According to a recent report, the private 4G LTE and 5G network sectors demonstrate significant growth potential. However, ongoing economic and industry challenges are impeding the realization of this opportunity.
The research is that the market will experience a surge in revenues, increasing from $1.9 billion in the previous year to $5.2 billion by the end of 2027. This represents a robust compound annual growth rate (CAGR) of 21% during that period. However, this projected figure falls short of IDC’s previous prediction of generating $8.3 billion in global revenues from private LTE/5G wireless infrastructure by 2026.
The research for IoT and telecom network infrastructure at IDC, acknowledged that the market for private cellular networks continues to hold promise, with both LTE and 5G being deployed to address enterprise and industrial challenges.
Perspectives from Industry Observers
The latest figures diverge from other predictions in the industry.
According to analysts, the private 5G market is expected to grow at a compound annual growth rate (CAGR) of 65% between 2021 and 2027, reaching 39,000 deployments by the end of that period. The firm also projects investments to increase from $1.5 billion in 2022 to $7.7 billion by 2027.
Despite IDC’s more reserved outlook, operators remain optimistic about the opportunities in private networks.
Dish Network Chairman, confidently stated that the private network business could be valued anywhere from $30 billion to $100 billion, emphasizing the limited number of companies with access to licensed spectrum that can participate significantly in this sector.
Verizon’s EVP and Leaders of the consumer group, expressed satisfaction with the carrier’s private networks, highlighting the rapid growth from a single installation in mid-2022 to multiple new installations every quarter.
ABI Research reported that over 1,000 private networks have been deployed globally, and while the number of announced networks has slowed, it is viewed as a positive sign for the private networks market. According to a senior analyst at ABI Research, enterprises see private cellular connectivity as a competitive advantage, leading them to be more discreet about their deployments as the market transitions from experimentation to commercialization.
Also stressed the importance of the telecommunications industry delivering on its promises to the enterprise community, cautioning that failing to do so may tarnish the reputation of enterprise 5G as a technology that overpromises and underdelivers.
Increasing Adoption of Industrial Private 5G Networks
IDC emphasized that 4G LTE continues to play a significant role in providing mobile coverage for utilities and mining sectors, while 5G is gaining traction in manufacturing, warehousing, and logistics, where substantial growth is expected.
Similar sentiments have been expressed by industry experts. Betacom, mentioned that although they offer a 5G-based private wireless product, most deployments currently rely on 4G LTE radios. Betacom predicted that 5G will gain traction in the second half of this year and become the dominant private network transmission technology by 2030.
Ericsson’s Cradlepoint, highlighted the use-case dependence of 5G connectivity. While recognizing the opportunities it presents, it emphasized that not all use cases require 5G, with a mix of interest in both 4G LTE and 5G based on specific requirements.
Migration to 5G is crucial for enterprises to leverage the technology’s advantages, including network slicing capabilities and precise control over network and equipment resources. This allows for powerful customization at device and functional component levels. Betacom, for example, has a live 5G-based private network in collaboration with the digital manufacturing and cybersecurity institute MxD in Chicago.