Private Networks at MWC – A Lot of Talk, But Where is the Action?

At this year’s Mobile World Congress (MWC) in Barcelona, Private Networks were the star of the show. Looking back at the event, nearly every single discussion at some point arrived at private networks ambitions and industry initiatives, as well as enterprises’ pain points and their requirements towards digitization enabled through private cellular. 

This conceptual talk and general industry interest was combined with a few very concrete product/solution announcements. IT vendor Cisco, for example, announced its Private 5G Solution, which will support both Wi-Fi 6 and private cellular. Similarly, the United States network operator AT&T used the stage to announce its new “Private 5G Edge” in collaboration with Microsoft.

But what were these discussions about? After all, this is what determines their impact within the industry. Certainly, a lot of commercial discussions (around potential partnerships for example) might or might have not taken place behind closed doors. The overwhelming majority, however, were focused on strategy and innovation: which business models would resonate well with enterprises, what messaging to adopt or what channel partner to use, and so forth. This is good and bad news.

The good news first: This shows that the telecom industry is finally developing a nearly complete vision around private networks and a profound strategy to target the enterprise connectivity opportunity.

Now, the bad news: These are all discussions that could (and arguably should) have happened years ago. After all, from the launch of the “5G Arena” at Hannover Messe in 2018, it was clear to the industry what capabilities private cellular (and private 5G specifically) are able to offer to enterprises. However, what was missing in most cases was a clear vision and roadmap on how to move this private network understanding into a commercially viable endeavor. Most notably partnership efforts or vertical-specific, concrete Go-to-market strategies were left out of the discussion.

In other words, discussions at MWC have highlighted that every possible actor on the telecom stage is now trying to secure their piece of the private network cake, but only very few know what their slice can realistically look like (i.e., what they will be providing to the market).

As has been argued in many ABI Research deliverables before, the window of opportunity for the telecom industry to profit from the immense private networks opportunity is beginning to close. Consequentially, the ability to execute the private networks vision becomes increasingly important, and the industry must switch from this strategy-focused innovation-centric talk towards commercially executing on their vision.

For the industry, this carries two implications. From a technology perspective, it requires them to design modularized and easily scalable solutions to be able to adapt to different enterprise environments quickly. From a commercial perspective, this requires a robust Go-to-Market strategy that does not only consider large enterprises (as the early adopters), but also focus on Small- and Medium-sized Enterprises (SMEs).

 Even though ABI Research forecasts the Private Networks market to exceed US$100 billion by 2030, the market will not be big enough for all of these actors to provide their own solution. Consequentially, market consolidation will inevitably follow the initial hype and will lead to a healthy growth projection. In hardware oriented (industrial) markets, this consolidation is often achieved through mergers and acquisitions (M&A). In the private networks sphere, however, where the provision of a full end-to-end solution requires expertise from multiple domains, partnerships and co-creation initiatives will become an additional means to consolidate efforts and combine resources rather than using them to compete.

In addition, such partnership strategies consider different vertical-specific preferences for suppliers of new technologies. A manufacturing SME, for example, would be more inclined to turn to a known system integrator to introduce new technology to their factory floor, while a stadium operator or other media and entertainment related company might be more open to work directly with telecom, carriers.

As such, carriers should focus ambitions to provide a private networking solution directly to enterprises in the carpeted verticals (i.e., media and entertainment, hospitality, or retail) as well as stadiums and event location, as these are more open to working with carriers. For other verticals (like manufacturing, warehousing, energy generation, healthcare, or transportation), established telecom players might be more suited to supply their individual components into channel partners, namely system integrators, machine automation vendors, or hyperscalers to supply to the implementing enterprise.