Sizing the addressable market for MPNs

Forecasting the size of the market for private LTE and 5G mobile networks is completely different than estimating the market for consumer services, because businesses’ requirements vary widely and predicting average revenue per enterprise is extremely difficult. This excerpt from our new report Mobile Private Networks: Exploring the CSP opportunity looks at how today’s mobile private network (MPN) market is taking shape.

The market for MPNs must take into account the number of companies building them and in which segments, the size or coverage of the networks, and the technology purchased to build them.

Determining the portion of the market that mobile operators have an opportunity to address is even trickier. They are not able to provide service everywhere globally, for example, and their roles can vary considerably based on type of network and whether they operate or manage the network for the enterprise. In addition, many MPNs are being built to enable specific applications, with connectivity representing only a small part of the total value proposition. All that said, a few highly promising market segments for MPNs are emerging, which helps in identifying the total addressable market for communications service providers (CSPs).

• Ports – shipping news provider Lloyds List tracks more than 2,900 commercial ports globally. Large ports in Belgium, the Netherlands, the US and the UK are already trialling or deploying MPNs. As they integrate the networks into their core operations, affordable solutions will begin to emerge that smaller ports will be able to buy.


• Airports – there are more than 40,000 airports worldwide, and most already have dedicated WiFi networks. As these networks are upgraded, many airports are likely to add private 4G or 5G networks for internal operations.


• Mining – The top 40 mining companies in the world each operate between five and 40 mines. Also included in this category are oil and gas fields, which number more than 4,000 worldwide. The remote location of mines coupled with their sheer size makes them a key market for MPNs. There are already commercial network deployments in Russia, China and North America in mines producing copper, coal, gold and iron ore.


• Manufacturing – Many of the earliest MPN deployments have been in manufacturing, particularly the automotive industry but also in components for home appliances and aircraft. There are more than 500 automotive manufacturing facilities worldwide. As they are improved and new plants are opened (to produce electronic vehicles, for example), many will choose to adopt 5G as an alternative to fixed broadband connectivity.


• Utilities – utility companies provide electricity, natural gas, water and sewage services for residential and business customers. It is a huge sector with the world’s 10 largest publicly-traded utility companies each posting annual revenues of between $30 billion and $80 billion. Opportunities for MPNs stem primarily from the changing dynamics in the electricity sector, especially as companies develop smart grids.


• Education – the business case for deploying MPNs in universities and other educational establishments is less proven than in other sectors such as ports or automotive manufacturing. However, education is likely to become an important market for MPNs, given the size of many campuses, the importance of high-speed connectivity, and the prominence of R&D and technological innovation in educational settings. Various estimates put the total number of colleges and universities worldwide between 25,000 and 40,000, while the Times Higher Education ranks 1,400 research-intensive universities in 92 countries.

Setting a baseline

Several research firms are tracking MPNs. Omdia has cited 158 network rollouts since 2016 and a further 306 trials, while Analysys Mason has identified 156 commercial MPN deployments. Based on this data, it is reasonable to estimate that there are more than 500 MPNs in operation today. However, many are still trials and others are likely indoor MPNs, where there is crossover with distributed antenna system networks, which represent a separate but related market. There is huge variation in the value of MPN deals which includes the upfront revenue from building and supplying the network. According to vendors we spoke to as part of our research, the smallest deals are valued at well under $100,000. An average deal size is, perhaps, five times this figure.

However, it is important to note that initial MPN deals may only be for specific, limited applications and coverage areas. A deal initially worth $100,000 could become several times more valuable once other use cases are identified. As a result of our research, we estimate that the MPN market in 2020 was worth between $250 million and $500 million.

Many research firms are forecasting strong growth for MPNs. For example, Omdia estimates that the market was worth $1 billion in 2020 and that this figure will rise to $5.2 billion by 2025. Forecasts can vary widely if they include the upfront value of the deal rather than revenue in any particular year. Also, in many cases MPNs are trials or proofs of concept, so the value will remain unclear until the trial is converted into a commercial deal. Today, most MPN revenue is going to the vendors of RAN and core networks, meaning traditional network equipment vendors, with emerging specialist suppliers also standing to profit.

Based on our research, at least half of these MPNs are being fronted by operators whose revenues will vary depending on their role in managing and operating the networks. Some CSPs also have their own projections for the value of the market. Sampath Sowmayanarayan, Chief Revenue Officer at Verizon Business, estimates that the total addressable MPN market will be between $7 billion and $8 billion by 2025, evenly divided between the US and the rest of the world.