Annual spending on private 5G networks will grow at a compound rate (CAGR) of about 42 percent between 2024 and 2027, accounting for nearly $3.5 billion by the end of 2027, according to new research from SNS Telecom & IT, based out of Dubai. But forecasts are something and nothing, especially for a fiercely hyped technology like private 5G. More useful – especially for a market that is struggling to get out of second gear – is hard evidence that this technology makes a difference; and SNS Telecom & IT appears to have obliged.
The firm claims to have compiled a database of around 7,000 private cellular “engagements”, as of the second quarter of 2024, which includes more than 2,200 private 5G installations. Said database features details about a glut of deployments in China, which remains, as always, a tech market like no other – which is state directed and funded, and running at a much faster pace. It changed into fourth gear probably two years ago, while the rest of the world was still riding the clutch. Anyway, to memorialise, RCR Wireless has collected some of its findings below.
As context, SNS Telecom notes: “China is an outlier and the most mature national market thanks to state-funded directives aimed at accelerating the adoption of 5G connectivity in industrial settings such as factories, warehouses, mines, power plants, substations, oil and gas facilities and ports. To provide some context, the largest private 5G installations in China can comprise hundreds to even thousands of dedicated radio access network (RAN) nodes supported by on-premise or edge cloud-based core network functions depending on specific latency, reliability and security requirements.”
The point is, in almost every case, and unlike in most other geographies, the deployment is handled by a national operator – whether it uses a shared or dedicated local tranche of its national spectrum, or has some deal with the government to ride on other frequencies. Oh, and it mostly uses network gear from Huawei, possibly ZTE, and occasionally another Chinese vendor. Whatever the setup, the takeaway from the below examples – like the other listings we have run (in process manufacturing, European ports, by Verizon Business) is that private 5G is making a difference.
Separately of the big five examples listed below, SNS Telecom & IT cites mega deployments by home appliance manufacturer Midea in Jingzhou (2,500 access points), steelmaker WISCO (Wuhan Iron & Steel Corporation) in Wuhan (“85 multi-sector macrocells and 100 small cells”), and Chemical manufacturer Wanhua Chemical in Fujian (for 8,000 5G RedCap IoT devices). All of which tells of genuine commercial scale – which suggests genuine operational impact. The following examples give more colour; all the text below is from SNS Telecom & IT.
1 | JD Logistics (warehouse logistics)
The supply chain and logistics arm of online retailer JD.com – has achieved near-zero packet loss and reduced the likelihood of connection timeouts by an impressive 70 percent since migrating AGV communications from unlicensed Wi-Fi systems to private 5G networks at its logistics parks in Beijing and Changsha (Hunan), China.
2 | Baosteel (steel manufacturing)
Baostell, a business unit of the world’s largest steelmaker China Baowu Steel Group, credits its 43-site private 5G deployment at two neighbouring factories with reducing manual quality inspections by 50 percent and achieving a steel defect detection rate of more than 90 percent, which equates to $7 million in annual cost savings by reducing lost production capacity from 9,000 tons to 700 tons.
3 | Dongyi Group Coal Gasification Company (coal mining)
Dongyi Group Coal Gasification Company ascribes a 50 percent reduction in manpower requirements and a 10 percent increase in production efficiency – which translates to more than $1 million in annual cost savings – at its Xinyan coal mine in Lvliang (Shanxi), China, to private 5G-enabled digitization and automation of underground mining operations.
4 | Sinopec (chemical production)
Sinopec (China Petroleum & Chemical Corporation) has an explosion-proof 5G network at its Guangzhou oil refinery in Guangdong, China, which has reduced accidents and harmful gas emissions by 20% and 30% respectively, resulting in an annual economic benefit of more than $4 million. The solution is being replicated across more than 30 refineries of the energy giant.
5 | Guangzhou Metro (rail transportation)
Since adopting a hybrid public-private 5G network to enhance the safety and efficiency of urban rail transit operations, the Guangzhou Metro rapid transit system has reduced its maintenance costs by approximately 20 percent using 5G-enabled digital perception applications for the real-time identification of water logging and other hazards along railway tracks.
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