The Impact of the Top 3 Strategic Imperatives on the Asia-Pacific (APAC) Private Wireless Network Solutions Industry

Innovative Business Models

Why:

• Effectively catering to the needs of the enterprise segment is seen as a means for mobile operators to drive revenue and better returns on investment (RoI), especially from 5G infrastructure investment.
• Enterprises are deploying private wireless networks to facilitate digital transformation and enable new use cases for improved business efficiency, production, and output.

Frost Perspective:

• To effectively serve the enterprise segment, legacy wired networks will eventually transition to private wireless networks to serve mission-critical, business-critical, and industry-based use cases across industry verticals.
• Over the next 3 to 5 years, the demand from the enterprise segment for private wireless networks will increase significantly. Industry verticals that will be the focus of growth include manufacturing, transportation & logistics, and energy & utilities.

Disruptive Technologies

Why:

• The integration of private wireless networks with 5G, multi-access edge computing (MEC), and the Internet of Things (IoT), particularly on platforms, provides opportunities for wider and more cost-effective private wireless network deployments.
• Alternative technologies, such as Wi-Fi 7/7E, will impact the growth of private wireless networks.

Frost Perspective:

• In the next 1 to 3 years, MEC will be essential in complementing and enhancing private wireless networks. MEC will be critical when multi-site private 4G and 5G networks are a concern.
• Over the next 3 to 5 years, private 5G wireless networks are expected to better address mission-critical requirements such as higher speed, mobility, and lower latency.

Competitive Intensity

Why:

• The liberalization of spectrum bands for the private wireless network sector by local governments has increased competition in the market as usage can now be driven by both licensed and unlicensed spectrum.
• There are many market players in the space; however, few have made significant headway in the development of end-to-end private wireless networks.

Frost Perspective:

• Leading solutions providers such as Nokia, Ericsson, and Celona currently dominate the private wireless network solutions industry in terms of the number of private wireless network deployments.
• In the next 3 to 5 years, as more enterprises deploy their private wireless networks, the opportunity to support enterprises with aspects of the network’s deployment will be sizable.

Growth Drivers

Ongoing Digital Transformation is Driving Growth: Digital transformation is driving implementations of automation, artificial intelligence or machine learning (AI/ML), analytics, enhanced security for sensitive information, and private wireless networks to improve operational technology efficiency and drive new revenue streams from new use cases by introducing innovation.

Legacy Technology Is No Longer Able to Meet the Revised Business Needs: Digital transformation is raising the benchmarks and creating new requirements, for example, for 5G to enable high bandwidth, real-time capabilities, and mission-critical applications, including those catering to health and safety. Current wired and Wi-Fi networks cannot sufficiently meet the revised needs, and hybrid implementations, for example, Wi-Fi with 5G, may not be cost-effective and may limit new use cases.

The Need for Ubiquitous Connectivity is Driving Growth: The decision to cover areas that lack public network coverage, including indoors, remote areas, and blind spots, depends on mobile RoI calculations. This means that some of these areas may never be covered by the public network, even though there is a need for connectivity in these areas.

The IoT, Powered by 5G, is Driving Growth: Growth in massive IoT and massive machine-type communications (mMTC) within commercial and industrial settings is being driven by the introduction of 5G Reduced Capability (RedCap) in 3GPP Release 17. Within a private wireless network, the vast amount of data from sensors, machines, and workers can be managed and analyzed effectively.

Growth Restraints

High Infrastructure Deployment Cost:

On certain business models offered by mobile operators and within enterprise-owned private wireless networks, the initial outlay to deploy an end-to-end private wireless network can be on the high end for enterprises, especially if leveraging 5G. As such, most deployments are still on 4G or with 4G as an option. 5G is mostly implemented by enterprises that have justifiable outcomes.

Technical Skillset and Expertise for the Deployment and Management of Networks:

To overcome implementation complexities in enabling critical elements such as interconnectivity and interoperability, enterprises will typically outsource private wireless network deployment and maintenance, which will increase operational costs.

The Use of External Device Management Solutions, Which can Introduce Risks:

Having to depend on external device management solutions that are located on-premises or outside the private cloud can introduce security risks for enterprises.

Security Concerns on Hybrid Networks:

Data protection can be a challenge for enterprises that need to leverage public networks to connect multiple location bases. Public networks face a constant threat of malicious activity and do not offer a service level agreement (SLA) on sensitive data delivery.