How Much Mobile Operator Success in 5G Private Networking?

How much revenue upside and value might mobile operators be able to create from 5G private networks? Some, but not as much as some might help, if history serves as a guide. The distinction between public wide area networks and private local area networks always has created leadership by different firms, and types of firms.

Simply put, local area networking has not been a core competency for public network service providers, nor does private networking tend to offer opportunities to achieve scale. Third parties are the low cost providers in the local networking business, making success a difficult proposition for higher-cost public connectivity providers unable to take advantage of economies of scale in private networks.

Private 5G networks, 5G fixed wireless, internet of things networks and large-venue 5G tend to share a characteristic in varying degrees: they shift the focus of connectivity from outdoors to indoors, wide area to local area, public network to private network, recurring connectivity revenue to equipment purchases.

So infrastructure sales will tend to shift a bit to private networks, a trend we now have seen embraced by a growing number of public network suppliers--including Samsung, Nokia and Ericsson--as well as emerging radio infrastructure suppliers. That means suppliers of public network infrastructure increasingly expect to be selling directly to enterprise end users, and not only to service providers.

source: Real Wireless 

What remains unclear is how the support infrastructure will develop. Some mobile operators likely will set up dedicated indoor networking units to design, build and support private 5G networks for enterprises. If history is any guide, most mobile operators will not have a sustainable business case serving anything but the largest enterprise venues or customers. 

Telcos have not managed to develop sustainable revenue models for indoor, private networking. Instead, interconnect firms (voice), system integrators, value-added distributors and other LAN specialists (data networking) have emerged to design, build and support premises networks. 

So third party specialists also will emerge, in all likelihood, particularly among the ranks of firms that historically support premises networking.