Will CBRS/OnGo Spur the Private LTE Market?

After only two months there has been an explosion in the number of CBRS/OnGo Initial Commercial Deployments (ICDs) using the General Authorized Access (GAA) framework, and that’s before Priority Access License (PAL) auctions in June 2020. While most ICDs are not public information, the CBRS Alliance has illustrated the number of ICD locations in this “heat map” graphic:

These ICD deployments are authorized for a 30-day period at the end of which the Spectrum Access System (SAS) providers submitted results to the Federal Communications Commission (FCC) for final certification and full commercial service in November/December 2019.

Although the complete list of ICDs is not public, we can start to see the use cases and extent of the likely full commercial services. For example, after the FCC authorized the CBRS ICD on September 16, 2019, SAS provider Federated Wireless immediately announced that it is in ICD with more than 20 customers in both urban and rural areas in 36 states.

One of these ICDs has been deployed at the American Dream Mall in New Jersey using equipment from Cradlepoint and JMA Wireless and Managed Service Provider (MSP) Advanced Network Services (ANS). This ICD covers 600 acres and 30,000 parking spaces. The private LTE network is used for parking system management, internal communications, traveler assistance kiosks and displays, safety and security, and ticketing. This network allows managers to remotely update 30 digital signs in order to direct parking for events at the nearby MetLife Stadium. Cradlepoint reports that this network gave a deployment cost savings of almost 90% and the time to deployment was only six to eight weeks, when compared to deploying the network with fiber. The alternative would have been to deploy fiber at a cost of more than US$4 million and delays to the mall opening.

In another well publicized example, Federated and Boingo built a private CBRS network using equipment from CommScope-owned Ruckus Wireless at Dallas Love Field airport supporting employee communications. Potential future use cases would involve the network being used as a neutral host to provide commercial LTE mobile communications for travelers.

Of course, CommScope is not only an equipment vendor; via its subsidiary Comsearch it is also a SAS provider and working with Athonet to build a 200-square-kilometer CBRS network for a large wind and solar farm operator. The network will be used for employee communications, video surveillance, industrial control and monitoring, thermal imaging, asset tracking, remote control of drones for inspections, and other functions.

In a final example, the city of Chicago has engaged with Federated Wireless, Crown Castle, Cradlepoint, and Vapor IO to build a network with edge computing to be used for communications, license plate recognition, and drone surveillance. The plan for this type of network is to pre-integrate CBRS private networks into edge data centers at the base of cell towers and in aggregation hubs nationwide and use it to offer low-latency edge compute for time-sensitive applications.

These are only a few examples of ICDs that have come to our attention, but ABI Research believes that this is a signpost of a larger trend we see proliferating these private networks in scenarios that have been uneconomic with traditional In-Building Wireless (IBW) systems such as Distributed Antenna Systems (DASs) and small cells.

Since Mobile Network Operators (MNOs) balk at deploying IBW systems for any but top-tier locations such as NFL stadiums, the IBW industry has been searching for a way of breaking into the vast market for enterprises, which have 100,000 square feet up to 500,000 square feet of floor area, known as the “middleprise.” However, growth in this sector has not happened due to the costs involved and the skill sets required from the enterprise. CBRS could prove to be an IBW enabler in this market by offering enterprises the control, low cost, and rapid deployment for a private LTE network. Instead of counting on an MNO for the LTE evolved packet core, today an enterprise can install a dedicated core on its premises or even in the cloud at a fraction of the cost of contracting with an MNO. Additionally, with CBRS, enterprises implementing IBW no longer need pay expensive spectrum license fees when using the GAA framework.

Combined, these factors will boost the uptake of IBW in the middleprise so much so that, according to the CBRS Alliance, a quarter of the enterprises they surveyed are actively looking to shift their private wireless networks to a new technology and 41% of them favor a move to 4G and CBRS during 2020. The enterprises surveyed cited ongoing concerns around the deployment and operational costs of Wi-Fi private networks, plus the indirect costs of having to over-specify and over-provision the network to forestall problems with reliability, security, or performance.

While the MNO will find CBRS attractive for adding capacity using carrier aggregation in dense urban areas outdoors and indoors in locations such as as transportation hubs and shipping ports, Multiple System Operators (MSOs) will find it attractive to offer their customers connectivity without the complexities of relying on a Mobile Virtual Network Operator (MVNO) agreement with an MNO. It is the MSP ecosystem that will boost the adoption of private LTE using the CBRS framework.

MSPs offer Information Technology (IT), mobile infrastructure, and services to enterprises wishing to outsource their IT business for reasons of cost, resources, and complexity. MSPs specialize in verticals that are not being serviced by the MNO or MSO and fill a gap in markets such as hospitality, real-estate or sports, and entertainment. This applies most to IBW systems where 80% of traffic originates or terminates. Many enterprises today struggle with IBW and cannot get good high-quality coverage indoors. Until now enterprises turned to Wi-Fi, but Wi-Fi is prone to interference as usage goes up and has not proven to be a satisfactory replacement for high-quality LTE. Now, with CBRS, MSPs can offer LTE solutions for private LTE or neutral host LTE that they can deploy themselves with the economics of deploying Wi-Fi. The CBRS ecosystem opens up an attractive way of deploying IBW and since the CBRS Alliance is planning a roadmap towards 5G, the ecosystem is future proof and CBRS will alter the paradigm for IBW and proliferate the number of MSPs with CBRS skill sets.

A wide range of products has already been approvedfor use by the CBRS Alliance, with more in the pipeline. So far, at least 20 CBSDs (CBRS base stations or small cells) from 11 manufacturers have received full OnGo certification and over 46 end user devices—e.g., smartphones, routers,and embedded modules—are also listed. Smartphones with certification include Apple’s iPhone11, Google’s Pixel, Samsung’s Galaxy, and other popular models. However, pending wide scale penetration of OnGo certified handsets as subscribers upgrade over the next two years and the completion of the PAL auctions next year, private LTE will be the use case which dominates.

The emerging use cases for private LTE can be found in the manufacturing sector, including sensing/monitoring, wireless robotic services, and other low latency applications. In the warehousing vertical applications include surveillance, fork-lift telemetry, device tracking, and supply chain applications. Again, in the mining and oil field verticals private LTE is used for applications including surveillance, automated machinery, voice communication above and below ground, and predictive maintenance. Similar applications can be found in the transportation, smart city, and medical verticals including digital signage and critical care health monitoring.

With this momentum the risk to MNOs and the Tier 1 Original Equipment Manufacturers (OEMs) that offer managed services is that some lucrative high value business will be taken by these alternative MSPs. MNOs and Tier 1 OEMs do support private networks where a vertical requires performance outside the capability of traditional licensed commercial mobile networks, but the advent of private LTE networks using CBRS shared spectrum will spur non-MNOs to quickly develop CBRS skill sets and capture share in this market.