The shine begins to wear off 5G private wireless

Verizon had high hopes for private wireless networking. The company had predicted that by now it would be well on its way to making billions of dollars from the sale of custom 4G and 5G networks dedicated exclusively to its enterprise customers.

Indeed, during 2021 Verizon execs pegged the total addressable market for private wireless at around $7 billion to $8 billion by 2025, according to FierceWireless.

But that’s not how things have played out.

“A couple of areas where we are behind versus our expectation [are] the mobile edge compute and 5G private networks,” Verizon CFO Matt Ellis said last month during Verizon’s quarterly earnings call. “You’re talking about the technology adoption there on a new technology. The adoption curve [is] a little slower than maybe we would have liked.”

As a result, Verizon was forced to lower some of its financial targets for 2023.

But Verizon isn’t alone. Other network operators have also been hoping for massive revenues from private wireless yet are struggling to make progress.

“Regarding private wireless, we agree that it is taking a bit longer than some had expected to move above the noise,” wrote analyst Stefan Pongratz, of research and consulting firm Dell’Oro Group, in response to questions from Light Reading. He said revenues from private wireless 4G and 5G networks accounted for less than 1% of the overall radio access network (RAN) market in 2022.

Here we go again

According to one top AT&T executive, we’ve been here before.

“Private LTE, when it came on the scene, there was a lot of hype and anticipation that it was going to explode,” explained Chris Sambar, AT&T’s networking chief, during a recent call with the media. “A lot of that did not come to fruition.”

Sambar said that in the early days of 4G LTE, network operators, equipment vendors and others hoped to entice businesses and other enterprise customers to purchase their own mobile network infrastructure in order to provide faster and more secure connections to their workforces.

“But at the end of the day, a business looking to put their own private 5G or LTE mobile network into their business, it’s an expensive value proposition for a customer,” Sambar explained. “They’ve got to be willing to either completely insource everything and run a mobile network and run a core network, and manage the edges of those networks and how they often interact with the public Internet … or they need to insource some of it and piece out other parts of it. It’s complicated and expensive.”

To read the complete article, visit Light Reading.