AWS launched its private networks service to simplify the deployment for enterprise customers. This move further disrupts telcos’ position as the main cellular connectivity providers and lowers the entry barriers for new emergent players. But to what extent can AWS service support the diverse enterprise requirements and compete with telcos and other players in the market?
What is AWS offering?
AWS offers its new Private 5G service to customers in the US to tackle two significant issues with private networks deployments: complexity and cost. The service aims to:
- Simplify and accelerate the planning and deployment of networks
Private networks projects usually require collaboration among several different partners including technology vendors and system integrators to support the implementation across various phases. Enterprises invest considerable time, money and effort working with these partners and suppliers and going through several phases of planning the networks and sourcing equipment and then deploying, integrating, and configuring the network. This all might typically take weeks or months. AWS wants to streamline the process and shorten the time for customers in a way similar to how they consume computing resources through its AWS cloud services.
To order, customers use the AWS website to specify the location of their network and the capacity they require. AWS then ships the network components within days. These include small cell radios and servers as well as software to run the RAN and core network. AWS will also provide SIM cards to all the devices in the network. All components come pre-configured so that they require minimum effort from the customer aside from installing them, turning on the network and inserting SIM cards into devices. AWS will also manage the network, monitor its operations, and run software updates when needed.
- Define and reduce the cost of deployment
This AWS streamlined procurement process is also supported by a clearer and easier pricing model that is likely to be quite attractive for many enterprises. It is a cloud-based pay as you go model with no upfront capital cost or fees per device. As opposed to per-device pricing models which can be cost-prohibitive for a network with a high number of connected devices, the AWS model only requires customers to pay for the capacity that they use. This means that they can run as many devices as they like without increasing the cost substantially, especially if these devices have simple data requirements. Customers can simply scale up or down as needed.
With this service, AWS is testing the demand for private networks and its ability to enhance its overall enterprise proposition. The service complements AWS existing services and will build on the need for edge and cloud compute, storage, analytics and other services. Similar to Wavelength proposition where AWS partner with telcos to support the delivery of network edge, AWS Private 5G can create partnership opportunities and sales channels for AWS to strengthen its enterprise business.
Where will it be launched?
The service is now available on preview to US customers only as it runs on the CBRS spectrum. The CBRS spectrum access model in the US with its two main tiers; the Priority Access License (PAL) and the General Authorised Access (GAA) has essentially laid the ground for this AWS service model by enabling access to spectrum for non-telcos. The GAA which is the lowest priority tier allows anyone to use the spectrum to deploy a private network under the management of a Spectrum Access Server (SAS). Many companies are already deploying and experimenting with LTE and 5G using the unlicensed GAA spectrum. However, GAA is still an opportunistic type of access and in some specific use cases or locations where customers might want to ensure their access, they can opt for a PAL license.
Following its US launch, AWS might want to expand their service globally. However, the disparities between countries and regions on how private networks are deployed might will not make that easy. Many countries such as the UK, Germany and Japan are allocating shared licensed spectrum for enterprises to support the deployment of private networks, but licensing models and frequency bands differ. AWS will need to understand these differences in every market and adjust its offering accordingly. In some regions where there is no enterprise shared spectrum, AWS might have to partner with or sell through telcos.
What kind of companies will deploy it?
Generally, there have been many examples of CBRS private networks across a wide range of verticals and use cases including in mining, manufacturing, transport, utilities and even healthcare and education. However, one of the challenges of private network deployments is that customers’ environments vary and there might still be planning and deployment issues that are unique to specific places and locations such as RF planning, assurance, integration with the enterprise IT and security, and coexistence with legacy radio and connectivity solutions. These deployment challenges are also affected by size of the deployment and its desired performance. While large enterprises might still leverage AWS service for its deployments, the turnkey nature of it makes more suitable for small to medium enterprises that are looking for a more reliable wireless network option.
