Less surprisingly, Huawei, Nokia, and Ericsson are the top private RAN suppliers
Analysts Dell’Oro suggest the small but perfectly formed private wireless market segment saw a big uptick in year-on-year revenue growth in the second quarter. Total private wireless RAN revenues, including traditional private wide-area macro and small cells, increased by around 60% YoY.
Interestingly, the trend was positive for both established and smaller RAN suppliers. The top three private wireless RAN suppliers for the 3Q 2022 to 2Q 2023 period included Huawei, Nokia, and Ericsson. If China’s market is excluded, Samsung joins the top 3.
“As is the case with most new shiny objects, there is an initial period of excessive hype and anticipation that results in a mismatch between expectations and reality,” said Dell’Oro Group VP Stefan Pongratz. “After multiple adjustments, the industry is now coming to terms with the fact that private wireless is a marathon, not a sprint. With both the suppliers and the operators adjusting their near-term expectations, the industry is now more aligned and in a better position to meet these revised growth objectives.”
Following multiple downward forecast revisions over the past year, Dell’Oro did not make any material changes this time around to the forecast or the mix between public and private RAN investments.
Total private wireless RAN revenues are projected to grow at a 24% CAGR between 2022 and 2027, while public RAN revenues are set to decline at 2% CAGR over the same period.
The underlying technology mix has also not changed. 5G is dominating in China, while LTE is currently dominating outside of China. Private 5G RAN revenues are projected to exceed $1 billion by 2027.
Caveat emptor for private RAN
Test and measurement company Spirent warns that while service providers will expect enterprises will pay more for private RAN networks, service level management will be harder to guarantee.
Analysys Mason’s Private LTE/5G networks: worldwide trends and forecasts 2022-2027 report concludes that by 2027, the three leading verticals – manufacturing; mining, oil and gas; and transport and logistics – will constitute 80% of the private networking market.
The firm projects private LTE/5G network spend will reach $7.7bn by 2027, with 35% comprising the manufacturing sector and 32% mining, oil and gas.
Spirent commissioned STL partners to survey 200 enterprises and the results demonstrated that security and reliability were top of mind. So much so that companies suggested they would pay a premium for more stringent SLAs.
While enterprises try to shift from capex to opex models, they are choosing cloud service providers to partner on private mobile networks and that presents telcos with a dilemma around how much mindshare they apply to this with hyperscaler partners.
“Private networks are emerging as a viable alternative to traditional enterprise networks, offering a wide range of benefits,” said Spirent principal strategist for private networks Marc Cohn. “But the disaggregated private networking ecosystem, wide range of domains, technologies and diversity of user cases result in much greater complexity than the traditional wide area networks enterprises have previously relied on.”
“Comprehensive and robust private network service level management is an essential tool to ensure business outcomes as planned,” he added. “With this in place, a significant opportunity exists for MNOs and CSPs to monetise their investments in 5G.”