Private 5G – the next wave in Indian telecommunication space

A private network is dedicated for private use by an organization where access is restricted to authorized devices and users. It is a limited-coverage network with a spectrum requirement of 50-100 MHz. Private networks have no connection with external public networks and commercial communication services outside the network.

As we move toward an era of internet-enabled machines and seamless connectivity, the Industry 4.0 revolution and technological advancements, such as IoT, automation, and robotics have led to an upsurge in the adoption of private networks. The increasing demand for bandwidth, ultra-low latency, heightened security, and the need to support thousands of devices have pushed corporates to opt for private 5G networks.

In India, several industry verticals, focusing on process automation and demanding real-time connectivity, will be looking to take advantage of the private network’s potential. Many companies in sectors, such as retail, healthcare, education, utilities, manufacturing, and transportation are expected to deploy private 5G networks over the next 10 years. Following are some of the use-cases of private networks:

Manufacturing. By optimizing data connection across multiple linked equipment, it will enable firms track assembly-line goods in real time. It will also improve production agility, reduce manufacturing response time, and protect price-sensitive data, thereby helping the companies to advance the notion of Industry 4.0.

Smart facilities. Private 5G networks can significantly increase network connectivity, enabling digital transformation. Smart facilities will enable the deployment of a new suite of modern IT systems in a faster and secure manner.

Logistics. Warehouses, distribution centers, and ports have a continual inflow and outflow of products that must be tracked. Private 5G networks can help logistics facilities expedite their digital transformation goals.

Private networks bring faster and safer operations, new capabilities, and efficiency in industrial processes in addition to seamless connectivity. Use of private network shall fulfil mission-critical applications’ coverage, performance, and security requirements and will be a key to harness the potential of 5G in India.

The market value of private 5G networks globally is expected to increase from USD 1.3 billion in 2021 to USD 15 billion in 2028, growing at a CAGR of 39.7 percent. In several European countries, including Germany and France, regulators have started offering direct spectrum to enterprises, which enables them to establish their private networks. In addition to deployment of private 5G networks in large manufacturing facilities of conglomerates, a substantial number of the licenses have been issued to universities, research organizations, airports, and exhibition centers. This is perhaps the most decisive regulatory shift for the telecoms industry for quite a while allowing enterprises to bypass mobile operators.

Network slicing over a public network is another source of revenue for TSPs, where enterprises can enjoy the advantages of a private network without the upfront cost and complexity involved in installing and operating an on-site wireless infrastructure.

It remains to be seen whether India will administratively allocate spectrum to enterprises for establishing private 5G networks (direct responsibility of spectrum access and usage) or opt to auction the spectrum as it does for telecommunication operators. In the likely Indian scenario of telecom service providers (TSPs) providing private 5G networks to enterprises, the TSPs can boost their enterprise revenue to more than 40 percent from the current 10 percent.

Indian executives expect to leverage telco-enabled 5G slices as they believe utilizing services through a wireless provider is preferable to acquiring spectrum directly through the government/regulatory body or holding exclusive rights on a dedicated or shared spectrum.

“Requirement of a comprehensive policy on partnership between TSPs and private network infrastructure companies, including spectrum distribution, is a necessity before the auctions in 2022.”