Could Industrial Parks be another lucrative opportunity for neutral hosts?
The trends shaping enterprise transformation
Germany has the Rhine-Ruhr region, the center of its industrial heartland, where talent gathers and drives Industry 4.0. South Korea has its vast Pearl River Delta Megalopolis. And Mexico has the Bajio region – the Mexican Industrial Diamond – home to a rising tide of Industrial Parks.
Industrial Parks have become big business in Mexico as international organizations increasingly move their logistics to Latin America’s second-largest economy. With “nearshoring” on the rise in an attempt to minimize supply chain disruptions, these parks are arriving thick and fast and provide a very clear opportunity for network suppliers across the board.
The scale of growth is vast. In 2022, industrial developers increased the speed of building new projects by 70% over 2021. While Siila reported an anticipated total of 47 new industrial parks to be built between 2023 and 2024, all underpinned by a wealth of shared facilities.
Industrial Parks are the tip of a $14bn iceberg
Covered extensively by the global media, these parks are viewed as a catalyst for Mexican economic growth. While for enterprises around the world they provide an undeniably attractive package of shared infrastructure, streamlined processes, skilled labor, and collective security. In many ways they provide a showcase for the value of the win-win neutral host model.
Neutral host refers to infrastructure companies renting their assets to multiple tenants. And one particularly outstanding opportunity lies in offering seamless private wireless networks on a subscription model to the enterprise tenants of Industrial Parks.
Enterprises looking to embark on the path to digitalization gain massive productivity benefits from private wireless networks. The sectors especially ripe for this technology include transport infrastructure – like seaports, railways, and airports – the energy sector, manufacturing, and of course, the real estate sector, including Industrial Parks.
Each sector will have its own industrial ecosystem hubs. And these “hubs” - which can be found all over the world, whether that’s an airport, factory or Industrial Park - when connected via a private wireless network, drive the value of Industry 4.0. And represents a total addressable market of more than $14bn worldwide.
Private wireless is big business
Boldyn Networks, one of the largest shared network infrastructure providers, announced this November that it would acquire the private networks business unit of market leading neutral host, Cellnex, for $32 million.
Boldyn is already known as the network behind private deployments like Moray East, a large wind farm in Scotland, and the aim of the acquisition was to place it at the forefront of driving digital transformations and industry 4.0 innovation.
Any move to neutral host fundamentally changes enterprise buying behavior. Traditionally an enterprise would buy a private wireless solution directly from an equipment vendor or Communication Service Provider (CSP). Through this alternative model, the enterprise tenant subscribes to a connectivity service – for example from the Industrial Park – with a monthly fee, based on the square footage covered, and additional services, like video surveillance, added on.
Everyone gets their cut. The Industrial Park in this example pays a monthly fee to the neutral host for the usage of its infrastructure and additional services. The neutral host in turn pays the mobile network operator for spectrum capacity, and also the management of the private wireless network infrastructure if they subscribed to the complete “as-a-service”.
Network as-a-service ultimately refers to a collaboration where the neutral host provides the infrastructure, and the mobile operator provides the spectrum. This makes deploying new infrastructure easier and enables CSPs to maximize the long-term value of their spectrum.
Network as-a-service provides opportunities for everyone
This burgeoning opportunity in Industrial Parks, and across the wider global potential of Industry 4.0, provides a win-win model for everyone in the space.
For neutral hosts the wider ecosystem provides a ready-made market for connectivity and upselling additional services. For CSPs it offers the chance to increase spectrum monetization. This synergistic relationship then increases the value of Industrial Parks looking to gain competitive advantage, driven by seamless, best-in-class, connectivity. , moving to an Industrial Park 4.0
This change in the market – and improved business model – provides untold advantages for enterprises who need modern always-on connectivity to drive their 24/7 businesses forward. Those that wish to stay ahead must reap the potential of Industry 4.0 and eventually transition to an Industry 5.0 world.
Through this approach enterprises gain the rewards of modernization, maximize their sustainability, and easily trial new use cases at scale and with limited risk. This chain reaction means they can effortlessly provide value for their customers and help deliver the kind of transformation that helps society as a whole. Industrial Parks in Mexico, with connectivity at their heart, and these small industrial ecosystems have potential to drive a similar value all around the world.