Private cellular networks are at an inflection point akin to the early days of SDN and SD-WAN because it’s transforming how enterprises network, according to Donna Johnson, VP of marketing at Cradlepoint.
Wireless WAN doesn’t necessarily change the fundamental underlying technology, but “private cellular networks are really transforming the LAN and transforming the way people build networks, and to some extent, transforming the relationship that they have with their service providers in a way that hasn’t been seen maybe since the beginning of the SDN transformation,” she said.
There are multiple frameworks and models for private cellular networks, including those operated by carriers, others completely owned by enterprises, and networks that use 4G LTE or 5G as the connectivity layer. Private networks are still largely built on 4G LTE infrastructure, particularly for organizations that need to provide coverage across multiple square miles and don’t require the low latency or extremely high concentration of connected devices that 5G can support, Johnson said.
The earliest uses of 5G for private networks are occurring in large venues, airports, train stations, logistics, ports, and mines, especially among enterprises that don’t have access to a public 5G network, she explained. Most of Cradlepoint’s private 5G engagements today involve work with a carrier, but that should change when cost comes down and layers of complexity are removed, she added.
Private 5G Dominated By Carriers Today
“Typically it would be a carrier who’s potentially providing you the equipment, giving you their spectrum if need be, and so they’re setting it up on your behalf in a smaller geographic area,” Johnson said. “Private 5G is very much a relationship between a carrier often, equipment providers, such as ourselves, such as Ericsson, and the enterprise. Now, there are some cases where an enterprise might operate a private 5G network outside of the carrier. We’re just not seeing that much.”
Ericsson acquired Cradlepoint for $1.1 billion last year, and it remains an independent brand: a fully owned subsidiary with its own manufacturing, sales and marketing teams. Not much has changed from a technical or operations perspective since the deal was inked in September 2020, but the companies are identifying potentials areas for further integration, according to Johnson.
“We sell the user equipment, the CPE device. Ericsson sells the RAN and the infrastructure, and there’s some natural synergies between us. We have a large presence within enterprises. They have a large presence with carriers,” she said. “They bought us for what we do well, which is an edge device with wireless capability and our ability to sell directly to the enterprise.”
Most of Cradlepoint’s activities are in the private 4G LTE space today, but the lack of integrators that specialize in private cellular networks is limiting growth, Johnson said. “There’s not a single vendor that sells an end-to-end solution, so you’re still having to pull together different pieces. The technology is still somewhat new, so there’s definitely a technical barrier that people have to get over, and I think a year or two from now that will have gone away.”
Private Networks Still ‘Bit of a Niche’
5G, meanwhile, hasn’t reached the level of commoditization and simplicity that will push more enterprises to start building their own network, she added. “It’s still a bit of a niche. We’re by no means seeing the growth that we think we will eventually see in private cellular networks.”
Enterprise interest in private networks that don’t involve a carrier are growing as well, and that will accelerate as more integrators get into the space to make the network deployment and management processes more streamlined, Johnson said.
Cradlepoint is also receiving more inbound requests from enterprises that are exploring the use of private networks as a replacement for in-building WiFi, but Johnson said she’s still skeptical about the economics of that, at least insofar as things stand today.
Overall, she equates the rise of private networks to the beginning of SD-WAN where early customers had clear, strong needs and overcoming the initial technical challenges were worth the headaches because of the problems they needed to solve. Nowadays, of course, SD-WAN is pervasive.
“I think that private cellular networks are going to follow a similar thing. Right now we’re seeing it with companies who have a very well-defined need that’s not solved by other technologies,” Johnson said. “I think over time we might see it just become an alternative that people choose to deploy because of either its security or its cost.”
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