Industry 4.0 at tipping point for telcos – the story that would have been told (but for COVID-19)
Mobile World Congress (MWC) in Barcelona in February is the major venue and the key date for the telecoms industry. Yes, the cards have been dealt, but the show works as a useful barometer of its high mood. It kick-starts the season, effectively, after the new-year lull.
This has been particularly notable as the promise of industrial change has come into view – as the periodic refresh of telecoms gear combines, at once, with rapid advances in data analytics and compute power, and puts so much into play.
Hannover Messe, a couple of months later, provides a counterpoint to the future-selling of MWC. The setting is different, and the story is changed. It swaps the early-season sun of the Mediterranean for the late winter chill of Middle Europe, and the giants of telecoms for the beasts of industry.
Still, the German showcase, which dwarfs MWC for size, has rapidly become a second home for telcos interested in selling digital change – just as Bosch, Siemens and Volkswagen now stalk the halls at the fairgrounds in Barcelona.
By the end of April, the wide-eyed story-telling of MWC butts up against the caution and paranoia of the industrial set, and the truth (perhaps) comes out. The two events bookend the early-season hype cycle for the telecoms sector, and set the narrative for its interplay with the industrial set for the year ahead.
For Enterprise IoT Insights, treading the line between telecoms and industry, this is really the only story in town. For an old telecoms hack, it has replaced the yawn-making narrative of shrinking margins and over-the-top (OTT) providers, the geekdom (ahem) of network ‘softwarization’ (eughh), and the chagrin of hard-to-love utility provision, pumping airtime to homes and offices.
There is new hope and new jeopardy, and MWC and Hannover Messe have been, for several years, the best places to plot the tale. But this year, there is nothing to write. The 2020 editions of these shows have been erased from the Spring conference schedule amid panic about coronavirus – one cancelled, one postponed (pending a cure-all for event management).
The storylines are harder to perceive, without the main protagonists gathered across two venues. But they are still there, and recent announcements, probably scheduled for MWC, mean we can start to join the dots. And the picture is interesting.
But what’s the story? The big question for the Industry 4.0 movement, at this point, is about connectivity, and the role of traditional mobile operators in its provision. As Federated Wireless has noted, the IoT solutions are there, even as the market remains fragmented; enterprises have played around already, and the supply chain for hardware, software, and compute-ware is working.
The big cloud providers, corralling the smartest players in the ecosystem in their IoT platforms, have it sorted. But connectivity – and we are talking incoming 5G connectivity, supporting ‘massive’ density (mMTC) and ultra-reliable control (URLLC), rather than low-level sensor networks (in various flavours, but available nonetheless) – remains a conundrum, which is only just starting to unravel.
The liberalization of spectrum for industrial reformation, led by the refarming of the CBRS band in the US, followed by Germany, the UK, and Japan with similar mid-band allocations for their industrial engines, has thickened the plot around the role of cellular in industry.
Spectrum is coming available; it is just a matter of how the networks using it are designed and operated. How will private networks running in industrial spectrum co-exist with private instances and private slices of public 5G networks?
Who will be in charge when the networking gear comes in-house? How will these networks be used, and how will they combine?
At one point, the question was even asked whether or not operators have a role to play. The revolution is not just that the world will go from seven million public cell sites to 15 million private cell sites, as the market has guessed, but that it will go from a handful of networks per country to many millions of them, potentially. Anyone can be an operator, now, the market said.
At once, the perennial threat that OTTs will muscle in on telecoms provision had mutated into a brand new horror show, where the masters of industry, better versed in the control and paranoia of mission-critical operations, will serve the networking requirements of every vertical going. That was the story a year ago, as the Industry 4.0 bluster of MWC was undone in Germany.
In most of the halls in Hanover (all, except one), talk of 5G was greeted with a roll of the eyes; the idea of letting telecoms operators anywhere near the controls was waved away. The industrial sector holds the cards, the story went. What a story; like England in the knockout stages of the World Cup, ejected from the game it had invented.
