Is this a review of 2023, or a forecast for 2024? It could be either, on the grounds it looks backwards to look forwards, taking its cues from the past 12 months in private cellular – when the market showed decent growth, but was still underwhelming (and somehow under-confident) in the context of its big talk and identity crisis. Anyway, the message from RCR Wireless, sitting on the fence, is that private 5G in 2024 will look much like private 5G in 2023 insofar as it will matter to enterprises greatly and increasingly – but not as much or as quickly as the telecoms sector wants it to.
1 | Half a dozen dynamite industrial deployments – and no more
Over the next 12 months, there will be six or eight major multi-site and multi-market private LTE/5G installations that will be justifiably held up at the end of the period as examples of a market that is starting to mature – or to signpost maturity, anyway. That will be it; no more – in the public domain, at least. Indeed, public references will continue to be difficult to come by, on the grounds that enterprises are intensely paranoid and highly competitive by their nature.
But these half-dozen large deployments – with probably about half ‘primed’ by big global SIs, a quarter by mobile operators, and another quarter by industrial specialists and others; in partnership often with Nokia, likely, leading from Ericsson in terms of RAN share, leading from the likes of Airspan and Cisco; in tandem with a hodge-podge of core network providers – will show how industrial cellular can be scaled by large enterprises across hundreds of sites.
Much like Dow Chemical, Airbus, and Schneider Electric, plus a very few others, showed in 2023; just on a marginally easier trajectory, where the investment is better understood, the technology is more familiar, and precedents already exist in most vertical sectors. For the big beasts of business, in certain industrial disciplines, the point will come in 2024 where inertia costs them – as rivals start to tear-away with new digital-change infrastructure.
But by the end of the year, we will still only really be able to look back at six or eight dynamite new private 5G projects in the Industry 4.0 game. Which will be enough, all the same, to show the market is working.
2 | A handful of new use cases – for (slightly) easier business cases
Alongside the new growth in private LTE/5G deployment numbers – which, let’s say, will double to 6,000 by the end of the year, based on one analyst-house calculation of 2,900 (to date) at the end of 2023, and a wild journalistic wager that the market is spiralling kinda-upwards – the whole ecosystem will bounce in 2024 because the number of applications to go on these networks will expand; again, not massively, but enough to move the needle.
Where private cellular networks in 2023 – like in 2022 and 2021, when LTE was already sufficient to stand-up most services – tended to be bankrolled by fairly simplistic connectivity use cases, like on-site team comms and intra-site remote comms, plus a smattering of autonomous vehicles and robots (AGVs and AMRs), their business case will be strengthened in industrial venues in 2024 with the introduction of (a few) new Industry 4.0 applications.
Most significantly, perhaps, industrial drones appear set for a big year – as remotely-operated flying inspection robots that can get to the parts of construction sites, chemical plants, utility grids, and other difficult environments that field engineers just can’t. Besides this, new 5G-type Industry 4.0 applications will be harder to discern through 2024 – because they will tend to hinge on the long generational upgrade cycles of industrial equipment.
But machine makers are starting to synchronise their portfolios with Release 17 of the 5G standard, and long-standing industrial IoT applications for predictive analytics and maintenance, for example, are starting to be patched over onto private cellular systems from other private enterprise networks; so there will be a steadily increasing workload, and justification, for private LTE and 5G networks in 2024.
3 | A market that splits two ways – both going away from Industry 4.0 Inc
All of this growth – unspectacular, perhaps, but assured, and in line with the pace of enterprise transformation – will be most evident, arguably, as private 5G migrates down and across the food chain – going across-ways from manufacturing, always the pin-up for industrial 5G, into new vertical markets, and down-ways from multinationals with deep pockets to mid-sized corporations with less showy intent, straddling all of these parallel economic disciplines.
Which, of course, is where real scale and maturity comes. An interesting aspect of this is how the ‘private’ 5G proposition changes as the customer market expands and mutates, and also how its supply shifts to other system vendors. Increasing numbers of enterprises will look to adopt hybrid systems, which link with compute engines in a centralised cloud, and sometimes even a public cloud, to run applications, and often core network intelligence, too.
To an extent, they will forsake the kind of localised edge-governed network latency and security that has marked early on-premise 5G deployments in more-sensitive, and typically wealthier, industrial-grade disciplines. As well, 2023’s talk about public/private network roaming will turn to action, as enterprises in the hotly-tipped logistics sector, for example, seek to bring control over end-to-end tracking and monitoring solutions.
This is also where AWS and Microsoft will set up camp – in non-critical and ‘carpeted’ verticals bustling with smaller enterprises, such as in white-collar business parks, open-necked urban districts, and much of the services-based economy that runs between. The mobile operators – including tier-two players which have stayed out of the Industry 4.0 fray – will also pitch-up with private 5G retail offers. The likes of Siemens will try to hoover-up blue-collar SMEs.
4 | A growth market with growth pains – and the saddest thing for telcos
But none of this – the expansion and influence of cellular in the enterprise space – will stop the angst among legacy telcos, which birthed the technology in the first place. Even with their successes in 2024, they will be seen to have failed – and they will have done. Because they dreamed-up the market based on a raft of wrong assumptions: most criminally, that 5G, as advertised, is a finished technology, but also that it is all-conquering, and theirs to command.
They also assumed, incorrectly, that enterprises would rush to buy networks almost-instantly in order to connect enterprise devices in the way everyday punters upgrade mobile phones. None of which has come to pass, of course – but all of which remains like a long shadow across their work in the enterprise space. And so, they will face the same jeopardy in 2024, contending with fierce supplier rivals, cautious enterprise customers, and a technology that doesn’t quite do what it is supposed to (even if it does other stuff very well).
The saddest thing for telcos, which should be rendered in terrible relief in 2024, is what a missed opportunity private 5G is for them. Not because it was mis-sold, actually; but because mobile operators have failed, over and again, to understand the rules of modern digital engagement. And they have failed, as well, to comprehend the invidious position they have occupied in the supply of broader digital services. And so their failures will be magnified in 2024.
Because enterprises don’t want a hard-sell; they want a slow-sell, with consultancy and flexibility, which solves their problems, and is stackable enough to build progressive value. New digital-change systems exist as an idealistic combination of cloud and IoT economics: designed to be open, constructed mob-handed, built to be modular, and sold as-a-service on a zero-fat subscription that scales both ways. It is a speculative pursuit, especially at first.
This is the environment in which private 5G exists, and on which it depends. But connectivity is different because it is a commodity with a clear value and a clear price. The telecoms market hates the idea, but 5G is correctly perceived by enterprises as a utility service – as fundamental to the economy as electricity and water. It might not be of potentially transformative value like software or arguably differentiated value like hardware, but it is absolute.
And it is a foot in the door, and a line on an invoice – which mobile operators should have made more of already, as a platform to discuss the mixed value of new IT/OT data acquisition, processing, and analytics systems. But the market is still young, and it is not too late, even if it is busier than ever.
