Private Networks or Network Slicing for Enterprises

The fifth generation network (also referred to as 5G) represents an increasing and growing shift from consumer technologies to enterprise technologies. It is expected to revolutionize several sectors like agriculture, mining, transportation, logistics, education, health care, e-commerce etc. 

5G networks require huge investment for successful development and deployment. In fact, it has been predicted that mobile operators may slightly upgrade their 4G networks with 5G New Radio, in the first instance; and then subsequently upgrade fully to the 5G networks (with 5G core), in order to save cost.

Despite the buzz and shift by mobile operators from 4G to 5G, mobile voice calls have been on decline. Consumers are constantly uploading and downloading videos and other high consuming bandwidth applications, thanks to the rise and popularity of social media apps like Tik Tok, Snap chat, Instagram, Twitter, whatsapp, facebook etc. despite the growing usage, consumers are not willing to pay more for connectivity services.

Therefore, mobile operators seem more focused on enterprise solutions, from the launch of their 5G networks, in order to justify the huge investment required to develop 5G networks. Network slicing, a term which refers to the slicing of mobile networks into virtual slices, tailored to meet the specific needs of an enterprise and strictly meeting certain agreed service level agreements, has been touted as a technology which would help operators develop new business models that would meet the need of enterprises, serving as new revenue opportunities.

However, enterprises, who desire, and have the financial muscle, could acquire spectrum from regulators like the NCC and choose to build a private network for their operations. Several enterprises in developed countries have decided to follow this path; underlying motivations for this choice include security of their networks, guaranteed reliability, control, quality of service/experience etc.

If private networks become a popular route for enterprises, this would mean a reduction in the number of enterprises pursuing the network slicing commercial opportunity, which operators are targeting, to justify the return on the huge investment in 5G networks. The private network commercial opportunity could increase, as enterprises learn from those enterprises who have gone down this route; this could further squeeze operators’ margin. This is definitely a conundrum and may prove risky to operators looking to decide whether to invest in 5G networks or not.

This also means that enterprises would be looking to recruit and fill in positions, exclusive to mobile operators, so that they have the key personnel in-house to manage their connectivity solutions. Alternatively, enterprises could outsource such roles to mobile operators.

If you were an enterprise or work for an enterprise, what option would you prefer: your private network or a slice from an operator’s network? Could this option change in the future?