Verizon taps up Nokia for private 5G push

Verizon has teamed up with Nokia to support its mission to provide private 5G networks internationally.

Tuesday’s announcement marked the formal launch of the US operator’s international private 5G platform for enterprises in Europe and the Asia-Pacific. Verizon’s self-contained enterprise 5G networks will use Nokia’s Digital Automation Cloud and are geared towards large businesses with manufacturing, distribution and logistics facilities, Verizon said.

“Private wireless connectivity has become central to many industries in realizing their long-term digital transformation goals,” said Brian R. Fitzgerald, SVP Global Solutions at Nokia, in a statement. “By delivering private 5G together with Verizon, we’re paving the way to accelerate digitalization for the most demanding industries who crave reliable wireless connectivity.”

Meanwhile, Verizon Business CEO Tami Erwin added that, “private 5G networks will be a transformative technology that will drive the new era of disruption and innovation for enterprises around the world.”

Their confidence in the growing need for private 5G networks is not misplaced. The partnership announcement includes a comment from Martina Kurth, associate vice president of IDC’s European Telco Research practice, who noted that “international markets [are] moving rapidly to deploy 5G private networks,” describing these networks as “a major use case for the uptake of 5G.” And research from elsewhere in the industry also backs up their assertions.

ABI Research this week published a new prediction that private cellular network deployments within the enterprise domain will generate equipment revenues of more than US$64 billion by 2030. Admittedly, that figure does not relate only to 5G, but there’s clearly a massive market here.

“These numbers underline the huge momentum that we see for private cellular networks as a key enabler for enterprise digitization,” said Leo Gergs, Research Analyst for 5G Markets at ABI Research. “As enterprises require highly customized deployment solutions, including deterministic and time-sensitive networking, and are governed by strict regulations regarding data protection and network integrity, the deployment of a private cellular network will be their first choice,” he said.

Initial drivers of the market will be big enterprises, those with annual revenues in excess of $1 billion, because they have the financial muscle to pay for private networks. These large enterprises will account for 50% of the market in 2030, according to ABI Research. However, the analyst firm sees the appetite for private networking trickling down to smaller enterprises and forecasts that businesses in the $250 million-$1 billion turnover bracket will increase their share from 40% in 2030 to a greater proportion of the market in the years following.

There is a clear revenue opportunity for telcos in this mid-tier, if they get their offerings right.

“The telco industry needs to bid farewell to capex-intensive business models and develop opex-based offerings instead. Any such offering should adopt a service-based approach to give enterprise the reassurance of paying only for services they truly need. As a result, the telco industry should be prepared to sacrifice short-term gains for the tremendous opportunity that private cellular in the enterprise verticals domain will unlock in the long-term,” Gergs advises operators.

He also warns that network operators “need to evolve their business models fast” in order to retain a piece of the action, noting that they are under attack from the likes of  Amazon Webservices (AWS) and Microsoft Azure, who are  developing end-to-end solutions for enterprise connectivity, on one side and from specialist players using reserved spectrum to provide ‘as-as-service’ offerings on the other.

It is fair to say that Verizon is making a decent effort to secure itself a seat at the enterprise networking table. Earlier this week it announced a partnership with Microsoft, combining its on-site 5G Edge network with Microsoft Azure to provide low-latency to enterprises.

The pair paraded logistics and supply chain solutions company Ice Mobility as a reference customer. Ice Mobility is trialling Verizon’s  on-site 5G Edge platform, integrated with Microsoft Azure, using near-real-time data gather to address product packaging errors, thereby realising both quality and speed benefits.

In addition to the Microsoft deal, Verizon reminded the industry that it has also brokered multi-access edge computing (MEC) partnerships with Cisco, IBM and AWS.

Meanwhile, Verizon is not the only one eyeing up the private mobile networks opportunity.

Arch-rival AT&T on Monday revealed that it has inked a private cellular networking deal with Nokia that will enable it to offer the vendor’s Digital Automation Cloud and Modular Private Wireless Platforms to businesses in what it describes as Industry 4.0 environments, characterised by IoT, data and machine learning. Private network services will be based on AT&T’s US Citizens Broadband Radio Service (CBRS) spectrum. AT&T said the new private cellular solutions it is able to provide will expand its existing on-premises edge portfolio, which already includes 5G-capable MEC.

“There is reason to believe that ‘the fourth industrial revolution’ will remake industries and the economics of production,” Nokia quoted Grant Lenahan, Partner and Principal Analyst for Appledore Research, as saying. “Considering the majority of industrial site deployments will be based on private wireless, it’s prudent for communication service providers like AT&T to leverage Nokia’s proven private wireless solutions and vertical experience in the near future.”

Private networks are big news, and they’re only going to get bigger.