AWS announced that its first deployment was in one of Amazon Fulfilment Centres to support reliability and mobility requirements for its warehouse operations. Dish Network and Koch Industries are both lined to become the first sales channel partners and utilise the service for their customers.
Of these two, Koch Industries in addition to Amazon’s own operation suggest that some of the use cases and sectors that AWS is targeting include factories, warehouses, and other industrial settings. In such locations, private networks can provide a level of reliability and support for mobility that Wi-Fi cannot. Amazon demonstrated how it used the technology to replace outdoor Wi-Fi coverage at a parking lot of its warehouse. The company explained that using private 5G was more cost-effective and quicker to deploy than Wi-Fi as it only required two small cells mounted on the corners of the warehouse. While to get a decent coverage with Wi-Fi, the company previously went through the trouble of mounting light poles for the equipment, extending fibre to support the mesh systems and also changing the outdoor electrical systems.
With the rise of industry 4.0 and as many companies have started going through digital transformation, AWS and other hyperscalers have managed to establish some presence in the industrial sector with their IoT platforms and solutions. This private network service, together with edge computing and other on-prem solutions, allow AWS to strengthen its position in the sector.
On the other hand, highly complex environments with very strict reliability, latency and security requirements and human safety mandates, such as transportation hubs and energy plants, are also increasingly adopting private networks to support their critical operations. The simplified AWS deployment model with its customer self-installation and pre-configuration aspects might be too generic for such scenarios. For example, Lufthansa Technik when deploying its private network in Hamburg Airport came to discover and deal with the issue of 5G signal degradation through aluminium alloy and carbon fibre and how that affects the communication between the aircraft cabin and the edge servers. It is not clear yet whether AWS will offer some additional support or customisation if certain customers require that, but this is already a big opportunity with plenty of customers that AWS can target with a horizontal offering.
Also, the ease of accessing and deploying networks in the unlicensed portion of CBRS, in general, has enabled uses cases in niche or emerging sectors such as education and healthcare including providing connectivity to students in rural counties during lockdowns or supporting hospital unit extension during crises, respectively. AWS pricing model can further support the adoption within these sectors and similar sectors where customers are severely constrained by the cost.
Are telcos losing the private networks market?
Over the last two years, telcos’ understanding of their position in private networks has gradually changed from wanting to do it all and, therefore, being highly protective of their role as the main connectivity providers to becoming more accepting of playing a collaborative role in private networks as the market dynamic changes. This has been further established as licensed and shared spectrum schemes started to become available to enterprises in different countries, easing the way to network ownership and deployment for many enterprises, especially large ones.
While telcos’ role might have been affected slightly, they have not completely lost the private networks race to hyperscalers and other emerging players quite yet. Many companies that wanted to own spectrum and build networks independently continue to partner with telcos to leverage their telecoms experience in building and managing networks. In some countries where regulators have decided against licensing spectrum to enterprise such as in China, telcos remain the main providers of private networks.
However, the AWS move represents a significant step in reshaping the market and changing thinking around private networks. It lowers the barrier to adoption and will help bring the technology closer to a wider audience, urging participation from the larger 5G and enterprise ecosystems and increasing the appetite for innovation in private networks and enterprise solutions. The service might also disrupt some of the future plans for telcos around network slicing as they aim to target SMEs with customised slices where dedicated private networks are not feasible. Also, telcos need to watch out for how AWS would structure and simplify billing for connectivity as this is something that telcos have not been good at historically.
And while AWS service might help with the rollout of many private networks, it might not be the answer to every problem. As more customers start to adopt the AWS service, there will be a better understanding of its actual capabilities, what types of deployments that customers can set up by themselves and where they need additional support, and what types of indoor environments and use cases that it is best suited for. This also will create opportunities for other stakeholders including telcos to partner with AWS or other technology providers with possibly similar offerings such as Cisco with its new hybrid 5G-Wi-Fi solution. Telcos can also develop their own solutions to fill the gaps.