‘5G is not a special flower’ – a two-sided tale of telcos’ trouble with enterprise 5G
If the main event – the big report from which this article is taken – makes the case for operator-led management of private industrial 5G networks, with a primary investigation into how and where they might run operations, then the below Q&A session veers away somewhat from this neat narrative.
If you want the alternative view, more bolshie and more suspicious, about private 5G management, and the likelihood that operators will build dedicated network operations centres (NOC) to serve busy industrial enclaves, then this is the place. Here we have four market analysts, plus two private network providers, to tell the private 5G story from the other side. And it ain’t always pretty for the carrier set.
For the rest of the report, on Private 5G Enterprise NOCs (see image at bottom of the page), go here; for the attendant webinar on the same subject, including panellists from ABI Research, Vodafone, and Radisys, go here.
Do you expect operators to manage the private LTE / 5G networks for enterprises – in most / some cases?
Dean Bubley / Disruptive Analysis: “I can see this in some cases [and some] countries – although mostly in markets where operators have established non-5G enterprise businesses. In the end, it will likely align with their ‘fixed’ connectivity NOCs. Mobileplus-5G isn’t a special flower.”
Robert Curran / Appledore Research: “The job of running a macro network is completely different from running an enterprise network, even a large one. While operators are focused just on getting 5G up and running, enterprises are more likely to assume the network ‘just works’. For enterprises, the access technology should be invisible. If it needs to be ‘managed’ in the way a telco understands, then it is probably not ready for enterprise use.”
Bob Gessel / Ericsson: “Management of private networks is a strategic decision for each operator. The deployment scenario dictates the model. AT&T is offering on-prem radio and MEC as a commercial [enterprise] solution; meanwhile, Deutsche Telekom’s campus network [offers] different aspects of on-prem and centralized [cellular and compute], run by Ericsson and Deutsche Telekom, respectively. Others, less experienced with private cellular. are asking for support from vendors to take on delivery and operations. It depends on their appetite for complex enterprise solutions, [and] desire to take operational responsibility. Certain industries may have SLAs operators are not willing to own; in these cases, vendors and system integrators will step in.”
Under what circumstances will operators build dedicated enterprise NOCs to run private 5G networks? When will they manage them from centralised NOCs?
Bubley: “I can imagine this being appealing to very large campus sites like ports and airports that are essentially multi-tenant mini network operators. These might need a dedicated NOC. [Alternatively, there may be opportunities with] public safety and the military, where the operator has a long-term contract, [and] maybe with health authorities and major industrial zones in large countries – such as in the oilfields in the Gulf of Mexico and Texas, [economic zones like] Shenzhen in China, and industrial heartlands in Germany.”
Curran: “The idea [of local NOCs] runs counter to what telcos talk about all the time: automating so the network manages itself. Operators like Elisa in Finland and Rakuten in Japan are architecting networks to avoid the sort of old-school NOC that telecoms has relied on for decades – because it does not scale well for networks that are constantly changing. One observation about private 5G networks is just how different they are from one another: the physical layout, the day-to-day operations. It is difficult to imagine a centralised NOC being able to make much sense of a specific enterprise network.”
Leo Gergs / ABI Research: “It is too early to know whether dedicated NOCs will appear. At the moment, operators aim to support enterprises through existing centralised NOCs… [And] the role of centralised NOCs will become more important with slicing.”
Pablo Tomasi / Omdia: “You can distribute NOCs if the market is ready for private networks – if there is ‘vertical’ spectrum and a developed ecosystem, educated on private 5G. The idea is the same as with MEC coverage zones; operators may need to find a compromise between performance and business opportunity. But they are trying to shift the dynamics away from fully-private into more traditional territory – into public-network flavoured private networks. They would prefer the enterprise market to go towards hybrid private-public networks.”
Gessel: “Big operators are unlikely to distribute NOCs for private 5G. They may use regional NOCs to be a step closer. Smaller ones have more local engagement, and may gain more appeal in these customer geographies. But big operators want to take advantage of existing infrastructure, particularly if they are deploying private cellular with licensed spectrum. They see this as a cost reduction to avoid separate management systems. Centralised or large regional management is the trend. There are also layers of support ranging from full operations and SLA commitments down to simple performance and fault monitoring. There are cases, however, when the operator will want separation between the commercial and private network operations and management.”
Tadhg Kenny / Druid Software: “Mostly, business or mission critical deployments require KPI monitoring in the operator NOC as part of customer SLAs. [But] their [NOC] model is a centralised one, historically, and they are so far using existing support centres.”
