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Internet of Things September 2020 Viewpoints

Technology Analyst: David Strachan-Olson

Private 5G Networks

Why is this topic significant?

Private 5G networks could provide a robust communication network for Industrial Internet of Things and other enterprise applications.

Description

Typically, cellular companies operate networks that provide service to a large number of clients and customers. With the emergence of 5G, large organizations are considering implementing their own private 5G networks within factories, facilities, and corporate complexes. Although a company might partner or consult with a cellular carrier for equipment, installation, and support, the company controls the network and the way it operates.

One major interest for companies exploring the use of 5G networks is in leveraging the potential advantages of 5G—including high reliability, low latency, and high connection density—to support Industrial Internet of Things (IIoT) deployments. The 5G-SMART program, which is part of the European Union's Horizon 2020 research program, aims to explore and test the use of a range of 5G technologies in three industrial facilities in Europe. The facilities include a Bosch semiconductor factory in Germany, an Ericsson factory in Sweden, and a Fraunhofer Institute for Production shop floor in Germany.

Many other companies have also expressed interest in private 5G networks. BASF, Bosch, BMW, Daimler, Siemens, and Volkswagen have all expressed various intentions to build private 5G networks at their facilities in Germany. Vodafone is building a private 5G network for Centrica Storage, an oil-and-gas company in the United Kingdom. Nokia recently launched a 5G stand-alone industrial-grade private networking solution and claims that it has already tested 30 private 5G deployments.

Implications

Although some companies have previously leveraged LTE (Long-Term-Evolution) networking technology to create private networks, the practice was not common. With the development of 5G and the IIoT, the practice of private cellular networks is poised to become much more common. 5G represents a large umbrella of technologies and protocols that can provide many advantages in comparison with what LTE networks can potentially provide—including much higher reliability (developers aim to provide a successful connection 99.999% of the time), low latency (a few milliseconds within networks), and the ability to support dense device deployments with tens of thousands of devices on a network. Stakeholder interest in IIoT is also very high, with industrial companies planning to install orders of magnitude more sensors in the next ten years than they installed in the previous decade. Wired connections are too costly and complex for a large number of devices, and other wireless-communication standards, such as Wi-Fi, do not provide the same features and capabilities that some 5G technologies provide.

Impacts/Disruptions

Private 5G networks in industrial facilities and corporate campuses could become the norm in the next ten years. Initially, governments might limit private 5G networks to specific low- and midband 5G frequencies. Germany has made 3.7 to 3.8 gigahertz (GHz) available for private 5G services. In time, private 5G deployments will likely use high-band 5G frequencies, which provide high data throughput with a low risk of interference to consumer cellular networks because of the short signal range. In Japan, Fujitsu recently received a license in the 28.2-to-28.3 GHz range.

Demand for 5G technologies from industrial players is likely to remain high. In the near term, the industrial 5G market could prove to be more important for cellular providers and 5G hardware suppliers than the consumer 5G market.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 10 Years

Opportunities in the following industry areas:

Mobile communications services, network-equipment manufacturers, managed services, corporate IT, edge computing, smart manufacturing, logistics, chemical and materials producers, oil-and-gas producers, municipalities, armed forces

Relevant to the following Explorer Technology Areas:

Demand Factors: Industrial and Infrastructure

Why is this topic significant?

Demand from industrial and infrastructure applications will play a key role in the commercial development of the Internet of Things.

Demand for Industrial IoT

  • Enhanced supply-chain management. Internet of Things (IoT) technologies offer increased supply-chain transparency, with self-reporting containers or individual products. More information about goods' location could enable greater flexibility for companies' supply chains, reducing the need for warehousing and making stock control more dynamic than it is today.
  • Predictive maintenance. Advanced data analysis from sensors can indicate developing problems with equipment before problems arise—enabling companies to repair and maintain equipment proactively instead of waiting for components to fail, potentially causing additional damage. Predictive maintenance also enables more efficient spare-parts use and enables companies a greater level of control over machine downtime.
  • Performance optimization. The IoT enables various parts of a company's operations to act in a coordinated fashion. Combining an abundance of sensor input with advanced analytics can enable companies to optimize operations through previously unidentified efficiencies.
  • Process automation. IoT systems can offer real-time remote monitoring for manufacturing and other processes. When IoT systems are in use in conjunction with enhanced supply-chain transparency, robotics, and other emerging industrial technologies such as 3D printing, large parts of industrial operations could be largely or entirely automated.

Demand for Smart Infrastructure

  • Smart grids. Both a rise in renewable-energy sources and an increasing capacity for private energy generation, such as with rooftop solar panels, serve to complicate the process of managing energy grids. Centralized generation and distribution networks are ill equipped to balance the supply and demand needs of next-generation power supplies. So-called smart grids use a combination of energy storage, smart meters, and distributed-energy generation to respond dynamically to changes in supply and demand. At the extreme end, this use also enables micro grids, which generate and consume the majority of electricity locally.
  • Public-infrastructure initiatives. Cities, metropolitan areas, and countries may start initiatives and provide funding for deploying smart infrastructure technology in order to solve a variety of challenges, such as traffic management, public transport, crime prevention, air-pollution monitoring, and emergency services. These initiatives could provide an opportunity for companies in the form of new public-private partnerships. Without enthusiasm and support from government officials, companies will likely have difficulty in deploying smart-city IoT technologies. However, companies might be able to develop ad hoc solutions for some specific applications without government support.
  • Advances in autonomous vehicles. Several companies are developing autonomous vehicles. At present, most of these designs assume that a self-driving car must operate as a stand-alone device. However, autonomous cars could also enable novel approaches to traffic management. Smooth interfaces between vehicles and infrastructure will enable advanced traffic-light coordination, tidal-flow systems, and dynamic speed limits in order to optimize traffic flow and safety.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 15 Years

Opportunities in the following industry areas:

Smart manufacturing, logistics, warehousing, chemical and materials producers, oil-and-gas producers, smart cities, municipalities, utilities

Relevant to the following Explorer Technology Areas: