Private networks are still an emerging market and many players offering vertical-specific solutions or specialized services are entering the space to grab a piece of the pie. There is a vast selection of vendors offering small-cell, LTE and 5G hardware as well as end-to-end easy-to-deploy solutions.

MNOs also view private networks as a growth opportunity against the backdrop of stagnating revenues from the consumer segment. After all, revenue diversification is need of the hour! Many operators have forged partnerships with vendors either to develop private network solutions or collaborate on network deployment.

Tier-1 operator-vendor partnerships

We studied a selection of Tier-1 operators and their private network go-to-market strategies. These strategies can be broadly categorized as “offer spectrum and private network solutions in partnership with vendors” and “offer only managed services to enterprises with their own spectrum”.

MNO-Equipment Vendor Partnerships

These partnerships may also differ from one another as some of them may be aimed at co-developing industrial use cases or combining hardware and software with the operator’s assets, while others may be formed to act as global marketing partners. At times, these partnerships evolve as a result of long-term relationships for public networks. Some examples to help understand these dynamics:

• BT and Ericsson, which had partnered in the past to build the UK and Ireland’s first private 5G network for ports at Belfast Harbour, signed a multi-million-pound deal in May 2022 to provide commercial private 5G for the UK market. The partnership combines the operator’s expertise in building converged fixed and mobile networks with the vendor’s network technology and enterprise solutions.
• AT&T offers private enterprise network solutions with Nokia and Ericsson using CBRS spectrum in the US. On the other hand, Verizon has partnered with Nokia to market private 5G for international customers, mainly in Europe and Asia-Pacific.
• Deutsche Telekom and Ericsson have recently partnered for a new 5G standalone (SA) campus network offering. Ericsson provides the required modern 5G SA technology, while the operator looks after planning, deployment, operation, maintenance as well as optimization.

So, what do operators gain?

Many operators and vendors partner to co-develop private network solutions. A pre-packaged or end-to-end solution offering allows operators to reach a wider set of enterprises, especially small and medium businesses. They are better placed to sell a predefined solution as compared to the one with a high degree of complex customization, which at times makes it difficult for the enterprise to understand the business rationale in respect of investments.

Also, partnerships help operators increase their outreach across the ecosystem and gain access to new markets.

Takeaways

Since MNOs lack the specialized knowledge to target a large swathe of vertical markets, they should focus and prioritize their resources on three or four broad verticals. In order to profit from the enterprise sector, Counterpoint Research believes, operators need to invest in and partner with numerous vertical-focused companies. For every single vertical, and even some use cases within those verticals, a distinct set of partners will be required.

The success of operators may well depend on how willing they are to scale down, i.e. extend their reach into smaller organizations, verticals and sub-verticals. For many of these use cases, operators may not offer spectrum but provide network support services. For instance, Vodafone Germany and Lufthansa Technik launched a private 5G network in Hamburg based on standalone technology. The operator does not own the spectrum used to provide the connectivity but takes on the role of technology and service partner to support the deployment and operation of the private network.

It is important to acknowledge that although operators are set to gain by collaborating with various vendors, the same set of vendors may also be viewed as competition, especially in markets with enterprises having direct access to spectrum to set up private networks. We will be looking at this perspective in an upcoming blog. Stay tuned!

Related Reading

• Strategic Partnerships Tap Expanding Private Network Market Opportunities
• Nokia and Kyndryl Partner To Target Campus Wireless Market
• Podcast #54: Private Networks – What are the Key Trends, Market Drivers, & Challenges
• Private Networks Tracker, May 2022
• Private Networks – High Expectations Amid An Expanding Ecosystem