The allocation of 5G spectrum licenses to mobile network operators (MNOs) is a complex and highly debated issue that varies from country to country. While some countries choose to assign 5G spectrum licenses to MNOs, others allocate them to enterprises or other entities. The choice of whether to allocate 5G spectrum licenses to MNOs or not has significant advantages and disadvantages. Allocating 5G spectrum in the mid-band and high-band ranges to enterprises instead of MNOs could potentially take away a sizable portion of the market from MNOs as it provides the opportunity for service integrators (SIs) to compete in this space.
How will the new paradigm play out and how will major stakeholders redefine themselves to take advantage of it?
The Emerging Private 5G Ecosystem
As industries embrace the transformative potential of 5G and other innovative networking technologies, it becomes crucial for manufacturing enterprises to navigate the complex landscape of network transformation. This includes understanding the technology and the solution provider landscape.
In the private 5G space – in terms of both services and technology – new players such as SIs, platform providers and software and hardware vendors are competing with traditional players such as MNOs. This creates some interesting dynamics and opportunities for SIs and MNOs.
The 5G Service Integrator Advantage
SIs have extensive experience and expertise building and managing complex technology systems. Compared to MNOs, service integrators are more flexible and can customize solutions to meet the specific needs of their clients. If 5G spectrum in the mid-band and millimeter-wave band ranges are given to enterprises instead of MNOs, SIs would be competitive for the following reasons:
- Expertise in network integration: SIs have extensive expertise in network integration, which is essential for building and managing private 5G networks for manufacturing industries. They can leverage their experience in integrating different technologies and systems to design and deploy customized solutions that meet the specific industry.
- End-to-end service: SIs can offer end-to-end services including design, implementation and maintenance of private 5G networks. This means that industries can rely on a single vendor for all their needs, rather than having to work with multiple vendors, which can be complex and time-consuming.
- Agility and innovation: SIs are often more agile and innovative than MNOs. They can leverage their experience in different industries and technologies to bring new ideas and solutions to the table. This can lead to faster innovation and deployment of new services and applications on private 5G networks.
- Lower cost: SIs may be able to offer private 5G network solutions at a lower cost than MNOs since they are more flexible and can customize solutions to meet the specific needs of their clients. They may be able to avoid unnecessary expenses and optimize the use of resources.
SIs can be competitive with MNOs if 5G spectrum in the mid-band and millimeter-wave band ranges are given to enterprises instead of MNOs. They can offer expertise in network integration, customization and flexibility, end-to-end service, agility and innovation at extremely competitive prices. While this approach may seem tailored to take away much-needed business from MNOs, MNOs can remain competitive by redefining themselves and leveraging their strengths to meet the changing needs of the market.
Recommendations for MNOs in the Private 5G Marketplace
One way to redefine themselves and remain competitive in the private 5G market would be for MNOs to create an entire department that operates as an SI. By creating such a department, MNOs can offer a broader range of services to their clients, including network integration, customization, and innovation, which are typically associated with SIs. This approach would enable MNOs to leverage their existing technical expertise and infrastructure while also expanding their service offerings to meet the evolving needs of the market.
By doing so, MNOs can differentiate themselves from other competitors in the market and potentially capture a larger share of the private 5G market. However, it is important to note that creating an SI department requires significant investment in terms of time, resources, and talent. MNOs would need to attract and retain skilled professionals with expertise in service integration, project management and customer engagement to build and operate effectively. This is something some MNOs have already caught on to and those who haven’t need to examine it carefully, least they get left behind.
Another cost-efficient way for MNOs to redefine themselves would be to establish strong partnership ecosystems with other players in the private 5G market to offer end-to-end solutions that meet the diverse needs of their clients. This would require collaboration with hardware and software vendors, cloud service providers and enterprises. They can leverage their long history of building and managing large-scale wireless networks, experience and reputation to build customized private 5G networks for enterprises that offer high performance, reliability and security.
