Private 5G: a COVID-19 deep dive update

In Deloitte’s 2020 Tech, Media and Telecom Predictions, we were predicting that 100 5G private networks trials would take place this year.

However, it now seems clear that interest in private 5G is higher than expected.

Omdia’s Private Mobile Networks Market Tracker said there have been 104 private mobile network projects so far in 2020 (as of 1 May) and 141 projects in Q4 2019. There have only been 465 projects since 2016, which means that 53% of all private mobile projects in the last four years have occurred in the last seven months.

We’ve been able to find announcements¹ on 36 of the 104 private mobile network projects so far this year, and 30 of them have occurred since 1 February. Although COVID-19 was not declared an official pandemic until 11 March, we consider everything in February, March, April and the first half of May to have been influenced to some extent by awareness of the coronavirus. Thirty projects may not be statistically compelling, however some useful data points are emerging.

Just over a third (11) of the projects are 4G, either LTE or 4.9G, which may mean LTE-A Pro or 5G-ready, although the definition of that is not always clear. A further four projects are described as 5G-ready. Finally, a full 15 projects, or exactly half of our admittedly small sample, are proper 5G.

According to ABI Research, there were initiatives for private cellular networks in 15 countries as of 12 May, which agrees with our count in our sample. We tally five announcements in Asia Pacific, six in the Americas, and 19 in Europe - clearly, Europe is very much at the forefront. All of the Americas projects are 4G only: no 5G or even 5G-ready trials have been announced thus far.

Germany (at six out of fifteen) has a full 40% of all the private 5G projects announced since 1 February. On one hand, it seems clear that the Germany’s policy of setting aside the 3.7-3.8 GHz band for private 5G networks for companies and agriculture has helped it lead in private 5G. On the other hand, there have also been multiple private 5G trials in countries with no set-asides, so it seems likely that both approaches can work.

Of the 20 projects where the equipment manufacturer was disclosed, 13 were from European OEMs, a couple from Asia, and the balance were North American.

In terms of spectrum, the various German trials were all in the 3.7-3.8 GHz band. But many other bands are in use: some were at the 3.5 GHz CBRS band, a couple in the unlicensed 5 GHz wifi band, one at 2.6 GHz band, a couple of sub gigahertz projects at 900 MHz and 450 MHz, and only one at millimetre wave frequencies of 28-29 GHz.

Surprisingly, only a single medical project was launched: in the short term, perhaps hospitals are coping with more pressing issues, and over time we will see increased adoption in healthcare. We were expecting several private 5G trials for sports stadia, music festivals and other live events with tens of thousands of users. For obvious reasons, none of these have launched.

Otherwise, the use of private networks seems to be evenly distributed across different use cases, with more than one project for all of ports/airports, factories of various kinds, mining (if you want a cellular network underground, it’s always going to be a private network!), technology innovation hubs /demonstration labs, auto plants and electrical utilities. In fact, with four different projects, the electrical utility sector is in the lead.

Going forward, we expect a growth in adoption of private 5G in industries that may experience labour shortages or require increased automation levels. The need for greater distances between workers, more contactless manufacturing and production should further enhance the need for process reinvention.

We would expect the pace of private mobile network projects to accelerate further as countries come out of lockdown, with well over 100 per quarter likely in the balance of the year, with a majority being 5G or 5G-ready.

References:

[1] These are announcements in major media outlets or on vendors’ websites. They refer to projects, tests, pilots, trials, launches, initiatives and other terms, none of which are defined. We only include announcements where actual private gear has already been installed or is soon to be installed, and did not include partnerships and joint ventures without specific timelines for the project.