Cellnex picks up private 5G deal in automotive space

Cellnex has inked another deal to roll out a private 5G network for an enterprise customer, this one marking its entry into the automotive sector.

The fast-growing neutral host company will deploy a private 5G network for engineering group Segula Technologies at its test centre in Rodgau-Dudenhofen, Germany. The pair are talking up the usual advantages of private 5G, namely low latency, dedicated spectrum, enhanced security and so forth. These attributes will help Segula serve its car manufacturing customers and tier one suppliers, they said.

This is a valuable deal for Cellnex. Naturally, we can’t put an actual figure on it, but it forms part of a broader push by the firm, which was once thought of as exclusively a towers company, into the neutral host market, where – to be blunt about it – it is essentially eating the mobile operators’ lunch.

We have heard so much from mobile operators about the opportunities 5G affords, beyond the provision of ever-increasing data packages to smartphone users. The enterprise space in particular could be a money-spinner, but when it comes to private 5G networks, the telcos are not taking the impetus, leaving the market to others, including the big equipment makers and alternative service providers.

Cellnex’s Edzcom business, which will deliver the Segula contract, falls into the latter category, as a specialist provider of private networks and edge connectivity.

Cellnex acquired Edzcom almost two years ago and has wasted no time in using the firm to its advantage in the private networks space. In November, for example, it picked up a 5G private network deal in the UK, covering Basingstoke’s central business district.

And earlier this week Cellnex announced plans to open three new offices in the UK – two in England, one in Scotland – to support its growing business in this market. Admittedly, that probably has as much or more to do with the acquisition of a raft of UK towers through the CK Hutchison deal, which finally passed regulatory scrutiny this week, than it does the private networks business, but the point remains: Cellnex’s growth spurt shows no sign of coming to an end.

Indeed, Cellnex describes the deal with Segula as forming part of a partnership, a collaboration between them, terminology that is fast-becoming the norm in vendor-customer announcements in this industry. However, there is likely more to it than a simple choice of words; Cellnex wants a slice of the fast-changing automotive sector and working with Segula will help it secure that.

“Vehicles are becoming the new smartphones and in response, car manufacturers will require new skill sets to stay competitive,” said Oscar Pallarols, Global Commercial Director at Cellnex Telecom, highlighting the two major disruptions the sector is facing: digitalisation and vehicle electrification.

“Working together with Segula Technologies is a win for both companies as Segula Technologies operates globally and is an expert in vehicle engineering and testing, while Cellnex Telecom is a specialist in 5G, providing high-performance connectivity layers,” he said. Meanwhile, Cellnex describes the deal as “a valuable opportunity” for it to get into the connected vehicles space.

“The most important thing to consider when investing in innovation is the potential for scalability that can be realized in the future,” added  Mikko Uusitalo, Global Director of Mission Critical & Private Networks at Cellnex Telecom. “As this collaboration revolves around Automotive Industry, we can deploy successful innovations many times over. This is scalable and key to our business, which in the end benefits the whole ecosystem – Cellnex, Segula Technologies and customers.”

All of which suggests there will be more private 5G deals to come from Cellnex before too long.