Moreover, MNOs can collaborate with SIs to provide end-to-end solutions for manufacturing industries by partnering with them to offer a wider range of services, such as network integration, customization and innovation, which can help differentiate them from other competitors in the market by working in tandem with SIs to reduce downtime, enhance performance and improve overall network efficiency.
Although most of these traits are not exclusive to SIs or MNOs, we expect companies that are considering a private 5G network to evaluate both MNOs and SIs to determine the best fit for their needs.
Recommendations for Private 5G Network Platform and Equipment Providers
The private 5G ecosystem has also opened the way for platform providers to offer numerous services and solutions to support private 5G deployments and unlock the full potential of this technology. Some opportunities for platform providers in the private 5G ecosystem include offering infrastructure, virtualization, edge computing, IoT and data analytics, managed services and consulting, and easy integration with public services.
Within this ecosystem, equipment vendors also can diversify their customer base beyond MNOs and tap into new revenue streams. To approach this market, 5G equipment vendors can work closely with SIs, MNOs, hyperscalers and enterprises to understand their specific requirements and develop solutions tailored to their business objectives. This collaboration can help address the challenges of deploying and managing private 5G networks, which require expertise in multiple areas such as network integration, security and analytics.
Furthermore, equipment vendors can leverage platform providers to offer device management platforms and services that allow 5G device vendors to remotely monitor, configure and manage their devices deployed in the field. Through cloud-based device management, vendors can streamline operations, update device firmware, troubleshoot issues and gather valuable device performance data for analysis and improvement.
Given the significant capital expenditure required to deploy private 5G networks, equipment vendors can provide financing and leasing options to enterprises to make the deployment more feasible and accessible. As the private 5G market evolves, this would also help them build brand awareness and educate potential customers on the benefits and capabilities of private 5G networks. It will also help them with targeted marketing campaigns, thought leadership content and participation in industry events.
Opportunities for 5G Market Participants
The chart below illustrates the share of private 5G opportunities for ecosystem players as the market continues to evolve. Considering the main components of private 5G delivery such as connectivity, platform, application and service management, these players can leverage their strengths and improve on their weaknesses to capture a significant piece of this emerging market.
Figure 1: The Share of Private 5G Opportunities for Ecosystem Players
In conclusion, the 5G market ecosystem is evolving, creating new opportunities and revenue streams for new players and incumbents alike. Some players will have to redefine themselves and build partnerships to harness these opportunities. While MNOs can create service integration departments in their organizations to assist in redefining themselves and remaining competitive in the private 5G market, it will require significant investment in terms of resources, talent, and partnerships. If done correctly, this can help MNOs capture a larger share of the private 5G market and create new business opportunities in the evolving private 5G ecosystem.
MNOs can remain competitive in the private 5G market by leveraging their strengths in network infrastructure, collaborating with service integrators, offering comprehensive network management services, and building partnerships in the ecosystems with other players in the market. Equipment vendors can approach the evolving private 5G market ecosystem by developing customized solutions, establishing partnerships, offering financing, and leasing options, leveraging existing relationships and building brand awareness. By doing so, they can tap into new revenue streams and expand their customer base beyond MNOs. Platform providers can partner with SIs and equipment vendors to provide 5G services directly to enterprises. By adopting these strategies, all players can redefine themselves and create new business opportunities in an evolving private 5G ecosystem where everyone is a winner.
Finding Partners for Network Transformation
Manufacturing companies are increasingly relying on robust network solutions to drive efficiency, productivity, and innovation – and are finding that navigating the array of network solution providers can be a daunting task. ISG Network Advisory can alleviate this challenge by providing in-depth insights into the vast array of network service providers, technology vendors and system integrators. Our expertise helps enterprises identify and evaluate potential partners that align with their specific needs and objectives.
We help manufacturing companies make informed decisions while selecting partners for sourcing 5G and other network solutions. While enterprises may possess internal resources and expertise, an independent and unbiased viewpoint can be invaluable during the network transformation process. ISG is a trusted advisor providing objective assessments, recommendations and guidance throughout the sourcing and deployment journey. Our experienced consultants help manufacturing enterprises avoid pitfalls, optimize costs and ensure network solutions align with their strategic objectives.