New niche markets in the connectivity business often are dominated by specialist providers rather than the tier-one mobile or fixed network service providers in any market. The reason is simple: by definition, a niche market does not represent the sales volume a large organization requires to enter and lead a business.
We can point to enterprise telephone systems, unified communications, consumer devices and software-defined wide area networks. In its early days, even digital subscriber line for home broadband was led by specialist firms.
Private 5G networks and private 4G might well wind up being that sort of thing.
To be sure, some forecasts of private 4G and private 5G networks are robust. And there are firms that sell infrastructure, services or software supporting such networks for whom private networks will be a substantial revenue source.
Kaleigo Intelligence forecasts about $7 billion in non-public private networks using either 4G or 5G infrastructure by 2026.
That market will be especially important for a segment of the networking infrastructure industry able to support the building and operating of such networks in a variety of settings where assured bandwidth and latency performance could improve on what is possible using Wi-Fi, for example.
That noted, private 5G networks might wind up being a niche that is quite important for specialists, but not so significant for some possible suppliers. A good chunk of that $7 billion will be spent on infrastructure to build the networks. Another good amount will be spent on system integration, consulting and other costs such as spectrum rights.
In some cases revenue will flow to mobile service providers who build such networks on behalf of customers. But other system integrators might well emerge as more-important providers, especially since application support will matter and many large system integrators have existing practices that support customers in vertical industries.
Ability to engineer and build the actual private network is important, but secondary to the task of ensuring the key applications work. And that tends to be a domain better suited for larger integrators with historic relationships with enterprise customers at the application level.
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