Three Cellular Networking Predictions For 2021
As we put a tumultuous 2020 in the rearview mirror, there are a number of exciting developments unfolding in the world of cellular networking. As a technology analyst that spends a significant time with both infrastructure providers and carriers, I anticipate three things gaining momentum in 2021: 5G private networking, Open RAN and the widespread launch of discrete 5G services. Let’s take a closer look at these trends.
Private networking adoption ramps
Private networking allows a select number of devices to communicate with one another. One might ask, how is that different than the mobile services offered by familiar carriers globally? Public carrier networks serve large subscriber bases with speed and performance dependent on the number of users, density of base stations, spectrum characteristics, and other factors. On the other hand, private cellular networks dedicate hardware infrastructure and software for a particular customer deployment and can be fine tuned based on the need for low latency and/or high throughput.
With new-found access to licensed spectrum, enterprises, municipalities, utilities, oil and gas companies, mining operations, healthcare systems, automobile manufacturers, agricultural cooperatives and others are dipping their toes into private cellular networking. While Wi-Fi will continue to have a strong foothold within the carpeted environments of these same entities, cellular communications and, in particular, 5G are compelling for operational technology (OT). Astonishingly, nearly three fourths of “non-carpeted” OT areas such as warehouses, manufacturing lines and industrial control systems are not served by Wi-Fi today. From my perspective, some of the most compelling use cases in these environments are:
- improving manufacturing yields with machine to machine communication
- bolstering worker safety through autonomous operations
- the use of Internet of Things (IoT) sensoring for industrial applications, chain of custody and control and “smart” city management.
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In 2021, I believe that the deployment of private cellular networking will ramp significantly. From an infrastructure perspective, Nokia is a clear leader given its early focus and claim of over 220 4G LTE and 5G customers. It is also important to note that Nokia announced the first commercially available standalone 5G private networking solutions in July 2020. With that said, Ericsson and Samsung Networks both offer private networking solutions as well. As for carriers, AT&T announced a partnership with Nokia late last year to offer enterprises the ability to build private 5G networks utilizing Citizens Broadband Radio Service (CBRS)/OnGo spectrum assets. I’ve written about CBRS in the past, and if interested you can find that article here. AT&T is also currently supporting the U.S. Department of Defense in a private 5G pilot program at the San Diego Naval Base for a smart warehouse application to improve logistic operations from ship to shore. All of this activity sets the table for the growth of private networking this year.
Open RAN finds its footing
Open Radio Access Network (RAN) was a hotly debated topic in 2020. Open RAN is compelling because it has the potential to significantly lower both the capital and operational cost of deploying cellular networks. However, one of the tradeoffs could come in the form of lower performance and higher integration complexity. With that said, many U.S. government officials clamored for Open RAN evaluations in 2020 given its ability to bring a new ecosystem of domestically sourced hardware and software vendors together and reduce dependence on European and Chinese infrastructure.
In 2021, I predict that Open RAN proof of concepts will proliferate, and that “greenfield” or new network deployments by the likes of Dish in the United States, Rakuten in Japan and Reliance Jio in India will adopt some form of Open RAN. I suspect that incumbent carriers will evaluate it as well, but I believe their prior commitments to the traditional RAN infrastructure that kicked off 5G deployments will make Open RAN more relevant for future 6G network buildouts.
5G discrete services will abound
I have penned a number of Forbes articles in the past with respect to forward looking 5G use cases. In 2021, I anticipate that carrier leaders such as AT&T, T-Mobile, Vodafone, Deutsche Telekom, and SK Telecom will roll out a host of new 5G services for both consumers and enterprises. The pressure to do so is immense. The investment in deploying 5G is in the tens of billions per carrier, and if the recent U.S FCC C-Band spectrum auction is any indication, spectrum assets will continue to spiral upward in cost. From my perspective, carriers did not do a good job of monetizing the deployment of 4G LTE. They focused on access and when the unlimited plan shoe dropped in the U.S., margins and average revenue per unit (ARPU) nosedived. To make matters worse, Over-The-Top (OTT) players reaped the benefit of carrier infrastructure with app-based smartphone streaming and other services. The same simply cannot happen in a 5G world.
What 5G services should be expected in the U.S. market in 2021? From a consumer perspective, I expect low latency mobile gaming offerings as well as mixed reality experiences tied to sporting events and concert venues as the world begins a measured return to normalcy post-pandemic. However, I believe the most compelling 5G offerings will come on the enterprise side, in the form of augmented field service applications, a more personalized brick and mortar retail experience and enhanced tele-medicine capabilities (especially in light of Covid-19). I expect T-Mobile and SK Telecom to continue to disrupt the consumer segment with new offerings and extend their legacies of driving value. From an enterprise perspective, I expect that AT&T will lean into its significant investments in lab efforts and key verticals—including manufacturing, retail, healthcare, finance and public sector—to unlock value for its 5G investments. Deutsche Telekom and Vodafone are two standouts in my mind in Europe that should help enterprises accelerate digital transformation with respect to manufacturing automation and industrial IoT applications.
The hype cycle for 5G hit its apex in 2020, but this should be the year that we begin to see significant momentum and traction in the form of private networking, Open RAN and discrete 5G service deployment. 5G standalone public and private networks should also begin to deploy and unlock the true promise of 5G. It is a positive perfect storm for the telecommunications industry, and it will be exciting to see it unfold.
Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising, and/or consulting to many high-tech companies in the industry including AT&T, Nokia, and T-Mobile. I do not hold any equity positions with any companies cited in this column.