China to drive private 5G network growth despite regulatory headwind-- research

Private 5G networks are on the verge of taking off in a big way worldwide, with China leading the way, according to new research published this week.

While China’s sheer scale means it is often ahead of the pack where numbers are concerned, its leading position in 5G private network revenues is not clear cut due to regulatory issues in the market. Nonetheless, figures from RAN Research, an arm of Rethink Technology Research, put China ahead of other major regions as the growth curve kicks into life.

Private 5G networks will generate annual revenues of US$19.3 billion worldwide in 2027, up from $1.5 billion this year, according to a new report penned by Rethink analyst Caroline Gabriel. Growth will be at its fastest in the 2022-2025 period, peaking in 2027 and then declining towards the end of the decade as market saturation approaches, she notes.

By 2028 there will be 26.6 million private 5G networks deployed globally, a significant increase on the 1.1 million expected to be rolled out this year.

While growth will come in all regions, the report highlights four markets in particular that are leading the way with private 5G and will continue to do so: the US, Germany, China, and Japan.

China is the interesting one here. It may be leading the revenue charts, but there is strong regulatory resistance to private 5G, in no small part due to the market dominance of state-owned telco monopolies China Mobile, China Telecom and China Unicom. “[However,] strong upsurgence from the county’s enterprises, including government agencies as well as manufacturers, looks like opening up the country’s enterprise 5G field to rapid growth,” the report predicts.

Of course, it’s not just these major economies that will see extensive growth in private 5G networks in the coming years.

In most markets private networks will be deployed at a faster rate than overall 5G rollout, the report predicts. The combination of mobile networks with edge compute capabilities will open up a raft of new use cases for enterprises and new applications in areas such as manufacturing, drones, remote healthcare and transportation, RAN Research says, listing just a few.

However, there will be hurdles to be overcome. Chip shortages and other ongoing impacts of the Covid-19 pandemic will affect both private 5G networks and WiFi 6E – the new generation of WiFi that RAN Research predicts is set for a similar growth trajectory to private 5G – impeding growth to an extent in the short and medium-term. Equipment makers and service providers are all reporting slowdowns resulting from changed working practices during the pandemic and supply chain disruption, the firm points out.

“In the longer term though, 5G will enable much greater harmonization within the private network field generally,” the report concludes. “For some enterprises where blanket indoor coverage is established there will be more concerted migration from WiFi to cellular for private wireless communications. But unless such 5G coverage is almost ubiquitous, users will continue with WiFi and indeed penetration will increase around new best effort use cases.”

So while private 5G networks are certainly on the up, it is far from the end of the road for WiFi.