Report Background

35G Private Networks

The Telecoms Supply Chain Review (2019) identified a strong risk of national dependence for 5G provisioning of radio access network equipment, a lack of openness within the market due to incumbent advantages and very high barriers to entry13.

Because private networks are smaller, heterogeneous and specifically applicable to enterprise operations, there’s an opportunity to build specialisms in certain sectors and design innovative components for network architecture. This new market within telecoms could be a catalyst for positive disruption where the barriers to entry are significantly lower.

However, as this market is still immature there’s a small window of opportunity to forge a more diverse industry before large firms with significant market power and strong balance sheets can take up hegemonic positions.

Supporting the maturation of this market by accelerating the commercialisation of 5G private networks that are designed through open principles will encourage diversification

“Is 5G around the corner?”

“Not quite. The problem with 5G? No one’s quite sure what it is yet.”

This CNN headline dates back to 2014 but the sentiment is still current. Eight years on, 5G has not yet had the sweeping, transformative effects predicted. The latest evolution of mobile connectivity has under-delivered and has been over-hyped.

5G is the latest generation in the continuum of mobile connectivity. This latest evolution will bring transformational changes in its characteristics, network architecture, as well as being accompanied by the opening of radio spectrum.

These three changes open up opportunities for new participants in the mobile connectivity market, which could provide positive disruption. This could enable a more diverse and innovative industry.

1.1 NEW STANDARDS, NEW FEATURES

5G is based on the latest set of standards and performance targets developed by the 3rd Generation Partnership Project (3GPP), the organisation responsible for driving international technological advancement of mobile networks.

5G standards are aimed at bringing about improvements in ultra-Reliable Low-latency Communications (uRLLC), high-speed data transfer through Enhanced Mobile Broadband (eMBB) and enabling Massive Machine-Type Communication (mMTC).

For industry and society, these capabilities on a wide-area wireless network are transformational. They provide the basis for innovative use casesin industry, services, transport and smart cities. Figure 1 below shows the premise of each mobile evolution and the key capabilities targeted by 5G.

As well as pushing forward mobile network performance characteristics, the 5G specifications include enablement of 5G private networks. This represents a paradigm shift in the architecture of mobile networks to align with cloud-native, virtualisation and open interface principles. represents a paradigm shift in the architecture of mobile networks to align with cloud-native, virtualisation and open interface principles.

1.2 AN EVOLUTION IN NETWORK ARCHITECTURE

5G standardisation has driven efforts to reduce the cost of network equipment through virtualisation and adoption of cloud-native principles (Figure 2). This makes 5G architecture different from previous connectivity generations.

This 5G system architecture evolution towards the cloud is seen as another enabler for new equipment providers to enter the market, lowering the barrier for suppliers as many of the network components have been specified to run on generic compute and cloud infrastructure.

FIGURE 1: EVOLUTION FROM 1G TO 5G, AND 5G’S MAIN CHARACTERISTICS

EVOLUTION FROM 1G TO 5G

Source: Deloitte Insights (2020)2

FIGURE 2: 5G PRIVATE NETWORK ARCHITECTURE

 

5G PRIVATE NETWORK ARCHITECTURE

Source: Deloitte and Plexal (2021)

1.3 OPENING UP OF PRIVATE NETWORK SPECTRUM

As with previous mobile network standards, the availability of spectrum for 5G needs to be carefully considered. Private networks can use unlicensed and licensed spectrum, depending on spectrum assignment policy.

5G can be provided through a number of different frequency bands on the electromagnetic spectrum but the frequency that’s used will be driven by the use case that it’s underpinning, as well as the availability of the spectrum3.

Different frequency bands on the radio spectrum will offer different characteristics. For example, allocations on the low-band (<2GHz) offer the widest coverage but lowest bandwidth, so is better suited to outdoor settings. Frequencies on the high-band (>6GHz) offers the highest capacity but provides the lowest area coverage, so would be more applicable to indoor environments. Table 1 shows the guidance Ofcom has provided around the frequency bands available in the UK.

1.4 PRIVATE NETWORKS: DRIVING INNOVATION THROUGH CONNECTIVITY

The support for private networks in the standards, the evolution of architecture and the possible sublicensing of spectrum provide strong opportunities for enterprises to develop their own private network and access the benefits brought by 5G of a high speed, low-latency, high-capacity reliable wireless network – without relying on the public network operators.

This brings four main types of benefits to the enterprise (Figure 3).

5G is not a product itself that brings value but an enabler of technology, devices and applications. Most research into the use cases that 5G enables has been built on private networks. The 5GTT programme supported by DCMS features examples of tested use cases in real-life settings (Figure 4)7, 8.

TABLE 1: POTENTIAL USE CASES FOR THE FOUR SHARED ACCESS BANDS IN THE UK

 

USES1800 MHz SHARED SPECTRUM2300 MHz SHARED SPECTRUM3.8-4.2 GHzLOWER 26 GHz BAND
PRIVATE NETWORKticked
(narrow band)
tickedtickedticked
(indoor)
MOBILE COVERAGE (rural)tickedcertain locations
MOBILE COVERAGE (indoor)tickedtickedticked
FIXED WIRELESS ACCESS
tickedticked

Source: Ofcom5

FIGURE 3: PRIVATE NETWORKS OPEN SIGNIFICANT CONNECTIVITY OPPORTUNITIES

PRIVATE NETWORKS OPEN SIGNIFICANT CONNECTIVITY OPPORTUNITIES

Source: Deloitte and Plexal (2021)6

FIGURE 4: 5G PRIVATE NETWORKS USE CASES

 

5G PRIVATE NETWORKS USE CASES

Source: Deloitte and Plexal 3, 9, 10, 11, 12, 13