Private Cellular Networks Bear Much Promise for Industry 4.0

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4Q 2019 | IN-5670

Microsoft recently showcased its Microsoft Azure-based private LTE solution at Microsoft Ignite, which was held this year in November in Orlando, Florida. The private LTE solution is provided by CommScope’s Ruckus Citizens Broadband Radio Service (CBRS) portfolio and is aimed at allowing enterprises to deploy private LTE networks without any Capital Expenditure (CAPEX) as the LTE Evolved Packet Core (EPC) network is deployed as a service.

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New Entrants Enter the Private Cellular Network Market

NEWS


Microsoft recently showcased its Microsoft Azure-based private LTE solution at Microsoft Ignite, which was held this year in November in Orlando, Florida. The private LTE solution is provided by CommScope’s Ruckus Citizens Broadband Radio Service (CBRS) portfolio and is aimed at allowing enterprises to deploy private LTE networks without any Capital Expenditure (CAPEX) as the LTE Evolved Packet Core (EPC) network is deployed as a service.

This comes in lieu of the Federal Communications Commission (FCC) having given the green light to commence initial commercial deployment in the CBRS band (3550 MHz to 3700 MHz) in September. CommScope’s Ruckus CBRS portfolio supports both General Authorized Access (GAA) and Priority Access License (PAL) tiers of the CBRS band.

CommScope acquired Arris-Ruckus earlier this year for US$7.4 billion in a bid to target the 5G, mobility, and Internet of Things (IoT) market. This move is estimated to increase CommScope’s Total Addressable Market (TAM) by US$60 billion, with nearly US$1 billion in cash flow in its first full year of the acquisition.

5G and Private LTE Networks Have a Multifold Impact

IMPACT


Private cellular networks, or Non-Public Networks (NPNs), as the 5G Alliance for Connected Industries and Automation (5G-ACIA) calls them, can generally be categorized into two types, the first being an isolated network and the second a dual-slice campus network that works in conjunction with a public network. Both types of NPN can use licensed and unlicensed spectrum as well as CBRS. The isolated network is a completely standalone network wherein both the Radio Access Network (RAN) and core network are deployed at the campus, where control and data plane functions locally. The Operational Technology (OT) company is thus solely responsible for operating this NPN. Examples of standalone NPN deployments would be Nokia and Telefonica Peru’s private LTE network deployment for Minera Las Bambas, a copper mine in Apurimac, Peru, as well as Ericsson and Telia’s private LTE network deployed for Ericsson’s 5G radio manufacturing plant in Tallinn, Estonia. In this scenario, data is localized, very secure, and can guarantee very low latencies as the RAN and core network are co-located. For factories, the distance from the core network to the RAN affects the latency, with every 5 to 10 km of distance reduced between the RAN and core network able to reduce 10 milliseconds of latency. This usually includes an additional installment of radio infrastructure within the campus and, sometimes, surrounding it.

Dual-slice campus networks utilize a shared RAN with a public network and can be deployed through a proto-network slice for LTE using a public network control plane or virtualized network functions. This scenario makes roaming much more straightforward, as NPN devices are public network subscribers and CAPEX and Operational Expenditure (OPEX) are shifted away from the OT company and toward Mobile Network Operators (MNOs), which will be responsible for network operation. An example of a dual-slice campus network would be Osram’s manufacturing plant in Schwabmünchen, Germany. A more comprehensive write up of the differences between both types of deployments for industrial deployments can be found in ABI Research’s 5G for Industrial Applications (AN-5122) Application Analysis Report.

Nuanced Approach Required as 5G and Private LTE Become Frenemies

RECOMMENDATIONS


Standalone NPNs offer businesses better control over their proprietary data, dedicated security credentials, and isolation from other networks for privacy and accountability reasons. However, Small and Medium-sized Enterprises (SMEs) do not have the expertise nor manpower within each factory or warehouse to manage the network traffic and security. For such companies, a dual-slice campus network with a shared RAN and control plane where the MNO manages the network control tasks while private network traffic remains within the campus is a recommended solution. Furthermore, non-mission-critical use cases would only arguably require a less dedicated network slice with a higher latency, which could possibly come from a proto-network slice of a public LTE network.

Private LTE networks are also a road to private 5G networks, and many early adopters understand that the fastest Time to Market (TTM) to deploy private 5G networks in their factories or warehouses begins with private LTE. Many vendors claim that only a software upgrade is required for the LTE radio and core network to be upgraded to 5G. However, the chipsets in the businesses’ User Equipment (UE) will need a hardware upgrade into 5G chipsets.

However, private LTE networks and public 5G networks may become competitors when the full suite of network slicing rolls around. Network slicing can provide a virtualized dedicated slice from a public 5G network for each use case on demand by the OT company through an orchestration service provided and managed by an MNO. In China, where spectrum is allocated by the government, the 5G network slicing approach is favored among MNOs, network vendors, and OT companies. This business model focuses more on utilizing Multi-access Edge Computing (MEC) to deliver low latency services to the OT company by bringing computing, storage, and processing capabilities to the edge. The 5G network slicing approach focuses on the installation of a MEC box, which offers a user control plane that an OT company can use to order and configure network slices. Revenue for this business model comes from the orchestration service of ordering network slices, which can be done as a subscription-based service deployment with additional payments from new network slices ordered. This is different compared to the business models of standalone NPNs, where revenue comes from the on-site installment of a distributed antenna system or small cells and a local core network.

However, the danger of the network slicing model is that it depends largely on the public network and runs the risk of downtime if the public network goes down. It is apparent that in China the industrial connectivity business model is focusing on 5G network slicing, skipping major investments into private LTE. In this business model, network vendors and MNOs work hand in hand to deploy industrial 5G solutions, with MNOs providing the orchestration services for network slicing through an enterprise dashboard. However, in other regions of the world where shared spectrum (such as CBRS) and unlicensed spectrum (such as MulteFire) exist, private LTE can be much more easily deployed by OT companies in these spectra with network vendors, whereas MNOs risk disintermediation. The private LTE business model serves as a stopgap for OT companies that want to begin their digital transformation journey model, offering the low latency and data security required for OT companies to begin enabling some industry 4.0 applications before 5G becomes readily available and offered. In any case, the approach taken in China is a “leap” into a 5G-powered Industry 4.0 economy, working hand in hand with its aggressive national 5G rollout, whereas the private LTE to 5G approach taken by most other countries, where MNOs risk disintermediation and are pressed to innovate solutions to profit from the enterprise verticals, are a more organic evolution.