4 triggers for private network demand

Despite the interest in private networks, enterprises are still trying to understand “why private networks” and how private networks can meet their needs. Some needs are more pressing than others. In this article, we identify a few tangible examples of triggers for private network demand.

Deployment pathways for private networks

Through our extensive engagement and primary research conducted with the enterprise community, we have seen two broad pathways or deployment models emerge of how enterprises have deployed private 4G LTE/5G networks.

• Tactical solution: This is typically a tactical technology-led decision, which is focused on solving a clear pain point that isn’t addressed with existing solutions (e.g. connectivity) and needs to be addressed immediately. This may be more focused on a single specific use case or application.
• Strategic transformation: Typically more a strategy-led decision, can be driven top-down or from a centralised digital transformation team, and is less focused on a particular use case but more on broader digitalisation and transforming IT and OT. These opportunities primarily centre on private 5G as an innovation platform and enabler of wider business and operational transformation, in tandem with other technologies like edge computing, IoT, AI/ML and digital twins. We explore this more in our article here.

This is not to say these opportunities are mutually exclusive but are in fact more of a spectrum. Some tactical solution opportunities are more strategic in nature, and many of them can turn from tactical opportunities to wider strategic transformations should they successfully scale.

Strategic transformation opportunities can be harder to come by and to address – this often requires alignment across enterprise customer stakeholders (both IT and OT), a clear vision and customer buy-in, a solid business case and therefore longer decision/buying cycles. It also requires the relationships, capabilities and (often vertical-specific) expertise to deliver an end-to-end solution.

In comparison, tactical opportunities by nature are typically more urgent and often more focused on a pain point that a specific stakeholder group has. Many of the earlier and scaled deployments of private networks (typically LTE) have started as tactical opportunities, solving an existing challenge with current connectivity solutions for example (see our Private Networks Global Insights Tool for examples).

In this article, we explore some example tactical opportunities to look out for and triggers for these.

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Trigger 1: Refresh of legacy connectivity systems

Key stakeholder: Enterprise network teams (NT-driven)

These opportunities stem from situations where existing connectivity solutions that an enterprise customer has deployed are coming to the end of life and/or are expensive to maintain. As a result, enterprise network teams are evaluating options that can help serve current and future needs going forwards. In many cases, the investment has already been ringfenced for a new solution.

Example scenarios:

• Need to refresh or replace private mobile radio (PMR) systems like TETRA and P25
  • Could be where public access mobile radio (PAMR) system-like capabilities may be required to allow access to users who are not system owners or the operator
• Where there is spectrum “refarming” that needs to be done

Trigger 2: Other connectivity solutions just don’t suit my (evolving) needs

Key stakeholder: Enterprise network teams (NT-driven), but also ultimately enterprise OT as the customer

This is where current forms of connectivity (e.g. Wi-Fi, ethernet, public cellular) are not sufficient to meet evolving requirements of the enterprise’s OT and IT stakeholders. Many of the earlier deployments of private networks fit into this category, particularly in environments and industries such as mining, oil and gas, terminal ports and airports.

Example scenarios:

• Where there are coverage issues outdoors or in hybrid indoor-outdoor environments with Wi-Fi
• Where there are reliability, resilience and consistency issues with Wi-Fi (e.g. risk of interference, in heavy presence of metal for example)
• Need to enable mobility use cases, which is problematic with ethernet and in some cases Wi-Fi
• In rural, rugged and/or offshore environments where fibre is expensive or problematic to build out (e.g. in a remote mine)
• In remote sites that struggle with public cellular

Trigger 3: I need a way to address regulatory and/or compliance obligations

Key stakeholder: Enterprise network teams and compliance teams

There have also been a number of deployments of private LTE or 5G as a result of regulatory mandates or compliance obligations. This is where the enterprise is accountable for certain operational standards and/or regulatory or corporate compliance requirements. In particular, opportunities arise when regulation has changed on a certain aspect. In this case, it is the ramifications of a potential compliance breach and associated fine or even potential incident that justifies the need for a solution or use case enabler that addresses these requirements. This means that any failure (in the use case or network) can be consequential.

Example requirements:

• Health and safety (in hazardous environments e.g. mining, oil and gas, ports, chemical manufacturing etc.)
• Security (including IT security, physical and cybersecurity)
• Product quality and safety (in process manufacturing for example)

Trigger 4: Refresh of legacy use cases or applications

Key stakeholder: OT (operational teams) driven

Upgrades of legacy use cases that are expensive to maintain have been an interesting and compelling catalyst for demand of private networks. This is where enterprise stakeholders have certain use cases they are looking to refresh and are identifying ways to potentially enhance the way the use case is delivered.

Example scenarios:

• Manufacturing: transitioning from automated guided vehicles to autonomous mobile robots,
• Mining and ports: Enabling remote operations of machinery and equipment (e.g. of quayside and gantry cranes in ports)

We explore examples of this trigger in our first edition of our private networks proposition playbook, focusing on key use cases in port environments.

Why do we need to understand these triggers?

Understanding these triggers and the stakeholders involved in the decision making is important as it affects the type of challenges, key questions and requirements that the stakeholder ultimately has. Our team at STL Partners has worked with our clients to help enable their sales teams to recognise and correctly identify these opportunities with tools such as playbooks, primers and other sales enablement tools.

From our Private Networks Insights service, this includes:

• Our Private 5G ROI tool for manufacturing, developed in partnership with the Fraunhofer IPT and WZL
• Our private networks proposition playbooks, with the first edition focused on the ports industry

Yesmean Luk

Yesmean Luk

Principal Consultant

Yesmean is a Senior Consultant at STL Partners and has led and managed client projects with both operators and technology companies across a number of domains, including private networks, telco cloud, network slicing, edge computing and IoT. Before joining STL, she held various consulting roles at Deloitte and IBM. She holds a Global MSc in Management from the London School of Economics, specialising in strategy and international business.