Private LTE: Opportunities and Challenges
By Pankaj Singh
Monday, May 20, 2019 | Comments
The increasing number of connected devices used in various businesses has created an ideal environment for the private Long Term Evolution (LTE) market because public networks cannot always ensure consistent connectivity and security for a large number of smart devices. The advent of network solutions customized and scaled down for enterprise use has allowed the evolution of industrial automation. Private 4G LTE networks can be critical for commercial workspace where there is a need to securely connect hundreds of people and machines. Such networks are configured to manage a wide range of physical infrastructure while delivering the low latency necessary for critical processes and seamless user experience, something public network Wi-Fi is not suitable for.

The gradual increase in the number of the internet of things (IoT) applications in manufacturing, energy, transportation and public safety has driven major corporations toward installing private LTE infrastructure as they realize the technology’s long-term benefits. BMW, for instance, recently installed a private LTE network at a plant in China. The network combines Nokia’s virtualized computing technology with China Unicom’s LTE service to enable smart manufacturing activities and remote monitoring. Separately, a port in Finland deployed a private LTE network to expedite the adoption of IoT and digitization of its processes.

Reliability and ease of operability are two key advantages fueling the private LTE industry expansion worldwide, as public broadband services tend to be easily disrupted and do not offer businesses total control over the network. Communications between personnel working heavy mining or lifting machinery at different locations and sharing vital business information become effortless via IoT modules on a private network. A report issued by Global Market Insights anticipates that the IoT modules-based private LTE market will register a remarkable compound annual growth rate (CAGR) of 28% from 2018 to 2024.

Private LTE in the Utility World
A prominent application of IoT during the past decade has been machine-to-machine (M2M) communications that connect devices throughout an organization’s network. The energy segment has also employed IoT for different purposes. The private LTE market has the potential to help utility companies efficiently manage power transmission and lower operational costs. Smart meters and other equipment, which are gaining momentum in an emerging era of smart power grids, can be connected to a utility’s network using wireless technology. A network operated by utilities could potentially cover several territories and involve various grids. A private 4G-based network could assist in simplifying utility communications.

Private LTE networks enable power suppliers to manage the grid and remotely monitor meters, minimizing the need for employees to conduct manual checkups because smart meters can send prompt notifications. Government regulations are also in favor of expanding smart grids because the share of renewable power in the overall energy mix is increasing. With these benefits in mind, Brazilian energy company Elektro announced plans to deploy a private LTE network that would connect the utility with its 75,000 consumers. The company will use the connectivity for monitoring smart meters to deliver increased power efficiency and cost cutting to customers.

In 2018, the Dutch government announced plans to install smart meters in every home in the Netherlands by 2020 to boost its IoT smart grid initiative. British Gas recently installed about 6 million smart meters. North America is also stepping up efforts to help save energy consumption. These cases demonstrate energy firms’ significant investment in improving efficiency and lowering the utility bills for consumers.

Because most utility firms around the world have accelerated infrastructure spending to manage power consumption and incorporate renewable energy, the private LTE industry should witness tremendous developments during the coming years. Another factor set to influence industry growth is the eventual rollout of 5G networks because most of the shared and unlicensed spectrum bands used for private LTE connections are suited for 5G technology. With the ultra-low latency and extremely high speeds offered by 5G, one can imagine the coming technology’s effective deployment in the energy segment for private LTE networks to manage vast, geographically challenging power grids.

The Challenges
Statistically, even though businesses in manufacturing, shipping and other key industry verticals are increasingly setting up private LTE networks, attaining the same results in low-income markets and developing countries is still a challenge. Many countries — some African nations, for example — are not yet able to match the scale of investment required to build a reliable connectivity infrastructure. However, in a few other regions, the main difficulty is overcoming the sheer size of the target market and the presence of numerous local players. In India, for example, there are more than 36 million micro, small and medium enterprises. Not all companies that require internet connectivity will invest in a private LTE network when less expensive broadband and Wi-Fi options are available.

Competitively, network operators AT&T, Airtel, Singtel and Verizon, among others, have strong positions in the LTE connectivity space in their respective markets. As such, it is expected that when the pace of the private LTE market picks up, there will be immense prospects for established network providers and hardware suppliers.

Up and coming players in the market will face a daunting task of seizing a notable market share because a few of the dominant network and equipment providers such as Verizon, Ericsson and Nokia have already taken progressive steps toward consolidating their position in the private LTE industry. They have, in fact, been rigorously testing LTE equipment. Major technology firms such as Google are exploring the potential of private LTE networks in hospitals and hotels, rendering the competitive landscape of the private LTE industry even more challenging. However, the potential challenges are only slated to escalate the commercialization potential of the private LTE market for decades to come, indicating that it could be interesting to witness a global tussle between market contenders that would eventually serve to expedite the expansion of private LTE networks.


Pankaj Singh, a writer at Global Market Insights, develops content for a variety of portals pertaining to market research. Email feedback to editor@RRMediaGroup.com.



 
 
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