• Private 5G networks are maturing quickly as they help drive digital transformation
• New report from GlobalData, commissioned by Nokia, shows enterprises expand their private networks as soon as they realise how powerful they can be
• Positive return on investment (ROI) achieved by some within six months of deployment and in some cases in just four weeks
• Emerging end-to-end solutions combine AI, new analytics tools and edge platforms to make private 5G even more powerful and attractive
• But it’s not all sunshine and rainbows

Unlike consumer 5G, which has failed to live up to its hype, private 5G appears to be delivering a positive impact for those that have invested in it, according to a new report from research house GlobalData that was commissioned by one of the leaders in the private wireless network infrastructure sector, Nokia. 

As you might imagine, the report, 2024 Industrial Digitalisation Report: Private wireless, edge infrastructure and applications, offers up a largely positive but still informative and interesting insight into initial private 5G network deployments that further boosts the technology’s reputation. The timely tome analyses how and why early-adopters decided to go down the route of deploying of private 5G networks, what they learned during the process and the benefits that accrued.

The report is based on detailed investigations carried out by GlobalData on behalf of Nokia, which in its most recent quarterly report boasted more than 730 customers for its private wireless network solution. The work includes inputs from100 early adopters of private wireless network systems, devices, applications and associated industrial edge technologies around the globe, ranging from Australia, France and Japan and through to the UK and US. It measures progress in the manufacturing, transportation and energy sectors in particular and paints a predominantly positive and optimistic portrait of the benefits enjoyed by those choosing to commit to private 5G.

The report contains plenty of interesting revelations, not the least of which is that enterprises are scaling private wireless networks and increasing the number of industrial sites included in their networks. Some 45% of responding organisations said they are leveraging their private wireless to support more than the initial use cases they had planned.  

What’s more, 100% of the enterprises contacted (yup, all of them!) expanded the use and reach of their private wireless networks and/or quickly deployed private 5G to encompass another location or locations. Furthermore, having done so, 78% of enterprises covered in the report made a positive return-on-investment (ROI) within the remarkably short period of just six months. 

In addition, 65% of respondents achieved a 10% improvement in the safety of personnel and 79% reported at least a 10% reduction in their carbon and other industrial emissions. The new report also reveals that 39% of enterprises with a private 5G wireless network have since deployed on-premises edge IT systems while 52% intend to do so as quickly as possible. 

Growth in the sector is impressive and it is maturing quickly. Just two years ago, many enterprises that had invested time, effort and money into private wireless technologies were still at the proof of concept (PoC) or pilot stages of their deployments, with private 5G being deployed usually in just a single location or to meet a single use case. Today, 45% of the enterprises interviewed are taking more and more advantage of their private 5G networks and expanding them in a drive to transform their businesses into fully digital enterprises. Of those so doing, 93% achieved positive ROI within a year while, as also mentioned above, 73% reached ROI within six months, and an astonishing 23% achieved that feat within just one month. 

The report forecasts that by the end of this year, the value of the global private wireless market will have grown by 49% compared to 2022 and that by 2027 the sector will be worth $8bn and will be growing at a compound annual growth rate (CAGR) of 23.3%.

Many more industrial sectors now deploying private 5G solutions

Initially, the prime case for deployment of a private 5G networks was based on the technology’s ability to provide connectivity where alternatives were unable to do so, but since then early adopters of private 5G networks have added edge capabilities to support complementary technologies such as AI or are adding drones to the mix of devices connected to a private network. These networks can also offer ultra-low latency capabilities down to the low single digit millisecond range. 

But above all, private 5G networks can provide consistent connectivity over large areas while greatly reducing the need for cabling. What’s more, the spectrum used guarantees better, more secure, and more consistent signal penetration in difficult surroundings such as factories, remote sites and subterranean environments.

Private wireless solutions also help lower the overall cost of doing business. Of the enterprises surveyed in the report, 97% reported reductions in their operating expenditure of which 59% made savings of 10% or more.

So, private 5G networks have many advantages but they are not without drawbacks that have to be taken into account when one is planned and deployed. 

For example, despite the deployment of improved security algorithms, private wireless networks remain vulnerable to cyberattacks. Thus, while apps on 5G networks are encrypted, the 5G NR (new radio) standard itself does not support end-to-end encryption. This is a chink in its armour that can leave it open to attack at certain critical points in network topographies.

Meanwhile, network slicing, while a valuable attribute of 5G networks, can, in cases where a virtual network is created for a specific functionality, become a potential weak point where hackers can breach the system and then propagate malware or spyware throughout a network and networked devices. 

Overall, though, it is evident that private 5G is transitioning from its infancy to established maturity while its full potential remains to be realised via the increased deployment of end-to-end solutions that combine AI and analytics tools and edge platforms. Such solutions will provide answers to the needs of a greater range of enterprises operating in different sectors.

David de Lancelotti, vice president of enterprise campus edge business at Nokia, commented: “The ROI of private wireless and industrial edge is proven. We help our customers improve worker safety, productivity, and reduce emissions while reducing operational costs by bundling private wireless and Wi-Fi connectivity, applications, and devices in one central on-premise edge platform. This will certainly drive the fast deployment of more use cases and lower the total cost of ownership.” 

Gary Barton, research director, enterprise technology and services at GlobalData, added: “Private wireless technology has clear benefits for connectivity and great return of investment. But more is to come with the deployment of AI, new analytics tools, and edge platforms. These technologies will help enterprises prepare for the future challenges, as they keep driving industrial transformation.”

In other words, “onwards and upwards”.