3GPP Includes Unlicensed Spectrum in Release 16 for 5G-U: Private LTE on Steroids

The past few years have seen the explosion of mobile broadband applications, with LTE-Advanced Pro now providing a consistent experience for most end users. It is this explosion that has created the demand for more spectrum, in some cases, more than allocated to most mobile service providers. The 3GPP has introduced the Licensed Assisted Access (LAA) and LTE in Unlicensed (LTE-U) frequencies, while there are industry initiatives targeting the use of unlicensed spectrum, including MulteFire globally and the Citizens Broadband Radio Service (CBRS) in the United States. There are pros and cons for each of these technologies, but the industry seems to have consolidated its efforts behind official 3GPP standards, and LAA is now being deployed across the United States for consumer mobile broadband, while Private LTE is being trialed in CBRS spectrum by many companies, including Amazon, to enhance indoor coverage.

Unlicensed spectrum is a necessity to expand the mobile market beyond consumer mobile broadband, especially when mobile service providers may perceive the private network market opportunity as too small to justify significant effort and investment to create a critical mass of deployments and applications. It is for this reason that this market requires flexibility and smaller vendors that can find opportunities in enterprise verticals.

Dedicated, private cellular networks are not necessarily a new market development, but one that has recently been exposed to public discussions. For example, mining companies have been deploying Private LTE in their open-pit mines since 2014, taking advantage of the maturity of the cellular technology, as well as the economies of scale for chipsets, modems, and devices. This contrasts with many other technology alternatives, including Wi-Fi, that must be hardened and customized for higher reliability, leading to proprietary solutions that are often expensive and difficult to scale. Despite being deployed in mining, Private LTE is just starting to be deployed in other enterprise verticals, and non-telco companies are becoming familiar with its benefits. It is expected become mainstream during 2019.

Does this mean 5G-U will enhance the value proposition of private cellular, or will it confuse companies that are interested in deploying private cellular in the next 2 years and had perhaps selected Private LTE? The answer is that 5G-U is a longer-term initiative that will build upon Private LTE deployments to provide a lot more. For the time being, ABI Research expects Private LTE to make further inroads in several enterprise verticals, which will later be augmented by 5G-U that will introduce edge computing capabilities, private network slicing, and even Artificial Intelligence (AI) features, deployed on-premise. In short, ABI Research expects Private LTE to continue to dominate the market in the next 2 to 3 years, but catering for unlicensed spectrum in 5G-U is an important milestone for the use of 5G networks in enterprise verticals. Private LTE deployments may be upgradable to 5G-U to a certain extent, because the frequency of operation will remain the same in both systems.

Enterprise verticals are the next frontier for the telco market, but both mobile service providers and large infrastructure vendors are attempting to tailor 3GPP technologies for this new environment, without necessarily considering end-user requirements. For example, the factory floor is typically connected with Time Sensitive Networking over Ethernet, while there are several wireless technologies being promoted by different groups, including Bluetooth, ZigBee, and, of course, Wi-Fi. Using licensed spectrum for a Private LTE deployment is restrictive. A mobile service provider and a large infrastructure vendor must be involved for a deployment because mobile service providers typically partner with large vendors for radio network deployments. Lifting the licensed spectrum restriction is already introducing new types of companies in the market, such as Redline Communications and Quortus, which are more agile and are creating tailored network solutions for enterprise verticals, including energy, mining, and utilities.

Private LTE deployments—and dedicated private cellular in general—will enable on-premise connectivity in the next 2 to 3 years for many enterprise verticals. 5G-U, on the other hand, will provide a private, on-premise platform for new applications, rather than connectivity alone, and despite offering an upgrade path for Private LTE, it may also create a wave of new greenfield private cellular deployments that will enable new use cases. The introduction of 5G-U in Release 16 is important because it will provide the necessary continuity for Private LTE and plant the seeds for new enterprise vertical innovation.