Skip to main content

Why Industrial Markets Lead 5G Private Network Growth

Commercial wireless communications have evolved rapidly over the last decade. Also, private cellular connectivity differs between enterprise verticals. Exploring the various applications and industry use cases provides an important indication of where infrastructure deployment will occur next.

With fifth-generation (5G) wireless technology maturing, the importance of private networking solutions for the enterprise domain will continue to grow. Looking ahead, the growing demand for private network deployments will be driven primarily by heavy industry verticals.

Industrial manufacturing, energy production (including mining, oil and gas, and logistics) alone will generate private network revenues of $32.38 billion by 2030, representing half of the $64 Billion overall private network revenues, according to the latest worldwide market study by ABI Research.

Private 5G Network Market Development

"These findings show the importance of private networks, particularly for automating mission- or even life-critical use cases, that require the highest possible network reliability and availability and are characterized by a high degree of network integrity to prevent data from leaving the enterprise premises," said Leo Gergs, research analyst at ABI Research.

According to the ABI assessment, enterprises that require network slicing capabilities to separate mission-critical from non-mission-critical use cases within the same physical network will turn to private networks.

Two main factors are causing a surge in private network infrastructure growth. First, there is a huge rise in demand for automation and enterprise digitization. What has started with Industry 4.0 is now exacerbated by the aftermath of the global COVID-19 outbreak.

Enterprises in industrial manufacturing, logistics, and oil and gas are now accelerating their digitization plans to reduce their dependency on manual labor availability and increase the resilience of their business operations against sudden disruptions to supply chains.

The second factor is the addition to the demand-side effect. The market for private network deployments will also benefit from a supply-side effect. The freeze of Release 16 gives enterprises the much-needed reassurance of 5G capabilities for enterprise-grade connectivity, which allows chipset and module manufacturers to grow the device ecosystem for compatible hardware.

The maturing device ecosystem, in turn, drives down prices per module and therefore makes the deployment of a private 5G network more cost-efficient, which will spur additional interest from enterprises.

While private network operators such as Ambra, Citymesh, or Edzcom are threatening traditional mobile service provider market share by monetizing managed services other than connectivity, cloud computing hyperscalers are launching their private network offerings in co-creation efforts with local incumbent telco players.

Outlook for Private 5G Network Applications Growth

In addition, software vendors such as Athonet, or Quortus benefit from emerging trends toward network virtualization, which allows them to offer a virtualized core network either through System Integrators or to enterprises directly.

"These breathtaking developments show the amazing pace at which this market is evolving. Against this backdrop, it is important that all players in the enterprise connectivity domain develop a durable business strategy to profit from this rising market," concludes Gergs.

I anticipate that we'll continue to see more edge computing service launches in the coming weeks and months, as enterprise CIOs and CTOs build a business case for new network infrastructure investments -- including on-premises solutions that integrate with public cloud service components.

Popular posts from this blog

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -

Rise of AI-Enabled Smart Traffic Management

The demand for smart traffic management systems has grown due to rising urban populations and increasing vehicle ownership. With more people and cars concentrated in cities, problems like traffic congestion, air pollution, and greenhouse gas emissions are pressing issues. Since the early 2000s, government leaders have been exploring ways to leverage advances in IoT connectivity, sensors, artificial intelligence (AI), and data analytics to address these transportation challenges. The concept of a Smart City emerged in the 2010s, with smart mobility and intelligent traffic management as key components.  Smart Traffic Management Market Development Concerns about continued climate change, as well as cost savings from improved traffic flow, have further motivated local government investment in these advanced systems. According to the latest worldwide market study by Juniper Research, they found that by 2028, smart traffic management investment will be up by 75 percent from a 2023 figure of

How Generative AI Will Reshape the Economy

The Global Networked Economy -- a term synonymous with the interconnectedness of businesses, individuals, and governments worldwide -- has undergone a remarkable transformation in 2023. Fueled by the rapid growth of digital technologies and the global internet, this phenomenon has given rise to a worldwide marketplace that has already revolutionized the way we live, work, and play. The impact of Generative Artificial Intelligence (GenAI) in 2024 will be equally disruptive to many traditional business leaders. GenAI will also create huge opportunities for the fearless pioneers. Global Networked Economy Market Development The Global Networked Economy's evolution traces back to the advent of the Public Internet. The introduction of eCommerce, social media, and cloud computing has been instrumental in reshaping how businesses operate and engage with their customers. This interconnected ecosystem empowers savvy leaders to access new markets, trim operational costs, enhance commercial e