The fundamental capability of network slicing has been a key driver of 5G private networks, but while the value private networks is set to more than double from its current value by 2028, 5G technology is set to represent less than half of market spend by this time says a study from Juniper Research.
The study, Private cellular networks: a spectrum of opportunity, offered analysis and strategic recommendations for the private networks market, analysing the market drivers, challenges and trends, as well as key monetisation opportunities for both 5G and 4G LTE private networks.
It made the initial observation that market growth has been slow despite the clear advantages and increasing need for private networks. This was due to several challenges, including the cost and integration complexity of deploying these networks.
One of the key market drivers for private networks revealed in the research was digital transformation in enterprises. Many industries are working towards Industry 4.0, aiming to digitise industries; and Industry 5.0, which promotes AI, robots and smart machines working alongside employees
The topline finding of the research was that global private cellular network revenue will reach $12.2bn, representing a growth rate of 114% compared with that expected by the end of 2025. Assessing the forecast, Juniper said that given the slow growth of this market in previous years, this growth represents a pivotal shift in the market as more enterprises look to invest in private networks.
Yet of this figure, 5G will only account for $5.6bn of market value by 2028 despite 5G technology having been commercially available for private networks since 2019. Examining this, Juniper noted that private networks are themselves also a key driver for 5G adoption and present a key opportunity for MNOs and network operators to monetise 5G networks.
Although 5G provides key benefits such as faster speeds, lower latency, increased reliability and flexibility, and higher capacity, the analyst concluded that 4G and LTE currently meet the requirements of most mobile customers, making 5G an unnecessary expense and has inhibited its market growth. The lower operational cost of 4G technologies and its sufficiency in providing connectivity services to markets such as manufacturing and logistics are key drivers to the continued of growth of 4G private networks.
The study further highlighted that nearly 3,000 private networks will be deployed over the next two years, compared with just 2,500 in the lpst four years. The study found that the key catalyst of this momentous growth was availability of Network-as-a-Service (NaaS) business models, which are designed to reduce costs to enterprises while offering rapid scalability. Juniper also noted that NaaS enables enterprise users to more efficiently manage operational network costs through leasing private network elements.
“As the market grows, vendors must provide flexible business models such as NaaS to attract high-spending private network users,” said Research author Michelle Joynson. “This will also enable vendors to expand private 5G deployments as businesses are better able to maintain the capital and operational cost of the network.”
