This is why private 5G networks are (already) of interest to companies

Rising demands for connectivity and communication are paving the way for private 5G, a cloud-era wireless technology designed for the enterprise and highly adaptable to change. Many organizations are already implementing or considering implementing private 5G because the network and data can be better controlled by the business. On top of that, private 5G allows businesses to control and customize their security settings, policies, and other aspects of wireless communications. So many assets that stimulate the popularity of these new generation private networks.

A new study, recently published by Economist Impact in partnership with operator NTT, reveals that more than half of global enterprises plan to deploy a private 5G network in the next 6 to 24 months. The survey was conducted among 216 senior IT decision makers from organizations with revenues between $250 million and over $1 billion, in industries including automotive and manufacturing, energy, healthcare, pharmaceuticals, retail and logistics.

According to this study, organizations are widely adopting next-generation connectivity and communication technologies, including private 5G. 94% of respondents are implementing upgrades that include Wi-Fi 6, 4G or 5G. Almost a quarter (24%) are piloting private 5G networks, while 6% have at least one operational private 5G network.

Energy and transport in the lead

Interest in private 5G is particularly high in industrial settings, to support use cases in robotics and autonomous driving. Energy (39%) and transport (33%) are the two sectors most likely to pilot 5G networks. Transport companies (41%) are the most likely to have already built a private 5G network.

In the automotive and manufacturing sectors, 25% of companies said they have a private 5G pilot and 5% have an operational network. In the healthcare and pharmaceutical industry, 18% of enterprises are piloting a private 5G network and 5% have an operational network.

The appeal of 5G for these sectors of activity is justified by the need for network reliability that is felt there. The slightest hiccup in the wireless network can spell disaster, which is why these verticals have historically steered clear of Wi-Fi, which can be shaky at times.

Safety, a key factor

It’s no surprise that security is a key driver for enterprise 5G adoption. 69% of respondents said network security is not addressed by their current connectivity and communication platforms, making it a top concern for organizations in all countries and industries. For 75% of healthcare and pharmaceutical organizations, security is the top issue, given the sensitive nature of the data. Other pain points cited by respondents are data control (48%), coverage and speed (43%), and the response time of their current service provider (40%).

Security is the reason most organizations are exploring solutions other than Wi-Fi. 87% of respondents believe that Wi-Fi networks do not provide a sufficient level of security for the business. Most (86%) of respondents believe that private 5G can replace Wi-Fi, highlighting the benefits of private 5G networks when it comes to security and data protection. Other benefits of implementing private 5G cited by respondents are improved data privacy (83%), faster connection speeds with lower latency (81%), and improved reliability. increase in the network for connectivity and communications (80%).

Although the adoption of private 5G appears to be accelerating, it is still in its infancy for most organizations. The implementation of private 5G is either in the short or medium term plans of organizations that have not yet piloted or implemented such networks. Globally, only 3% of enterprises plan to deploy private 5G within six months, while 15% plan to do so within 12 months, and 19% within 18 months.

Frontline managed service providers

Setting up a private 5G infrastructure comes with some technical challenges that the companies shared in the study. For 44% of respondents, integrating 5G into existing systems and networks is a major barrier. The complexity of the infrastructure needed to deploy 5G (37%) and the lack of technical skills of employees to manage 5G networks (30%) are the other obstacles to the adoption of private 5G.

For this reason, many organizations prefer to outsource their private 5G deployments. 38% of them choose to entrust their deployment to a managed service provider, with service level agreements; at the same time, a third of organizations prefer to adopt a hybrid or shared private network approach, in which they lease the network from a mobile operator. When it comes to engaging with private 5G vendors, organizations are more likely to request systems integration services (63%), post-deployment network management (62%), as well as network design and planning (54%).

The results of the study show that the adoption of private 5G networks is strongly supported by senior leaders around the world. Going forward, 94% of respondents agree that 5G will become an important part of their operations. More than 90% envision private 5G becoming a standard in their industry within the next five years, a view shared by all industries. It will also be the catalyst for the company’s digital transformation.

It’s important to understand where 5G stands in relation to Wi-Fi. Some industry observers have predicted that 5G will eat away at Wi-Fi, but that’s definitely not the case. I think these two technologies are very complementary, with Wi-Fi remaining the wireless standard of choice for general use cases, while 5G is used when reliable, guaranteed connectivity is needed. As proof, this Deloitte study shows that 98% of companies will use both technologies within three years.

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