‘The pricing is highly attractive’ – Siemens applies for private 5G spectrum licences
Siemens has followed country-mate Bosch to apply for spectrum licences in the 3.7-3.8 GHz band in Germany. The firm will seek to manage its own LTE and 5G networks in at least six ‘digital’ factories, it is understood.
Klaus Helmrich, chief executive of the company’s digital industries division told German business newspaper Handelsblatt: “The pricing makes 5G highly attractive.”
Bosch and Siemens are taking the same line on industrial 5G. Last week, in separate showcases, the pair both announced trial 5G networks with industrial units from Qualcomm, timed to coincide with the annual Smart Production Solutions (SPS) event in Nuremberg.
Bosch was showing industrial devices using time-sensitive networking (TSN) over a live 5G network at SPS; Siemens was showing ‘driverless transport systems’ using a live standalone 5G network, also in test spectrum from German regulator BNetzA, in its own automotive test centre.
Bosch has confirmed spectrum applications have gone to BNetzA for at least two plants. Siemens told Handelsblatt it has applied for the same, at its six ‘digital factory’ sites, established both as showcase venues and progressive production facilities.
Both companies will build out their 5G networks from early next year. “We want to show in lighthouse projects what is technologically possible,” commented Helmrich in Handelsblatt.
The moves by both companies to formalise their interest in private owner-operator 5G appear to throw into relief comments by Finnish vendor Nokia last week, that the existential threat to the traditional operator set had been overplayed.
John Delaney, associate vice president for European Mobility at IDC, noted: “[There is] big pent-up demand [for private LTE and 5G] in Germany, which is home to about one third of Europe’s manufacturing sector.”
It might be noted, Nokia’s comments last month sought to reverse, or at least set in context, its previous statements about ‘going it alone’ on private LTE provision, in the event its old operator compadres did not seize the opportunity. Its change in tone could be down to a “telco customer relations issue”, noted commentators.
Volkswagen, the largest automaker by worldwide sales, has also stated it will start building its own 5G networks in Germany in 2020. The company issued a tender to network equipment vendors as long ago as April.
BNetzA has reserved 100MHz of prime mid-band spectrum, at 3.7-3.8 GHz, for Germany’s industrial sector, creating some consternation among telecoms operators, which have had a monopoly on wireless spectrum for 3GPP technologies until now.
The regulator has set a nominal fee of just €120 per year for 60MHz of bandwidth, for so-called local ‘campus’ coverage of up to 10,000 square metres. At the same time, ownership and management of the 3.7-3.8 GHz spectrum, as stipulated by BNetzA, is flexible.
It will, in many instances, be managed, at least, by specialist network operators, including the enterprise departments of public network operators, notably Deutsche Telekom, Vodafone and Telefónica in Germany.
For its part, Deutsche Telekom has struck a measured tone on the prospect of industrial companies working with vendors like Nokia and Ericsson – and even with ‘middle-men’ industrial OT providers like Siemens – on their own 5G projects. The market will split at the beginning, the company told Enterprise IoT Insights in April.
“Large enterprises like BMW and Siemens might be ready to run their own networks. But there are lots of mid-sized firms that don’t want [that]. In Germany, there might be 20, maybe 30, companies that will manage networks on their own. None of the others want to do it,” said Herbert Schüttler, vice president of 5G corporate customers at Deutsche Telekom.
Meanwhile, Audi, part of the Volkswagen group, but sitting on its own tranche of 5G test spectrum, told Enterprise IoT Insights in May that “everything is on the table”. Henning Löser, head of Audi’s production lab, commented: “We have contracts with companies that help us operate our wi-fi networks, and we will most likely do the same with 5G.”
Siemens, itself, has a deal with T-Systems, Deutsche Telekom’s IT division, as well, to combine their offers in operations and information tech (OT and IT), respectively, with the latter also plumbing in its communications services.
They will bring higher levels of connectivity and automation to enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM) and manufacturing engineering systems (MES), they said.
“The new solutions can help companies leverage a full range of technologies, which have the potential to reinvent German industry, including cloud, 5G and edge computing,” they said. But Handelsblatt cites industrial circles, that the partnership is not exclusive, and Siemens customers will make their own choices about industrial 5G provision and management.
Germany’s move to liberalise spectrum for industrial 5G, as a springboard for economic advancement, has been decisive.
It has followed quickly on the heels of the US government’s re-farming of Citizen Broadband Radio Service (CBRS) spectrum, between 3,550 MHz and 3,700 MHz, for local networks, and pre-empting the UK government, notably, to ear-mark frequencies at 3.8-4.2 GHz, 1,800 MHz, 2,300 MHz, and 26 GHz for local operators.
Delaney commented: “There is growing interest from private companies in using 3GPP cellular technology (LTE and 5G NR) to complement or even replace traditional private networking technologies, and in most cases they would prefer to deploy it in spectrum that is not accessible to third parties.
“Germany is the first country to licence spectrum in the frequency bands allocated to mobile telecoms for exclusive use in private networks. If it proves successful, some other European countries could follow suit.”
The shifting dynamic for the operator community is real, he observed. “The more spectrum [that] is allocated to private networks, the less will be available for increasing capacity in public networks.” At the same time, the perceived jeopardy is overstated, he said, as Nokia, pushing hardware, implies.
“True, private cellular deployments could erode some of the potential future use of public mobile networks in private companies’ premises under VPN and network slicing arrangements,” he said.
“But it could also give rise to some new service opportunities for telcos to help private companies set up and build out 3GPP networks – which is far from easy – and perhaps also to manage/operate those networks – neither of those activities is part of a manufacturer’s core business.”