The only traditional telecoms company at MWC last year with the same hard-ball message was Nokia, which also showed up in Hanover with Qualcomm, demonstrating industrial 5G next to Bosch, Siemens, and Volkswagen. Word from Nokia, then, was that enterprises will build private networks on their own, with its help, if operators do not move quickly.
To its credit, Nokia made the play; it has pushed private LTE hard, as a forerunner to industrial 5G, with handy contracts at home (mostly with Ukkoverkot), and an active role in CBRS rollout and MulteFire for unlicensed LTE. It has 130-odd private networks in the bag, it claims. By contrast, rival kit-sellers have been cautious, and stopped short of declaring they will go directly to enterprises.
Ericsson told MWC 2019 it will stand behind its operator customers at every turn, at least until they permit it to engage directly. Huawei, harder to pin down, has just told Enterprise IoT Insights it will do the same. In truth, the differences are more in their tone; each would prefer to go mob-handed with their old familiars, but will sell to whoever wants to buy – and enterprises with their own spectrum may yet cut operators out of the mix.
Except recent announcements, a year later, make clear operators will be closely involved in this space, even as new network operators and software suppliers emerge. They said so, all along. But the proof has started to emerge, even as coronavirus has robbed them of their biggest stage.
Bosch, Siemens, and Volkswagen have all taken licences in the 3.7-3.8 GHz industrial band in Germany in the last few months; Ofcom has licensed a great chunk of UK airwaves for shared and private usage; the US is bowling ahead with CBRS deployments. But these have not really developed the story about who owns 5G service provision in the industrial space.
Instead, the biggest narrative twist has come with Lufthansa and BMW, which have both taken 5G spectrum, deployed 5G networks, and engaged 5G operators, at least in trial-mode. Nokia is involved in one and Ericsson is involved in another; the kit supplier for a third deployment (a second by Lufthansa) has not been named.
Most interestingly – in terms of how mobile operators will or won’t manage private LTE and 5G networks that do not utilize their own spectrum – both Deutsche Telekom and Vodafone have found a way into the Lufthansa and BMW deployments. Deutsche Telekom is involved in one, Vodafone in another, and Lufthansa is running one without an operator at all.
True to form, Nokia is involved in this third project, without an operator attached, which uses the privately licensed 3.7-3.8 GHz band. By all accounts, Lufthansa is also managing the Vodafone deployment, with the unnamed vendor. This is curious; Vodafone is offering neither spectrum or network management into the bargain, but claims a consultancy role and talks about the boon of industrial 5G for all.
But Ericsson has made good on its promise to fall-in behind its operator friends, and bring business to them where it can. It did just this with Telefónica, which it drafted into a private networking contract with Mercedes-Benz in Germany. Deutsche Telekom, with which it is engaged at BMW, has said it is working with Ericsson as its preferred supplier for industrial LTE and 5G gear.
The BMW project, at a manufacturing plant in Leipzig, does not use the 3.7-3.8 GHz band. Instead, it establishes a dual-slice private LTE ‘campus network’, hived off Deutsche Telekom’s public LTE network. But the announcement says the duo are pioneering a 5G dual-slice solution that integrates the 3.7-3.8 GHz “industry spectrum” as well.
Deutsche Telekom has installed similar dual-slice LTE setups using publicly-licensed bands with German lighting company OSRAM, German car parts maker ZF Group, and the RWTH research institute at Aachen University. It has projects in Austria, the Czech Republic, and Hungary as well.
Ericsson has been involved in each case; it has a research deal on URLLC with Audi as well. These are big names and major wins, even if their remit remains exploratory.
By contrast, Nokia, with trouble around 5G in its primary carrier business, is busy with specialist providers in ports and mines and other industrial engagements; it has not announced such a rush of high-profile appointments, and none (in memory) with tier-one operators around private networking in either enterprise-held spectrum or segments of public network.
Of course, this is just a join-the-dots exercise after the recent rush of MWC-timed announcements. Everything will change, and the narrative will develop; importantly, it will also take in the myriad of smaller network software vendors and the greater swathe of industry, which have suffered most in terms of media exposure from the Barcelona-Hanover shutdown.