This is a point worth pondering:
So-called private networks are sold on the promise that they provide companies with more secure and higher quality connections, which offer fewer delays and glitches than conventional WiFi networks.
European telecoms companies have spent billions upgrading their networks from fourth generation technology to 5G over the past decade, including replacing legacy copper infrastructure with fibre optic lines, but have so far struggled to get customers to pay significantly more.
Traditional telecom networks were saddled with copper networks, something expensive to replace. It is not the capital required to change the network in premises, but to obtain the “right of way” for digging up and laying fibre optic cables.
I am not sure how private networks or network slicing are different, but in India, the regulator believes it will be tantamount to flouting net neutrality:
Slicing effectively means giving preferential or differential treatment to a select set of customers in terms of cost or speed. However, the move would breach the government’s net neutrality rules that do not permit such experiences. Carriers may therefore seek regulatory intervention to carve out or exempt services for, say, business-to-business connections or those provided to enterprises to offer high-speed, lower-latency services, said industry experts.
Carriers have no pressing arguments for 5G, currently. It’s sunk capex and given the restrictions on Chinese equipment, will only lead to incremental expenses pushed to consumers.
Media reports suggest that the top three private telcos, Reliance Jio, Bharti Airtel and Vodafone Idea, have indicated to the government that their participation in the forthcoming 5G spectrum auctions will be muted unless and until the Government ensures that the spectrum will not be handed to enterprises for setting up 5G private networks.
Private enterprises like Amazon are pushing through their own local deployments without obtaining licenses for public service. It is relatively easy to set up an “edge-server” and avoid the hassle of dealing with irate customers being “over-billed”. Enterprises will instead tie up long-term contracts for industrial automation.
Again from FT:
Last week, BT announced that over the next three years it would invest £100mn in Division X to advance the creation and adoption of new technologies, like the internet of things, 5G private networks and edge computing.
These tie ups will defray costs, to some extent.