Hyperscalers at the forefront of telecom operators in the challenges of private networks

The rapid adoption and future lucrative potential of LTE and 5G private networks were clearly demonstrated throughout the year, first by market analysts and then by a growing number of deployments around the world. In terms of the people who facilitate such infrastructures, it is the cloud giants that customers turn to rather than telecom operators, according to an Omdia study.

This is one of the key findings of the market analyst’s annual survey of companies that use, test, or plan to deploy private LTE and 5G networks in six key verticals – the LTE and 5G Private Network Companies Survey Snapshot – 2021. A total of 451 respondents from seven countries participated in the survey.

Perhaps indicating why hyperscalers are most successful, the study found that two-thirds of companies require private network providers to demonstrate integration with their existing cloud platform before purchasing. Similar requirements apply to the enterprise Internet of Things (IoT) and application management platforms.

Microsoft is the world’s most innovative private network provider, according to companies already using an LTE and 5G private network. AT&T and Deutsche Telekom have also been named as industry pioneers.

“Businesses have needs beyond connectivity when purchasing a private network,” said Pablo Tomasi, Omdia’s senior analyst for private networks. “The two main reasons companies invest in private networks are better security and digital transformation. They need partners who can meet these needs. Telecom operators can lose out if they don’t step up.

Companies also want the results of their investments in private networks to be achieved quickly. Just over half (55%) of companies expected a return on investment from their private network in two years, but almost a fifth of those already deployed predict a return on investment in just one year.

And consumer preferences are changing rapidly: Three-quarters of companies now planning a private network prefer a hybrid model over the fully-dedicated private networks that currently dominate 70% of deployments.

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