Private 5G Network Market

Market Overview

The global private 5G network market size was valued at USD 1,376 million in 2021. It is expected to reach a valuation of USD 28,429 million by 2030 growing at a CAGR of 39.8% during the forecast period (2022–2030).

A private 5G network is a mobile network similar to a public 5G network but enables the owner to offer preferential access or licensing for its wireless spectrum. This can be advantageous when building private wireless networks at locations where coverage, speed, and security capabilities are required beyond what Wi-Fi and other network technologies can provide.

Some characteristics of private 5G are similar to commercial mobile network operators' public 5G networks. Private 5G, like all 5G networks, supplements or replaces 4G LTE as the next generation of wireless mobile technology, delivering lower latency and better throughput. Gigabit rates—or data transfer speeds of up to 10 Gbps—are promised by 5G networks. 5G services, both public and private, cut latency dramatically and can increase coverage to remote places.

Market Dynamics

Drivers: The Emergence of Industry 4.0

A specialized local area network (LAN) that offers full internet access to industry, corporate, and other users is a private or non-public 5G network. Various prominent industrial players, like Mercedes Benz AG, Siemens AG, and ABB Ltd., have adopted industrial robotics and sensor-based technologies to gain higher functional effectiveness and production with industry 4.0. The above-mentioned IIoT devices rely on the private 5G network to provide a secure and seamless internet connection.

Further, demands for real-time-based networking and Time-Sensitive Networking (TSN) are fast-growing across various industries, including transportation & logistics, aerospace, oil & gas, and manufacturing. The need for a private 5G network is expected to develop significantly throughout the projection period to enable bandwidth with high-speed connection during real-time networking and time-sensitive networking across sectors.

The oil and gas industry's rapid drive to digitization has increased the demand for exceptionally dependable and protected bandwidth. As a result, interest in high secure networks is expected to rise, particularly among the Organization of Petroleum Exporting Countries (OPEC). Thus, the advent of Industry 4.0 is likely to drive market growth during the forecast period.

Drivers: Development of Smart Infrastructure

Smart cities, for example, are conceptual models that aim to supply a combination of cutting-edge infrastructure and services. A smart city has ICT infrastructure to improve and improve the effectiveness of city activities and services. Only existing cities that adhere to the following components can be considered smart: smart utilities, smart citizen services, and smart buildings.

Smart cities deploy the Internet of Things (IoT) to collect real-time data and respond with quick and lower-cost solutions. Digital city environments, in general, are built on ICT frameworks that interconnect a variety of specialized connections of sensors, connected automobiles, mobile devices, home appliances, telecommunication gateways, and data centers.

As a result, the success of smart city projects is strongly reliant on numerous technologies—cloud, data communications, sensors, and mobility—that make up the Internet of Things. Due to the high need for quicker connectivity and communication, 5G standalone (SA) services may have a bright future.

Restraint: Stability Adoption of Wi-Fi Communication Technology

Wi-Fi communications are now widely regarded as the de-facto networking technology among businesses for providing on-site mobility to employees, linked devices, guests, and contract workers. Organizations' working productivity has grown due to advancements and innovations in wireless technologies and devices. Workers' use of Wi-Fi-equipped tablets and smart devices has enhanced company efficiency. According to an Intel white paper issued in 2016, manufacturing workers and technicians have improved their productivity.

Many businesses rely on Wi-Fi equipment to run their day-to-day operations. Employees may stay connected from any part of the workplace or building due to the extensive Wi-Fi coverage. Operating costs are reduced, and a good return on investment is realized when wireless products and smart devices are installed in businesses. The various advantages of Wi-Fi technology and its widespread acceptance among companies are crucial barriers to the market's expected growth.

Opportunities: Network Slicing to Provide New Opportunities for Operators

The whole point is that network operators can make the most of it if they correctly identify the professional markets, their precise technical requirements in terms of data rate, tolerable latency, and the massive number of connections in sending and receiving packets, and provide them with what they need with professional service level agreements.

Even though many independent private networks service corporations, many enterprise clients are not ready to invest in and build their networks. Network-level isolated infrastructure is not relevant to them. Service level assurance is far more critical for them. This allows operators to cope with them and give Network-as-a-Service (NaaS) choices by including the 'network slicing' function, enabling the operator to ensure corporate customers have a specific degree of service by applying functional level separation.

Over LTE networks, several MNOs use a technique known as "network slicing." This feature gives the operator access to network slices in the RAN and allows them to connect the slices to respond to any application. With 5G, MNOs will more easily divide resources and deliver distinct classes of rate, range, security, and other technical details to business-critical and mission-critical use-cases.

Segmental Analysis

The global private 5G network market share has been classified based on component, frequency, spectrum, vertical, and regions.

• On the Basis of Components

Based on components, the private 5G network market has been segmented into hardware, software, and services based on components. The software component is among the predominant segments of the global market because of a strong focus on cloud-based RAN, edge, and core networks. It is expected to be valued at USD 9,864 million at a CAGR of 41.1% by 2030.

• On the Basis of Frequency

Based on frequency, the private 5G network market has been segmented into mmWave and Sub-6 GHz. The Sub-6 GHz segment is likely to dominate the global market, and it is projected to reach USD 18,851 million by 2030, registering a CAGR of 36.1% during the forecast period. A mid-band and a low-band of spectrum range, mostly 6GHz and lower, are included in the sub-6 GHz frequency. South Korea, Japan, China, and the United States have recently launched sub-6 GHz frequencies to enable 5G services.

