Telcos strive to find their place in the 5G private network ecosystem

IDC forecasts that worldwide private LTE/5G wireless infrastructure revenues will reach $8.3 billion by 2026, up from $1.7 billion in 2021.

The expectation is that over time enterprise investment in 5G mobile private networks will unlock new sources of revenue growth. Indeed, one of the more frequently asked questions in our industry today is how CSPs can identify and play to their strengths within unfolding 5G private network ecosystems.

So I was delighted to have the opportunity to discuss the subject with Allen Liou of Taiwan Mobile, Sami Luukkonen of NCS, Paul Hodges of Syniverse and Pai Achuth of Bridge Alliance, when chairing the panel Realigning telco expectation to address the complexities of deploying Campus 5G networks at Bridge Alliance’s CXO Digital Forum 2022.

CSPs’ 5G network slicing expertise, growing edge computing partnerships and strengths put them in a position to compete for advanced digital infrastructure service business. At the same time telcos are evaluating how to help enterprises innovate beyond connectivity. Meanwhile, the biggest prize lies in being the principal provider of an end-to-end vertical solution. However, as the panel discussed, CSPs need to think carefully before trying to claim it.

One of the challenges facing CSPs is the almost infinite number of use cases for enterprise 5G in campus settings. Manufacturers, for example, might be looking for 5G-enabled AI technologies that enable automatic optical inspection to identify and reduce errors on the production line, or applications that make it safer to operate mobile collaborative robots on the factory floor. Healthcare providers, meanwhile, may require applications that allow the secure, real-time exchange of high-density video medical imagery, or the gathering, pooling and analysis of vast amounts of national or regional anonymized patient data.

It is impossible for a single CSP to be good at everything. Instead, as one contributor pointed out, they should address horizontal services, in which they have established a legitimate right to play.

When it comes to horizontal services, for example, end-to-end security is an underexploited area where CSPs can claim strong credibility and build out expertise. Panelists also pointed to the opportunities that lie in turning telcos’ long experience in regulatory compliance and their nationally located infrastructure into a value-add. Many enterprises – and notably healthcare providers – must navigate complex data regulation, including national requirements for data sovereignty and privacy. A local service provider with a national network could be well-placed to understand and meet their needs. CSPs can also consider getting started by selling ‘as-a-service’ products as an entry point and then upsell private or hybrid cloud services – as well as multi-access edge compute (MEC), which Bridge Alliance and TM Forum have partnered to advance.

What price a network slice?

Cost can represent a significant barrier to enterprises that want to use 5G to support new manufacturing, healthcare or smart building services. Yet when it comes to pricing, CSPs possess a largely untapped superpower in the form of differentiated pricing of enterprise network slices, as one speaker pointed out.

For example, CSPs could offer commodity pricing for the connection of IoT devices that do not require low latency or much bandwidth and then charge a premium for supporting advanced technology video (ATV) security services.

Opportunities also lie in helping enterprises identify which slice to deploy for a given use case. Managing mobile vehicles or robots on a campus places different demands on a network than collecting data from fixed sensors or using augmented reality to design new products. As one panelist suggested, CSPs could pre-package network capabilities as enterprise service nodes. Telcos can also aim to carve out important roles within private MEC partnerships that bring together software companies, infrastructure providers, hyperscalers and system integrators to support diverse use cases.

Today much is still to play for in the burgeoning 5G campus and private network market. Competition, however, already looks set to center around the provisioning of innovative solutions to business problems, rather than product delivery. Whatever a CSP’s service strategy, this presents a profound shift that will require them to become much more like techcos and develop the culture and systems to partner in a platform ecosystem that prizes interoperability, flexibility, customer experience and solutions over products.