Hard lessons for private 5G as ‘light-speed’ market ‘fractures between hype and reality’
The chair’s address ahead of an afternoon session on private 5G networks at 5G World in London today (September 22) brought some perspective. The market promises so much but the promise gets over-hyped, said Pablo Tomasi, principal analyst for private networks at Omdia. There is serious work for the industry to do, he said, even just to get close to realising its true potential. “There is a fracture between reality and expectation,” he said.
It is the story of 5G, of course; the private networking market is just a high-concentrate version of the industry’s generational struggle to squeeze new juice out of new pipes. In truth, the 5G World event reflected the market’s hype around private cellular, to an extent; much of the show floor was taken with vendors hawking componentry for private LTE and 5G networks, and Tomasi-and-co had the A-track agenda for the post-lunch session on the first day.
But Tomasi was refreshingly direct; the realisation that designing, building, and managing private 5G is hard remains novel, he suggested. “Until a few months ago, the assumption was that private networks represented a quick and easy win, with lots of revenues, and enterprises jumping in. But it is a blank page; the story is still to be written. Yes, significant revenues are up for grabs, but there is lots of hard work to do and a lengthy timeline before it all kicks in.”
Tomasi went on: “This market was meant to go at light-speed… But there is a learning curve for enterprises, and a learning curve for everyone selling private network services. So the market is moving slower, from tests and proofs; it still needs time to validate the technology, the solution, and the business outcomes. And mobile operators, for example, have been slower than others to capture the market. They are still learning the trade.”
His appraisal echoed the sentiments of ABI Research earlier this month, that the window of opportunity for telcos to reinvent themselves with private 5G, as more than just dinosaur utility pipes, is closing, already. ABI reckons the carrier community has to pull-up its proverbials, quick-smart, or be caught at the start line, as the promise of industrial 5G struggles for life, enterprises grow impatient, and system integrators overhaul them with all manner of other connectivity tech.
“5G is not a special flower,” said Dean Bubley at Disruptive Analysis, as part of a recent panel for a new Enterprise IoT Insights report on how operators will manage private 5G networks on behalf of enterprises. Tomasi was also on the session, along with Leo Gergs at ABI Research and others, and the mood was dark. “The skill of ‘being an operator’ just isn’t something enterprises see as valuable,” reflected Robert Curran at Appledore Research.
At 5G World in London, Tomasi said the manufacturing, transportation and logistics, and energy and mining sectors are leading the charge with private LTE and 5G. “Verticals where small margins make a difference,” he explained. “Which is where private networks make a difference.” But he warned the operator set, along with anyone else who will listen, that enterprises are not much interested in 5G; they want all the stuff that goes over the top.
Vendors of all stripes must seize the opportunity to cross-sell and up-sell, and make a fist of Industry 4.0 on a larger scale, he implied. “When we talk about private networks, we should keep in mind this is not an empty or isolated connectivity play. It has to be more. Enterprises want additional services and technologies, so private networks can be used to drive different solutions. Connectivity is the enabler for something else,” he said.
What else to write? Oh yeah; it is not even a 5G market, yet (of course). “The majority is on LTE, so at moment it is an LTE market, and LTE is currently delivering what most use cases want.” As an editorial aside; Tomasi is right, of course, about everything: it is a wide open and highly fragmented market, especially when it is regarded in the round. It looks clearer through the lens of each player in the market, only because their views of it are all different, and all of them are feasible on their own terms.
Tomasi’s advice to the budding private 5G fraternity, to both the agitators and hangers-on, makes sense also in this context. “It is a huge and fragmented market, between regions and spectrum, and you cannot get everything at once. You have to be very focused on being a champion of a vertical or a region or an application,” he said. Burrow down, get dirty, stay focused, stay open — because the view from up-top, across the whole sector, will drive you to distraction. Or something like that.