Private 5G networks are growing in popularity with more trials and projects getting started. According to Analysys Mason, the number of publicly disclosed projects using 5G rose by 32.5 percent from Q1 2022 to Q1 2023 and 5G deployments made up more than half of all LTE/5G deployments. Despite this growing popularity, the number of companies able to build and complete private 5G deployments remains low. The continued growth of the sector, predicted at $5.2 billion in 2027 by IDC this year, will hinge on filling the gaps beyond providing the network side alone.
#1: Building the business case for 5G networks will be about data and applications, not connectivity
According to the GSMA, more than half of all operators have made enterprise 5G network services available that go beyond simple connectivity over the past year. This ability to create and run private networks is the first step, but creating full business cases for these deployments is still at the start of development.
The most common use cases developed so far are aimed at areas like manufacturing and industry, where connecting up devices and supporting connectivity in a specific location is understood. The role for private 5G here is to remove some of the cost and headache associated with running the network. However, this is not enough to convert many companies to using private 5G, when there are other technologies available that they think can deliver the same result.
In order to make the business case clearer for private 5G - and to stress that this is something that other technologies can’t deliver - there has to be more emphasis on the value proposition in the first place. While the connectivity element is essential to making these business cases work, it is not the overall goal. To develop these opportunities further, companies need help to understand how the data that they create can be used more efficiently with private 5G compared to other approaches. From a network perspective, the applications that run on private 5G have to be able to take advantage of that network.
#2: Telecom companies will expand more in cloud-native projects for themselves and their customers
Today, most modern applications are built to take advantage of the cloud. Developers can build and re-use components to assemble the applications that the business requests, using a mix of ready-made applications, third party services and open source software. This assembly can be completed more quickly than building stand-alone or monolithic applications. The business logic can be separated from the underlying software, which is made up of microservices components connected via APIs. These components will run in software containers that are managed with Kubernetes, the open source container orchestration platform.
From a software perspective, applications rely on those connections to each other to function. However, each component can be swapped out behind the API. Want to implement a different service or open source component that can do the same job, but cheaper? For the rest of the application talking to the API, there is no change. Similarly, does your application need to scale up? Running in containers makes this simple, as more container images can be created to cope with the demand. When demand goes down, those container images can be deleted.
However, the biggest challenge for many companies - and for many telecom operators - will be putting in the right infrastructure to run these cloud-native applications. While the network will be active, designing the applications and data sides will need more thought. Operators have to marry the availability and speed of the network with cloud services that can deliver value at the same pace. Telecom operators also run their own tech stacks, and they want to use the same cloud-native design philosophy for their internal applications rather than stick with traditional datacenter deployments.
At the same time, telecom companies will not want to be tied to a specific producer for the reasons of cost and lock-in. Instead, they will look at combining private 5G with cloud-native applications and infrastructure, and will double down on Kubernetes. For application infrastructure like databases, Kubernetes operators make it possible to run those components while not being tied to a specific provider or vendor. Telecoms companies want the flexibility to run how they want, rather than relying too much on any one technology provider.
#3: Telecom companies will use more open source technologies
In 2024, using open source components will allow operators and service providers to deliver private 5G networks alongside the services that customers want at a lower cost. This will make the business case easier to justify for many enterprises, opening up more market opportunities.
As this area gets more commoditised, the open source approach will complement private 5G and make it easier to deliver on the value opportunities that enterprises are looking for. However, it is the data, software and cloud-native applications around the network that will turn potential opportunities into real world implementations. Telecom companies can use open source to build applications and services internally, and to create new offerings for customers, at faster rates than they can achieve using proprietary technologies or by developing all their own software. While the telecoms industry has been shy of open source in the past, it will have to develop and use this software more in order to keep pace with cloud service provider offerings.
