Dell’Oro: Private networks are a $20B+ opportunity

The growing private wireless opportunity is a massive yet “largely untapped,” Stefan Pongratz, Dell’Oro Group VP, said in the analyst firm’s latest private wireless second quarter report. The sector presents a stark contrast to public wireless, which has suffered a recent downturn.

Private wireless radio access network (RAN) revenues are projected to grow at a 21 percent compound annual growth rate (CAGR) over the next five years, while public RAN revenues are set to decline at a 3 percent CAGR over the same time period.

“The evolving scope of private wireless, combined with the fact that the $20 billion-plus enterprise RAN opportunity remains largely untapped, is spurring interest from various participants across the ecosystem,” Pongratz said in an email to Fierce. “Even as private wireless has not accelerated as fast as some vendors expected, more than 50 private RAN and 5G core suppliers/SIs are betting that investments will eventually produce dividends.”

The top three major suppliers of private RAN are Huawei, Nokia and Ericsson. And Ericsson is clearly trying to win more private network customers with its latest moves.

Chinese core

“Huawei is strong in China. Its revenue share outside of China is smaller with private than public RAN,” Pongratz noted. “Huawei remains the largest private wireless RAN supplier globally, while Nokia continues to lead outside of China,” he added. 

Outside of China, the top three suppliers are Nokia, Ericsson and Samsung, Pongratz said.

China is a unique market for private networks. Companies operate thousands of pure 5G private networks, compared to the largely 4G LTE-focused private networks that still dominate in parts of Asia, Europe and North America. The Chinese government only allocates spectrum to three major Chinese mobile operators – China Mobile, China Telecom and China Unicom – so generally “the core terminates in carrier infrastructure close to the enterprise customer,” Roy Chua, AvidThink principal analyst, said in an email.

Indoor RAN

Part of the growth of private networks will stem from a focus on good, indoor 4G and 5G coverage. 

“Since the role and value of RAN and services will change when comparing the traditional outdoor macro network with enterprise 5G, it is perhaps not a major surprise that the private RAN dynamics have not changed much so far,” Dell’Oro’s Pongratz stated. 

“Since it is still early days, there is room for the vendor dynamics to evolve as regional activity and adoption across the various industrial and non-industrial verticals improve,” he concluded.