A New Brand of Private Network Operators and Private Spectrum for Enterprises Put Telco’s Enterprise Ambitions at Risk

London, United Kingdom - 12 May 2020

With the popularity of private cellular networks growing among enterprises, there are currently initiatives in 15 countries for enterprises to deploy private networks, finds global tech market advisory firm, ABI Research. This includes both arrangements for enterprises to acquire spectrum directly from the regulator, as well as spectrum assets held by mobile network operators, that focus entirely on providing private cellular networks for enterprises. Either way, private cellular network operators are a growing threat to traditional Telcos.

“The rising number of these spectrum initiatives underpin the strong momentum for private cellular networks that we see within enterprises around the globe,” says Leo Gergs, Research Analyst for 5G Markets at ABI Research. “With the very economic pricing, we will see even more enterprises expressing interest, as the ecosystem for 5G connectivity matures.”

Just as the question remains of who will operate private cellular networks for enterprises, we see more and more new network operators entering the stage that are focusing on providing private cellular networks for enterprises. “Specialist operators like Anterix, Ambra, Citymesh, Edzcom and Tampnet will disrupt the market by offering business models to enterprises that follow an “Everything-as-a-Service” (XaaS) approach. Since all these specialist network operators have a system integrator background, they have the vertical-specific knowledge about requirements, pain points, and deployment complexity. These specialist network operators, therefore, enjoy an incumbent advantage over traditional Telcos in bringing connectivity to enterprises,” explains Gergs.

While large enterprises might have the manpower and the necessary financial resources to manage the network on their own, Gergs notes, “Globally, there are only round 10 million enterprises with more than 500 employees, while there are more than 700 million small & medium sized enterprises with up to 500 members of staff, which will look for third parties to manage a private cellular network.”

“To realize this immense revenue opportunity with SMEs, network operators need to leave their comfort zone and offer appealing solutions to them, which are fundamentally different from the offerings in the consumer domain,” Gergs suggests. These should center around monetizing services such as the provision of a particularly high bandwidth, certain low latency, or the provision of additional capabilities like network slicing. “All these costs should be captured in regularly occurring subscription fees to keep the amount of upfront financial investment as low as possible,” Gergs concludes.

These findings are from ABI Research’s Private Wireless Spectrum Tracker market data report. This report is part of the company’s 5G Markets research service, which includes research, data, and analyst insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight where opportunities lie.