Nokia Announces Compact Private Wireless Solution as the Market Broadens Its Focus from Large Industrial Sites to Small and Medium Enterprises

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By Elizabeth Stokes | 4Q 2023 | IN-7149

Early this fall, Nokia announced the launch of Nokia Digital Automation Cloud (DAC) Private Wireless (PW) Compact, a simplified version of its DAC private wireless solution. The new product is geared toward small and medium industrial sites, and follows efforts from other private wireless vendors to capture smaller customers in both industrial and commercial industries.

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Nokia Announces New Private Wireless Solution


Private wireless network vendor Nokia announced in early October the launch of Nokia Digital Automation Cloud (DAC) Private Wireless (PW) Compact, a simplified private wireless solution designed for small and medium industrial sites. The product is a streamlined version of the company’s DAC PW solution and uses Nokia AirScale small cells and the Citizens Broadcast Radio Service (CBRS) spectrum. The solution, initially available in the United States, is offered to customers through a flexible Operational Expenditure (OPEX) model.

Nokia DAC PW Compact follows a similar product release from Ericsson. Launched in early 2023, NetCloud Private Networks is Ericsson’s private wireless solution also configured for simplified, plug-and-play deployments. Both products are emblematic of a shift in the private wireless industry as vendors reimagine their offer models to capture customers historically excluded from the market.

Shifting Offer Models to Capture Small and Medium Enterprises (SMEs)


Private wireless solutions were traditionally reserved for utility applications or large campuses in industrial markets, such as manufacturing and mining. These industries often have mission-critical connectivity needs that require a low-latency, closed-loop network on-site. Large businesses in these markets also tend to have budgets large enough to cover the steep equipment and management costs associated with a private wireless solution.

Nokia and Ericsson are the two most prominent private wireless infrastructure suppliers, though Nokia has proven to be a leader in this domain with more than 600 private wireless customers. Ericsson does not communicate official numbers. Though their market traction may differ, Nokia and Ericsson have both traditionally served industrial customers, and as a result, these companies developed a reputation for providing comprehensive—and expensive—private wireless solutions.

The smaller private wireless vendors in the market, such as Celona, are often defined in opposition to the traditional infrastructure suppliers. The smaller players in the market typically provide more flexible, scaled-down solutions for Information Technology (IT)-focused verticals such as education. Many smaller private wireless vendors believe Nokia's and Ericsson's prices have excluded SMEs from the market. As one private wireless startup told ABI Research, “More OEMs will realize that the market they are working with here is a medium enterprise market.”

With the announcement of the DAC PW Compact solution, it appears that Nokia agrees that SMEs present a unique opportunity. Many medium-sized businesses in both industrial and commercial markets still depend on Wi-Fi, a private wireless technology with limited coverage and unreliable performance in crowded, data-heavy environments. Nokia’s new compact solution proves that private wireless vendors, particularly those that entered the market catering to large, industrial use cases, are confident they can compete with Wi-Fi and capture these new, smaller customer segments through adapted offer models.

The Capital Expenditure (CAPEX) spending associated with private wireless solutions is a primary barrier to entry for SMEs. Both Nokia’s and Ericsson's SME-friendly private wireless solutions are available through subscription-based models. These OPEX-oriented products resemble a Private Wireless-as-a-Service (PWaaS) setup, in which customers pay for the solution through a recurring, predictable fee and invest in minimal networking equipment. By providing a new private wireless offer model, Nokia could disrupt Wi-Fi’s dominance in key SME verticals and also present new growth opportunities for its primary DAC solution. Nokia is offering DAC Compact through a 3-year contract, during which SMEs can trial private wireless and afterward possibly scale up to a full DAC solution.

Target Small IoT Customers Requiring Expansive Coverage and Outdoor Connectivity


In catering to large, industrial markets, Nokia and Ericsson have traditionally not had to contend with Wi-Fi as a persistent competitive obstacle. However, the markets that private wireless vendors will target with their SME-friendly products, such as small industrial sites, retail centers, and hospitality venues, can be extremely reliant on Wi-Fi. And it is common knowledge that competing with Wi-Fi in SMEs can be a tough gig. Though its performance in noisy environments can be poor, Wi-Fi’s low cost and ease of deployment can be so persuasive in SME-populated verticals that vendors face an uphill battle in convincing customers that their Wi-Fi network should be replaced or supplemented with a private mobile network.

However, there are certain applications, particularly in the IoT domain, in which Wi-Fi proves less of a competitor. Many IoT applications are defined by disparate devices spread over vast distances. As a Short Range Wireless (SRW) connectivity technology, Wi-Fi can often not achieve the coverage required by many IoT applications without multiple access points, each of which increases the cost of a solution and can serve as an additional attack point for malicious activity. Private wireless vendors looking for SME customers not yet reliant on Wi-Fi should target smaller customers serving IoT applications that require extensive, reliable coverage, such as fleet management and condition-based monitoring.

In selling to SMEs, private wireless vendors will also look at IoT applications that require devices to be outside, such as connected agriculture and outdoor yard management. Wi-Fi's performance outdoors is famously poor, and smaller IoT customers pursuing these use cases would be more receptive to a private wireless network than other SMEs that demand only indoor connectivity.

The private wireless market is young, and both customers and vendors are testing the best business models and deployment strategies for the future. Nokia’s new product is emblematic of a market-wide shift in which traditional private network companies are broadening their portfolios to service both large and small industrial sites and IT-focused industries. Though this shift means that traditional suppliers will face greater competition from Wi-Fi, these vendors can avoid the common pitfalls of competing with the technology by focusing their efforts on key IoT segments.


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