Private 5G is coming soon to a business near you | ZDNet

Increasing connectivity and communication demands are paving the way for private 5G, a cloud-era wireless technology designed for the enterprise and highly adaptable to changes. Many organizations are already implementing or thinking about implementing private 5G because the network and the data can better be controlled by the enterprise. It can also be restricted to a certain location, providing coverage both indoors or outdoors in places such as manufacturing plants and ports.

On top of that, private 5G allows organizations to control and customize their security settings, policies, and other aspects of wireless communications.

A new study recently published by Economist Impact in partnership with NTT, surveyed organizations around the world and uncovered that more than half of them plan to deploy a private 5G network within the next six to 24 months. The survey included 216 C-level and senior IT decision-makers from organizations with a revenue of $250 mil. to more than $1 billion. The respondents came from various industries in Germany, Japan, the UK, and the U.S., and they included automotive and manufacturing, energy, health care, pharma, retail, and logistics.

According to the study, organizations are broadly adopting next-gen connectivity and communications technologies, including private 5G. Ninety-four percent of the respondents are implementing upgrades that include Wi-Fi 6, 4G, or 5G. Nearly a quarter (24 percent) are piloting private 5G networks, while 6 percent have at least one operational private 5G network. Among those with one operational private 5G network, the largest group is from the U.S. (9.3 percent) followed by Germany (7 percent), although Germany leads (33 percent) when it comes to piloting private 5G networks. 

Energy and transportation lead the way for installing private 5G 

Private 5G interest is especially high in industrial settings to support smart manufacturing use cases such as robots and self-driving machines. Energy (39 percent) and transport (33 percent) are the two industries more likely to be piloting 5G networks. Transport companies (41 percent) are most likely to have already built a private 5G network. Within the automotive and manufacturing industries, 25 percent of companies reported having a private 5G pilot and 5 percent have an operational network. In health care and pharma, 18 percent of companies are piloting a private 5G network and 5 percent have an operational network.

These industries make sense as network reliability is critical to business operations. Even the smallest hiccup in the wireless network can cost millions of dollars, which is why the verticals listed above have historically stayed away from Wi-Fi, which can be flaky at times. I’m sure everyone reading this has experienced a Wi-Fi network that appears to be working fine and then suddenly stops working and then just as quickly starts again. This is fine in a carpeted office but not on a manufacturing floor. 

Security is top driver 

Not surprisingly, security is a key driver for private 5G adoption. Sixty-nine percent of the respondents said network security was not being addressed by their current connectivity and communications platforms, making it a top concern for organizations across countries and industries. For 75 percent of health care and pharma organizations, security is the biggest pain point, given the sensitive nature of the data. Other key pain points cited by the respondents were control of data (48 percent), coverage and speed (43 percent), and the response time of their current service provider (40 percent). 

Security is the reason why most organizations are exploring solutions beyond Wi-Fi. Eighty-seven percent of the respondents believe Wi-Fi networks don’t provide a sufficient level of security for the enterprise. In fact, most (86 percent) of the respondents believe private 5G is a substitute for Wi-Fi. That’s because private 5G networks offer several advantages to compliance-driven organizations for customizing security and data protection. The other benefits of implementing private 5G cited by the respondents are improved data privacy (83 percent), faster connection speeds with lower latency (81 percent), and increased network reliability for connectivity and communications (80 percent). 

Although private 5G adoption seems to be speeding up, it’s still in the early stages for most organizations. Implementing private 5G is either in the short- to medium-term plans for organizations that have yet to pilot or implement such networks. Globally, only 3 percent of companies plan to deploy private 5G within six months, while 15 percent plan to implement within 12 months, and 19 percent within 18 months.

Building out private 5G infrastructure comes with some technical challenges that organizations shared in the study. For 44 percent of the respondents, a major barrier is integrating 5G with legacy systems and networks. Complexity around the infrastructure needed to deploy 5G (37 percent) and employees lacking technical skills to manage 5G networks (30 percent) are the other barriers to private 5G adoption. 

Managed services as a viable option for deployment 

For this reason, many organizations prefer to outsource their private 5G deployments. Thirty-eight percent of organizations choose to outsource to a managed service provider with service-level agreements; meanwhile, one-third of organizations would rather have a hybrid or shared private network approach, where they lease the network from a mobile operator. When it comes to engaging with private 5G suppliers, organizations are most likely to request system integration services (63 percent), post-deployment network management (62 percent), and network design and planning (54 percent).

The study’s findings show adopting private 5G networks is strongly supported by senior leadership across the globe. Looking ahead, 94 percent of the respondents agree that 5G will become an important part of their operations. More than 90 percent envision private 5G becoming a standard in their industry within the next five years — a view that is shared across all sectors. It will also be the catalyst for enabling digital transformation in the enterprise.

It’s important to understand the positioning of 5G versus Wi-Fi. Some industry watchers have predicted that 5G would eat away at Wi-Fi, but that’s certainly not the case. I believe the two to be highly complementary with Wi-Fi continuing to be the wireless standard of choice for general use cases and 5G when guaranteed, reliable connectivity is needed. A proof point of this comes from this Deloitte study that found that 98% of businesses will use both technologies within three years.