Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, September 22, 2020

Private networks for verticals: lobbies battle that is coming in the 5G era

The industrial private 5G raises as requirements the guarantee of coverage and performance, to be able to "orchestrate" multiple assets in motion within the manufacturing field, using multiple applications at the same time, with prioritization of traffic and in a safe environment. Mainly three models are being considered in Europe, Japan and the United States: “do it yourself” (DIY), in which the vertical is encouraged to face an implementation of a mobile network; those led by telcos and hybrids.

Non-public deployments (Non-Public Networks, or NPNs) of enterprise customers are seen as the great opportunity in the 5G mobile business, as an enabler of services that Wi-fi today cannot guarantee as real-time monitoring of assets, augmented reality and robotics, among other applications.

The UK, Germany, Japan and the US are leading these ventures, with 5G spectrum allocations for businesses, and the numerous announcements in recent months about networks owned by automakers, factories and even rural farms anticipate a true battle of lobbies on two fronts, simultaneously. On the one hand, which players in the mobile ecosystem will capture most of the NPN business: mobile operators (quite far behind so far); traditional vendors, such as Nokia and Ericsson, which are aggressively advancing; incoming players with specific vertical know-how (the Belgian Citymesh, or the Finnish Edzcom and Tampnet, for example); or a combination of all three. In parallel, there will be a discussion on the reservation of frequencies for industries, their coexistence with the spectrum assigned to mobile operators and the decision on which bands to "sacrifice" from the massive world for productive uses.

The industrial private 5G poses certain requirements that a mobile public network might not satisfy: the guarantee of coverage and performance (low latency, bandwidth and reliability), to be able to “orchestrate” multiple assets in motion within the manufacturing environment, using multiple applications at the same time, with traffic prioritization and in a safe environment. Faculties that, as a whole, cannot be addressed by today’s deployments diffused for business clients, such as Ethernet, Wifi or previous cellular generations. In particular, the “best effort” concept associated with the public mobile service does not apply to critical communications or those of the highest level of reliability, such as those designed for these business cases.

NPNs are divided into two categories: those deployed as isolated networks, Stand Alone, and those in conjunction with a public network. For both options, mainly three models are being considered in Europe, Japan and the United States: “do it yourself” (DIY), in which the vertical is encouraged to face an implementation of a mobile network; those led by telcos and hybrids. The latter prevail today worldwide, with 40% of deployments, according to an Omdia survey: they are in the hands of traditional or specific vendors, who only entrust the operator with the provision of connectivity.

Entities like the GSMA are staunchly opposed to DIY schemes and band fragmentation: they argue that operators should have the opportunity to access these use cases; and they argue that in TDD bands, if frequencies are delivered to private parties, coordination in upload and download slots would be necessary, with possible complications in the delivery of services. Nokia and Ericsson encourage operators not to get out of hand with the business of private networks, but in turn develop projects without having them as partners. To name one case, the Swedish company will deploy 5G networks in the three largest airports in Paris, to provide connectivity to 120,000 employees and contractors and employees of 1,000 different firms, in the hands of the technology subsidiary of the airport group ADP, Hub One.

Daniel Martello, Network Evolution strategy manager for Ericsson South America, observed that in Latin America there is no willingness on the part of operators to turn to these business uses, but they should inspect it because they run the risk of capturing very little of a business with great potential at an industrial level. The company's Mobility Report study estimates a volume of US$ 700 billion annually by 2025, on a global scale, and this amount represents 35% more than that generated by mobile operators that year.

On their part, certain vertical cameras - for example, ZVEI, the German Association of Electrical and Electronics Manufacturers - are turning in favor of these models without mobile operators involved. And others such as 5G-ACIA (5G Alliance for Connected Industries & Automation) are located between both positions. Alexander Bentkus, Secretary General of 5G-ACIA, considers that it is necessary to explore collaboration models in the alternatives that exist today (and variants according to the regulation of each country): companies that acquire spectrum and contract an operator to develop the network for them; sub-licensing, so that the operator grants a local license to a given industry; operators that grant a company a Stand Alone network; and companies that acquire the managed service from a traditional or specific vendor.

Regulatory approach. German regulator BNetzA set a precedent by reserving 100Mhz at 3.7Ghz for business networks. In that European country, among other buyers, Siemens paid € 5,500 for a 10-year license to cover its 200-square-meter factory in Amberg, in Bavaria. The United Kingdom took a similar path, but at 2.5 GHz and allows you to acquire up to 200 MHz per license. France's Arcep, on the other hand, aligned itself with operators, creating an industrial policy instead of making spectrum available for industries, but at the same time established that in the next auction of 3.4-3.8 GHz, the winners will have to "slice” their 5G networks for industry, or make local sub-licensed portions for them. And Spain is studying allocating specific spectrum for industrial and private uses, with 26 GHz as the main option.

Faced with the varying approaches in Europe, in Latin America, 5G private networks are still part of a distant horizon. Chile is considering reserving frequencies at 2.3 GHz for business “campus” networks and Brazil is considering allocating unused spectrum at 3.5 GHz for key verticals.

In Argentina, the possibility of assigning bands for verticals was included in the public consultation on spectrum carried out in 2019. The document analyzing the responses to this process concluded that the assignment of frequencies for networks for private use is not adequate, especially in bands considered priority for 5G such as 3.5 GHz, 26 GHz or 28 GHz. Shared-use approaches such as leasing were postulated as a better alternative. Under the current administration, the issue is still under analysis by Enacom. Regulator sources trusted that there are informal requests from interested companies.

First person cases

INDUSTRIAL PROTOTYPES. The National Composites Center (NCC) manufacturing center, which depends on the University of Bristol, creates prototypes for different industries in Great Britain (including Airbus). To expand the number of connected sensors - it needs to go from the current 10 to about 200, at a latency of 5 milliseconds - it decided to opt for a private 5G network. It applied to regulator Ofcom for a 3.8 GHz license and hired a local firm, Zeetta Networks, to deploy it. They are currently testing a 4G version, although they hope to launch services over 5G in early 2021. Vassilis Seferidis, CEO of Zeetta, highlighted two additional use cases to connecting the sensors within the NCC: training in virtual reality - by example for Airbus artifacts - and monitoring of various assets continuously within the factory, and between plants.

MINING. Nokia exceeds 120 commercial agreements with private networks on the five continents, and 9% of them are concentrated in Latin America (these are 4G deployments). In Peru, it faced an implementation by Telefónica, for the Las Bambas mining company: this company had a TETRA network, but it sought to automate and digitize its industrial processes with video, machines, emergency services and connected control centers. The deployment was carried out in a 700 MHz portion of the operator, with a dozen LTE base stations, according to Enrique Ramírez, Nokia's CTO for Latin America. In Brazil they have a similar deployment, together with Vivo, with mining company Vale, which used to use WiMax and is now connecting users and machines to the new private LTE network.

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