• On the Basis of Spectrum

Based on the spectrum, the private 5G network market has been segmented into licensed and unlicensed/shared. The unlicensed/shared spectrum segment is expected to dominate the global market during the forecast period, accounting for USD 20,206 million at a CAGR of 40%. The rapid expansion is linked to the growing demand for low-cost, private 5G networks with high speed. Unlicensed spectrum bandwidth is widely accessible and greatly sought during massive machine-type communications.

• On the Basis of Vertical

Based on vertical, the private 5G network market has been segmented into manufacturing, energy and utilities, transportation and logistics, defense, enterprise and campus, mining, healthcare/hospitals, oil and gas, retail, smart cities, agriculture, and others. The manufacturing segment is expected to dominate the global market, and it is likely to reach USD 6,313 million by 2030, registering a CAGR of 42% over the forecast timeframe.

The high requirement for private 5G networks to give flawless connection to various devices, including extended reality headsets, Ultra-HD cameras, and automated guided vehicles (AGVs), is attributable to the growth. Moreover, the heaving demand for machines to interact continuously is likely to drive segment growth. Energy and utilities, transportation and logistics, manufacturing, government and public safety, oil and gas, mining, and aerospace and defense are among the industries that choose a private 5G network.

Due to speedy communication and interaction with immediate responders during an emergency, several governments and public safety groups have adopted a private 5G network for various uses. Furthermore, demand is likely to expand across organizations and corporations based on an increased desire to handle their data securely on their premises.

Impact of covid-19

Due to future testing and trial obstacles in certifying the reliability and computational efficiency of standalone networks for 5G, the COVID-19 outbreak postponed the deployment of various private 5G infrastructures. The COVID-19 outbreak further influenced telecom regulatory agencies worldwide, causing them to postpone their plans for the spectrum bidding for 5G, limiting the growth of the market. For example, the governments of Spain, France, Australia, and the United States had provisionally delayed spectrum bidding for 5G on many frequencies, including mmWave and Sub-6 GHz.

The emergence of the COVID-19 pandemic and its recurrence in second and third waves in various parts of the world have increased the demand for private 5G adoption due to the network's intrinsic benefits. High bandwidth, reduced latency, improved video, and remote sensing benefit from private 5G, which can be implemented effectively for all orientations working remotely. As a result, enterprises are seeing private 5G as a way to meet the standards set by the post-pandemic new normal scenario, and this factor has expedited the development of private 5G around the world.

Market Recovery Timeline and its Challenges

The post-pandemic phase will be significant for the global private 5G network market. The recovery can be hindered by a lack of skilled professionals or labor shortages, which will affect the market dynamics and the prices of the product. But factors like the evolution of Industry 4.0 and the development of smart city infrastructure will continue to drive the global market. Overall, the recovery will be quick for the global private 5G network market.

Regional Analysis

The global private 5G network market share has been segregated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. 

The Dominance of Asia-Pacific in the Regional Market

Asia-Pacific is likely to be the largest Private 5G Network market over the forecast period, with an expected value of USD 9,214 million at a CAGR of 42.3%. The existence of numerous businesses and their significant investments in developing automated facilities in the region are credited with the expansion. Considerable expenditure on 5G spectrum acquisition in important countries like Japan, South Korea, China, and Australia is also expected to contribute to regional market growth.

North America is anticipated to be the second-largest private 5G network market over the forecast period, accounting for USD 9,185 million at a CAGR of 40.5%. The considerable increase in expenditures by significant service providers, like Verizon Communications and AT&T Inc., for developing private 5G network infrastructure will likely help North America achieve a considerable market share. Also, top automobile manufacturers such as General Motors and Ford Motor are expected to deploy numerous industrial sensors, creating considerable growth potential in the North American region. The heaving demand for Ultra-reliable Bandwidth Low Latency Connectivity (URLLC) is likely to augment the growth of the North American market.

Recent Developments

• February 2022- Qualcomm Technologies, Inc. and Microsoft Corporation partnered to develop chip-to-cloud solutions for the global deployment of a private 5G network.
• February 2021- In Shanghai, the globe's first commercialized 4.90 GHz LampSite infrastructure was deployed by Huawei and China Mobile. For the first time in digital indoor networks, an average bandwidth of 200 MHz was paired with distributed Massive MIMO on the 2.6 GHz and 4.9 GHz bands.
• February 2021- Huawei, China Mobile, and Haier unveiled their 5G MEC Joint Innovation Base at the Haier Institute of Industrial Intelligence. The real potential of the 5G network is realized when it is paired to MEC, a potent accelerator for a mix of application, compute, and connectivity.
• February 2020- Vodafone Ltd. has teamed up with Lufthansa Technik to build a private 5G network campus at Hamburg Airport. This strategic alliance will enable Lufthansa Technik to tailor network configurations to their specific requirements. 

Private 5G Network Market Segmentation

By Component

• Hardware
  • Radio Access Network
  • Core Network
  • Backhaul and Transport
• Software
• Services
  • Installation and Integration
  • Data Services
  • Support and Maintenance

By Frequency

• Sub-6 GHz
• mmWave

By Spectrum

• Licensed
• Unlicensed/Shared

By Vertical

• Manufacturing
  • Food and Beverages
  • Automotive
  • Pharmaceuticals
  • Electrical and Electronics
  • Heavy Machinery
  • Clothing and Accessories
  • Others
• Energy and Utilities
• Transportation and Logistics
• Defense
• Enterprise and Campus
• Mining
• Healthcare
• Oil and Gas
• Retail
• Agriculture
• Smart Cities
• Others

By Regions

• North America
• Europe
• Asia-Pacific
• South America
• The Middle East and Africa