searching for to generate ROI on extensive investments. In the way by which Krebber is describing Shell, the telcos sit more comfortably in the commoditised, connectivity partner column. The likes of Amazon, Google and Microsoft are more likely to find favour and fortune here.

As mentioned above, this is just a single presentation at a single conference, but it does at least somewhat undermine the extravagant confidence the telcos have in the enterprise connectivity world.

Private networks: something of a big deal

Telecoms.com periodically invites other scribes to share their views on the industry’s most pressing issues. In this piece Ray Le Maistre, Editor-in-Chief at Light Reading, notes that with mobile operators and vendors scrambling for new business opportunities, the burgeoning wireless private networks sector could be a mini honey pot.

One of the biggest, and hardest to answer, questions asked every day at telecoms operators and vendors concerns new business opportunities – the identity of new revenue streams.

That question has been highlighted even more in the past few years as operators, in particular, seek to justify their 5G investments and develop a return on investment (ROI) plan that combines lower opex with additional revenues.

There won’t be a single answer to that question, of course: It will be a mixed bag of savings (hopefully!) and sales opportunities.

One of the more immediate revenue stream opportunities right now is wireless private networks, and the good news is that this opportunity doesn’t require 5G. Instead, the potential looks set to be enhanced by the availability of a full set of 5G standards (including the yet-to-be concluded core network specs) and the maturity of associated technology.

In the meantime, 4G/LTE has already been the cellular foundation for an increasingly thriving wireless private networks sector that, according to ABI Research, will be worth $16.3 billion by 2025 (see https://www.abiresearch.com/press/private-lte-will-be-us163-billion-opportunity-2025-and-foundation-5g-services-end-vertical-markets/).

Another market sizing prediction, this time by SNS Telecom & IT, pitches annual spending on private 4G and 5G networks at $4.7 billion by the end of 2020 and almost $8 billion by 2023.   

However this plays out, there’s clear anticipation of growing investment. What’s particularly interesting, though, is which organizations might pocket that investment. That’s because enterprises and/or organizations looking to benefit from having a private wireless network have a number of options once they decide to move ahead with a private network – here are three permutations that look most likely to me:

  1. Build and run it themselves – technology vendors get some sales in this instance
  2. Outsource the network planning, construction and possibly even the day-to-day. management of the network to a systems integrator (SI) – the SI and some vendors get the spoils. It’s possible here, of course, that the SI could be a technology vendor.
  3. Outsource to a mobile network operator – the operator and some vendors will get some greenbacks.

For sure there will be other permutations, but it shows how many different parts of the ecosystem have some skin in the game, which is what makes this sector so interesting.

What’s also interesting, of course, is what the enterprises do with their private networks: Does it enhance operations? Help reduce costs? Create new business opportunities? All of the above?

Let’s not forget the role of the regulators in all of this. In the US the private wireless sector has been given a shot in the arm by the availability of CBRS (Citizens Broadband Radio Service) shared spectrum in the currently unlicensed 3.5 GHz band: This has given rise to numerous trials and deployments in locations such as sports stadiums, Times Square and even prisons.

In Germany, the regulator has set aside 100MHz of 5G spectrum for private, industrial networks has caused a storm and even led to accusations from the mobile operators that the move ramped up the cost of licenses in the spectrum auction held earlier this year. (See Telcos complain about auction as German regulator bags €6.5bn https://telecoms.com/497897/telcos-complain-about-auction-as-german-regulator-bags-e6-5bn/)

In the UK, Ofcom is making spectrum available in four bands:

  • the 1800 MHz and 2300 MHz shared spectrum bands, which are currently used for mobile services;
  • the 3.8-4.2 GHz band, which supports 5G services, and
  • the 26 GHz band, which has also been identified as one of the main bands for 5G in the future.

The process to enable companies and organizations (Ofcom has identified manufacturers, business parks, holiday/theme parks and farms as potential users) in the UK to apply for spectrum will go live before the end of this year, with Ofcom believing that thousands of private networks could be up and running in the coming years.

Network infrastructure giant Nokia believes more than a dozen countries are planning to allocate spectrum specifically for private wireless networks, and that will suit the Finnish vendor just fine as it’s building a sizeable business by focussing on the specific needs of such buildouts.

It recently boasted that it already supports more than 120 private wireless networks around the world, with its customers including 24 in transportation, 35 in the energy sector, 32 in public sector and smart cities, and 11 in manufacturing and logistics. The company believes that, potentially, the number of private network base stations could dwarf the 7 million deployed by the world’s commercial mobile network operators, possibly by as much as twofold.

Nokia isn’t alone in spying this business opportunity, of course, although it has clearly built itself a solid foundation on which to build: Sweden’s Ericsson, as you’d expect, is also hot for such business, while specialists such as Redline and Federated Wireless are also chasing business.

So where is this market heading? And what are the drivers for further private network rollout? That’s something I’ll be checking into at the Private Networks in a 5G World (https://tmt.knect365.com/private-networks/) event in London (November 26-27), where the likes of Shell, Heathrow Airport, the Antwerp Port Authority and multiple major mobile network operators and technology developers will be sharing their stories.