A few weeks ago, the industry trade body representing the interests of the world’s mobile operator community, the GSMA, released a report looking at the impact of global regulators offering enterprises spectrum for the creation of private 4G and 5G networks. So called ‘set aside’ spectrum, according to the European 5G Observatory, is now available, or will be made available, to enterprises in the U.S., UK, Germany, France, the Netherlands, Sweden, Japan, Australia and Hong Kong. Regulators in these countries have a clear mandate to distribute radio spectrum as widely as possible, partly to raise revenue via auctions, but also to promote broadscale adoption of mobile broadband technology – a central driver of GDP for global economies.
The prospect of 5G availability across public and private networks has exciting potential for accelerating global growth in GDP. This does not purely apply to consumer enhanced mobile broadband connectivity, but spans exciting enterprise use cases across a range of vertical markets. Many of these use cases demand peak 5G performance – the lowest levels of latency, the highest levels of availability, the tightest levels of security and the most reliable and dedicated areas of coverage. The truth is, that many enterprises require 5G guarantees that operators won’t be able to deliver, leaving many with no other option than to build their own networks.
The operator-led spectrum monopoly is over
Historically, licensed mobile operators have enjoyed a monopoly when it comes to the acquisition of radio spectrum for mobile networks. Domestic operators in each country have bid against each other to secure the bands that support their future growth strategies. Each operator has then been mandated by their regulator, relative to how much spectrum they acquire, to guarantee the fulfillment of national coverage goals by a set timeframe. How an operator chooses to achieve these goals, and where they place their sites, is up to them. Network economics always dictate that mobile coverage is targeted in densely populated areas, where paying users are guaranteed, thus providing a return on their spectrum investments.
Targeting spectrum resource at densely populated areas makes commercial sense, but it also restricts network capacity across supporting cells. Spectrum, after all, is a finite resource and it has limits in terms of the users and data sessions it can support. While 5G networks offer greater capacity than 4G networks, whether enterprises have access to the bandwidth and connectivity they need will still likely be determined by where its facilities are located.
Even if an enterprise does have access to the necessary coverage and capacity, does it enjoy the same levels of control and security over them as it could if it had its own network? The coverage and capacity afforded by private networks can be dedicated to specific applications or individuals – on an hour-by-hour, or even a second-by-second basis. Enterprises can control their own radios to ensure reliability and minimize latency. They can also ensure that information collated and processed by their own applications and systems doesn’t leave their premises – a fundamental concern for sensitive, mission-critical use cases. The enterprise via their SI partner can also set appropriate levels of service to their business, ensuring service continuity or rapid restoration should a component fail.
Operators raising concerns
Understandably, the operators would prefer for regulators not to set aside spectrum for the use of private networks. After all, every enterprise that builds its own network is one less potential operator customer. The GSMA argues that allocating spectrum to enterprises creates spectrum scarcity and drive up prices that, in turn, will make 5G coverage patchier and reduce available speeds across public networks. All of this, the GSMA adds, will impact 5G uptake overall.
The reality is, however, that perfect mobile broadband service does not exist today, despite mobile operators having a monopoly on spectrum usage for such a long time. Mobile coverage is patchy in certain areas of all countries. Network speeds are always impacted by overall congestion and prices paid for spectrum have been in decline since the eye-watering rates paid for 3G spectrum at the turn of the millennium.
5G brings healthy demand for private networks
Competition for 5G spectrum is going to intensify for operators over the coming years. Regulators want to offer wider choice in terms of how mobile broadband connectivity is leveraged for new levels of efficiency and productivity. Private 5G networks, in time, will offer the low latency capabilities needed to automate robotic manufacturing, support remote surgery in hospitals, or even enable the commercial availability of autonomous vehicles. Mobile operators, too, will offer these capabilities, but they won’t be able to match the same levels of coverage and capacity allocation, network reliability or data security that they could achieve by building their own networks.
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