Verizon gets big Industry 4.0 win

Verizon Business scored a powerful deal to provide its newly launched Neutral Host Network platform to a Cummins engine plant in Lakewood, New York, extending the carrier’s ongoing push into the rapidly evolving private 5G and private network space.

The network platform is being deployed at the Cummins Jamestown Engine Plant (JEP). It will include the first implementation of Verizon Business’ Neutral Host Network platform.

That platform will act as an on-premises centralized host supporting cellular connections for Verizon and other cellular operators, and a Verizon Private 5G Network that will use Verizon’s licensed spectrum to support business-critical applications like autonomous mobile robots; augmented reality (AR) and virtual reality (VR) (AR/VR) training and troubleshooting; sensor monitoring; and onsite proprietary applications.

Verizon is acting as an “anchor tenant” for the carrier-agnostic neutral host network as well as technical lead for network deployment. Ericsson is providing the combined network platform that will cover the site’s 1 million square feet of industrial space and 1 million square feet of outdoor space that support 1,500 onsite employees that produce approximately 500 heavy-duty truck engines per day.

Shawn Hricko, plant manager at the Cummins facility, noted in a statement that the neutral host and private 5G platform “will allow us to implement Industry 4.0 strategies more quickly and more reliably.”

“The improved functionality will enable team members to communicate with one another more effectively, allow us to share more data across equipment and enable our ability to implement mobile Industrial robots (MIRs),” Hricko added. “Collectively, these improvements will enable us to produce our engines more safely, more efficiently and with improved quality, which is a win for Cummins and our customers who rely on our products on a daily basis.”

Verizon’s Neutral Host Network is similar to ones launched by other operators like Cox Communications working with InfiniG and Federated Wireless working with T-Mobile US.

Verizon’s Private 5G Network platform taps into the carrier’s extensive licensed cellular spectrum. It does not connect to its public network and thus can provide increased network security by keeping all data onsite.

“By offering neutral host and private 5G network capabilities together, Verizon can deliver a solution that supports both multicarrier public connectivity and specialized private network use cases on a customer’s campus or worksite,” Brian Partridge, head of research at 451 Research, explained in a statement. “The network types share common elements, so implementation is streamlined and both public and private uses are covered.”

Verizon Business sees private 5G path
The deal is significant for Verizon Business, which has been under increased focus following a roller-coaster start to the year.

Scott Lawrence, SVP for global solutions at Verizon Business, told SDxCentral earlier this year that private 5G remains a “tool in the toolbox” for the business unit as it looks to help enterprise and government customers flesh out their digital transformation goals. This includes an increased focus on the importance of a more robust networking structure to support IT, OT and cybersecurity goals.
Lawrence added that platform providers also need to better understand the true needs of enterprises and their over-taxed IT teams.

“I think the real key is not necessarily private 5G itself,” Lawrence said, adding, “but when you take a step back, what customers are really interested in is how does it all work together. How does my in-building network work with private 5G, or with the investment I made in Wi-Fi? How does that connect into my wide-area network and in my multicloud environment? And where do I get the business benefits? And how does it start to address some of those issues of convergence like OT and IoT?”

This also includes having flexible deployment models. Lawrence said Verizon Business is primarily focused on fully managed private 5G deployments, but also looking to add some co-managed options for enterprises that want some level of control. There is also the need to work through expense models.

“The other piece that we’re also looking at is to create flexibility and a commercial model for our clients moving more to an opex model for private 5G that can build off of our network-as-a-service offering that we have,” Lawrence said. “It goes back to that whole concept of convergence and the use-what-you-consume models that customers can quickly deploy in an environment and spin up or expand as they need and contract as they need.”

Lawrence said those questions will find more suitable answers this year. “I believe we are well on our way of this journey of much broader adoption of private 5G across a whole different landscape of verticals for our customers,” he added.

Verizon has been aggressively expanding its private network reach with sport leagues, including the recent deals with the NFL and NHL. Verizon CEO Hans Vestberg during the carrier’s most recent earnings call also linked the carrier’s private network expansion to future support for the still nascent multi-access edge computing (MEC) space.

Ericsson and market opportunities
The deal is also a coup for Ericsson, which has been operating in the shadow of rivals Nokia and Huawei in the private radio access network (RAN) arena. Dell’Oro Group recently ranked Ericsson as the world’s No. 3 private RAN vendor based on revenues behind those rivals, and a solid No. 2 when taking out Huawei’s dominance in the China market.

That report also noted the private RAN space surged 40% last year, which garnered it a 2% share of the overall RAN market. And it’s expected to grow at a 21% compound annual growth rate over the next five years to as much as $2 billion in total sales by 2028, compared to an expected 2% CAGR drop over the next five years for the public RAN market.

“Although public RAN is still fueling the lion’s share of the overall RAN capex and the overall investment levels are tracking below some of the initial projections provided by the vendors in the early part of the 5G enterprise hype cycle, the fact of the matter is that private wireless is now growing at a formidable pace,” Dell’Oro Group VP Stefan Pongratz wrote. “This stands in contrast to public RAN and enterprise WLAN – both segments are projected to contract in 2024.”

SNS Telecom & IT recently forecast that spending on private 5G networks will grow at a 42% CAGR over the next several years, generating $3.5 billion in annual spending by 2027. It expects “much of this growth will be driven by highly localized 5G networks covering geographically limited areas for high-throughput and low-latency Industry 4.0 applications in manufacturing and process industries.”

“Despite prolonged teething problems in the form of a lack of variety of non-smartphone devices, high 5G IoT module costs due to low shipment volumes, limited competence of end user organizations in cellular wireless systems and conservatism with regards to new technology, early adopters are affirming their faith in the long-term potential of private 5G by investing in networks built independently using new shared and local area licensed spectrum options, in collaboration with private network specialists or via traditional mobile operators,” the firm noted. “Some private 5G installations have progressed to a stage where practical and tangible benefits – particularly efficiency gains, cost savings and worker safety – are becoming increasingly evident.” SDX Central