Wireless carriers have repeatedly named private networks as a key 5G opportunity, but as the months pass and the deals trickle in, some analysts are starting to question the thesis. As executives answered analyst questions during Q2 earnings calls, two themes emerged around private networks. First, carriers expect their corporate customers to deploy private networks in order to connect to mobile edge compute (MEC) resources. Second, existing relationships with enterprise customers are likely to drive deals in the coming months.
When it comes to existing relationships, AT&T and Verizon have an advantage with large enterprises. Executives at T-Mobile and Dish recognize this, and during their Q2 earnings calls both made a point of telling investors how they are building their base of corporate customers.
T-Mobile and Dish also claim a technical advantage, since they have already launched standalone 5G core networks. 5G supports dynamic allocation of network infrastructure and software to specific use cases and customers, a process known as network slicing which is implemented in the core. A network slice is not the same as a private network, but both can accomplish similar objectives for an enterprise, including support for MEC.
So which carrier has the upper hand in the private networking space?
During Verizon’s Q2 earnings call, chairman and CEO Hans Vestberg called his company “the world leader in mobile edge compute and private 5G,” while Dish Network claimed its network will ultimately offer enterprise customers technology which competitors will not be able to match. And T-Mobile intimated that its potential in this area remains largely untapped.
“Private networks are the gateway to mobile edge compute, which can deliver game-changing customer outcomes, including revenue growth, new customer experience and cost savings,” Verizon’s Vestberg said during the earnings call. His comments were focused on the emerging market for private 5G networks, which is not expected to equal the market for private LTE networks for several years.
“During the quarter, we announced several private 5G networks,” the CEO continued. “We see more and more customers feeling that. That’s a good replacement for them in order to have a secure, high-capacity network instead of having Wi-Fi in many cases.” Verizon’s Q2 private 5G wins included Virginia International Terminals, which will use the technology at one of its container terminals, and BlackRock, which will use the carrier’s On Site 5G platform.
T-Mobile and Dish
T-Mobile fielded questions about private 5G and MEC from analyst Craig Moffett of MoffettNathanson during its Q2 earnings call, and CEO Mike Sievert said his company has been making quiet progress here. “We’re a lot further along in this space and in thinking around it and execution around it than you would probably surmise from our press releases,” he claimed. “But we’re hesitant to take an early business like this and forecast it forward for you when it’s in its infancy. … our view is it’s an emerging market.”
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