What role will system integrators (SIs) play? Will they provide localised network management, rather than operators? If this is the case, what is the role for operators?
Curran: “SIs and consultancies seem more likely to be the primary point of contact with the enterprise. Operators may hold the keys to spectrum in some territories.”
Kenny: “SIs are helping operators deploy and manage these networks, like they do for operators that have always outsourced for macro consumer-based coverage – such as for mast, antenna, and DAS installations and maintenance. The role of the operator is to sell the overall private network solution to their enterprise customer base.”
Gessel: “SIs that have network infrastructure and services arms are playing a key role in deploying and operating private networks. They are also leaning on operators and vendors to subcontract – or re-sell – operations and support services. SIs often play key general-contractor roles for the solution. Some customers prefer to work through an SI partner as a single responsible party.”
There is a sense that SMEs will outsource management, and large and critical operations will more likely invest in skills and manage their networks in-house. Do you agree?
Curran: “SMEs wanting to outsource makes sense. Larger corporations will have a greater desire for control and ownership, and value the ability to change and adapt quickly – which are, sadly, not characteristics commonly associated with telcos.”
Kenny: “Yes; SMEs tend to outsource. Time will tell how big a role operators will play here. There are plenty of operators and SIs stepping up in countries where spectrum is available to provide similar services – some with neutral host capabilities or as network service providers. [But] we’ve seen large energy providers build up considerable in-house capabilities over the last few years with LTE, and now with 5G.”
Gessel: “It is unclear. Smaller, simpler networks are being designed for self-management… [and] there is an expectation [SMEs] may prefer this option. For SMEs that already have a strong relationship with operators, then it will [likely] move in that direction. SME engagement in private cellular networks has been more limited. We see school districts interested with CBRS, where some are leaning on their own staff, some are working with SIs, and others considering operators. Cost is the biggest factor.”
Tomasi: “SMEs are more likely to outsource management, and I see a good opportunity for operators. There are, however, a few caveats. Firstly, few operators have a clear strategy; while all of them talk about SMEs, most of their activity is focused on larger accounts. This could leave it open for other players, such as hyperscalers. Secondly, the type of industry and the size of the SME will affect how operators are perceived, which will impact the opportunity. It is unlikely, for instance, a larger-sized SME running business-critical machinery on a factory floor will see operators as the prime choice. Large enterprises will tend to look to their own resources. But this will evolve and while some will always want to manage the network in-house, others will be outsourced as their partners build trust.”
Gergs: “It will depend on the enterprise’s capabilities. Large firms will tend to have all of their functionality and support on site. Whereas the SME market, where space is limited and knowhow is limited, will tend to [outsource to] some centralised NOC. There is a question about the role operators will even play with large enterprises. It is going to be fairly limited – certainly with on-site troubleshooting and network support. Enterprises want flexibility, which is where the opportunity is. If operators can’t depart from a central NOC, their chances will be limited. But certain operators are moving away from that very rigid view. Deutsche Telekom, say, allows level-one and -two network support to be handled by the enterprise, on site, and last-line support comes from the operator.”
The Industry 4.0 movements is working to simplify cellular for enterprises, so it workss off-the-shelf like Wi-Fi. If complexity is abstracted from the network, what is left for operators – when, the argument goes, anyone can be an operator?
Bubley: “I don’t think open RAN has much relevance here. It’s more that there’s a whole host of new service providers – from tower companies to cloud companies to critical comms providers – that will be present in the market. There’s scope for operators to differentiate. But they have to work harder.”
Curran: “That is the question. The skill of ‘being an operator’ just isn’t something enterprises see as valuable. That’s the issue. For operators to have relevance, they have to look and behave more like SIs and consultancies – and get closer to the customers’ operations, and build solutions to business problems. In the end, connectivity is secondary – important, but not an end in itself.”
Tomasi: “The complexity is hidden, not eliminated. Overall, I see it increasing as the market matures – and this will feed a vicious cycle for new tools and automation. The example is an enterprise deploying networks in different countries, with different needs. I do not see a market any time soon where private networks are available off-the-shelf – with no need for deployment support, say, or integration.”
Note, this conversation is taken from a longer editorial report, on Private 5G Enterprise NOCs (see below); to access the report, click here, or on the image below. For the attendant webinar on the same subject, including panellists from ABI Research, Vodafone, and Radisys, go here.