Sizing the private 4G/5G opportunity is harder than it looks

Ian Scales
By Ian Scales

Jul 29, 2021

via Flickr © Nathan O'Nions (CC BY 2.0)

via Flickr © Nathan O'Nions (CC BY 2.0)

  • Providing a private 5G network is not “just a case of banging in a base station and a bit of network slicing”
  • It’s a super-complex undertaking and with disaggregation and ‘cloud native’ software on the on-ramp it will get even more so

It’s clear by the number of aspiring players and parties that there’s a lot of interest in the emerging Private 5G network opportunity. (See Is private 5G a threat or an opportunity for telcos?)

But what’s slightly unusual about this particular market is the degree to which market size numbers vary wildly from one analyst house to the next; the time taken for the market to actually grow is also a major variable.

In this case, the numbers range from large to extremely large. Dell'Oro Group, for instance, says private 5G NR revenues remain on track to surpass $1 billion by 2025, which sounds pretty respectable for a market at its early stages. 

“Once we factor in all the various private wireless markets, we calculate that the overall market opportunity is rather large – in the tens of billions. But at the same time, we also expect it will take some time for the private wireless market to realize its full potential,” reports Stefan Pongratz, Vice President at Dell’Oro Group. 

ABI Research, on the other hand, is more bullish. It estimates that 5G private networks revenue is expected to grow from US$1.6 billion in 2021 to an astonishing US$65 billion in 2030, with a Compound Annual Growth Rate of 60.1%. 

IDC forecasts worldwide revenue from sales of private LTE/5G infrastructure will grow from $945 million in 2019 to an estimated $5.7 billion in 2024, with a five-year compound annual growth rate (CAGR) of 43.4%.

My analyst house contacts were by and large reluctant to comment on other companies’ market figures (not professional), except to mutter, off-the-record, that there was a “lot of hype about.” 

Richard Webb, Director of Network Infrastructure at CCS Insight, was similarly reticent but pointed out that gleaning figures from this particular market is fraught with difficulty. 

“There’s an incredible potential with a 5G or even 4.9G private network, but it’s a market that needs to mature,” he said.

“Market size is uncertain in terms of its solution set and its ecosystem. So there’s a lot to be overcome and proved. Plus, it’s a very demanding environment so it’s not just a case of banging in a base station and a bit of network slicing. There’s a lot of development still to go through, so I would just cool my heels a little bit on the numbers side.”

When it comes to trying to size any market it’s important to be clear of what you’re including, he says. Any private mobile network offer is going to be a cloudy mix of equipment and services from a whole range of players so it’s going to be very difficult for an analyst to assign value or predict how it’s all going to pan out. 

“I think when enterprises first hear about the concept of mobile private networks, they think, ‘Oh that’s great, let’s get our own spectrum and do our own thing’.” But, he says, it’s all incredibly complex.

“Every enterprise customer is going to need a customised solution that’s put together from 3, 4 or 5 different providers and Open RAN is going to proliferate that even further."

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