AT&T eyes high-end of 5G private networks amid competition

Some communications service providers (CSPs) are focusing on the higher end of the 5G mobile private networks (MPNs) market to differentiate their offerings amid growing competition.

A new study from Juniper Research has ranked Nokia, Ericsson and Druid Software as 2021’s leaders in the private networks market. The report, Private Cellular Networks: Spectrum Assessment, Business Models & Forecasts 2021-2026, found that traditional cellular network operators are often behind in the rollout of private network capabilities, which has allowed other providers to step into the role.

[Image source: Juniper Research]

So where does this leave CSPs, particularly as the competition to provide 5G MPNs grows to include hyperscalers such as Amazon Web Services (AWS)?

When asked about AWS’ move into private 5G networks at the recent UBS Global TMT conference, John T. Stankey, CEO, President & Director of AT&T said he saw his company and hyperscalers such as AWS addressing different requirements. AWS, he believes, is well placed to meet demand for a relatively simple 5G network product that outstrips Wi-Fi performance, while AT&T focuses on complex deployments for large enterprise customers.

“If you're running a hyperscale business and you want workloads, there's going to be some meaningful workloads that come back in,” he said. “And for them to be able to mimic some of the capabilities that we have back in our core and offer companies that want maybe a lower budget, a more contained approach or a solution to that, they've kind of built it in a box for them," explained Stankey.

"I think the offer they're bringing in [is] for a fairly straightforward simple business, noncomplex environment, not multiple locations, not having to worry about devices that maybe necessarily leave the four walls of a building.”

And that’s currently not a segment that AT&T serves.

“In that regard, they're solving the market problem. I don't think we have a scaled enough and simple enough offer in that space right now at this point,” said Stankey.

Instead AT&T’s focus is on large enterprises with multiple locations that need to move between private and public networks, according to Stankey, who cites opportunities in healthcare and manufacturing.

“As we get up the learning curve on that and as we equip the network to be able to do things differently, can we begin to move down market and offer more economical solutions that might meet the needs of the similar area where Amazon is trying to play? It's possible. But right now, we've got our hands full ... at the upper end of the market.”

Speaking during Telecom TV’s Great Telco Debate, Francesca Serravalle, Technology Director, Colt Technology, said there is “still a great opportunity on the connectivity side” for CSPs. Just how big, she explained, will depend on their business strategy and “how far service providers are in their network transformation”. This includes whether they have implemented software-defined networks (SDN) and network functions virtualization (NFV) for on-demand provisioning of network resources and functions, and whether they can deliver dynamic SLAs or have innovative partner programs.

Phil Skipper, Head of IOT Business Development, Vodafone Business, was among the speakers at the Telecom TV event to underscore how CSPs could help deliver the operational benefits of 5G.

“You have to stop treating private networks as a technology because they're an operational asset. It's something that organizations rely on to deliver their manufacturing output,” said Skipper.

“If the power goes off, the factory stops; if the connectivity goes off, the factory stops.”

He sees opportunities in managing operational networks within a connected Industry 4.0 ecosystem that extends out to the customer. “We can operate private networks over both public slices, as well as on site,” pointed out Skipper.

“It's running them for the next 5-10 years in a complex environment where things are changing,” he said, pointing to Vodafone’s contract with Ford. “I think CSPs are well placed because their expertise is in managing these networks.”

However, Richard Band, Head of Mobile Core and 5G, Communications Technology Group, Hewlett Packard Enterprise, who was speaking on the same panel, cautioned CSPs against complacency. “Ultimately, people are not buying connectivity. They're buying the business outcomes,” said Band. “So far CSPs have done a good job of selling connectivity. But when I look at…the way that they've introduced 5G, for the most part I see CSPs doing business as usual. And I truly believe that they need to change.”

For example, Band believes CSPs needs to acquire greater industry vertical knowledge through an ecosystem of partners that co-develop solutions. However, he said: “This is a big challenge and there's still a lot of transformation to be done by the CSPs.

“I do believe that the majority of enterprises will prefer to have a managed service,” said Band, who sees significant opportunities. “But it won't automatically be the CSP,” he warns, adding: “CSPs have to up their game in order to be successful.”