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The growing interest in private LTE is an important trend for 2019. It is closely linked to the burgeoning Industrial Internet of Things (IIoT) market, since private LTE is being touted as a solution for the manufacturing sector, as well as for many "campus"-type environments with complex communications requirements. Ports and mines are also proving popular sites for private LTE, given their coverage and mobility requirements and the need for high levels of reliability and support for a mix of different types of communications. In addition, private LTE is seen as a way to prime customers for 5G IoT use cases in the manufacturing environment as well as other industrial and transport settings.

Private LTE is being heavily promoted by infrastructure vendors. Vendors point to the need for flexible, reconfigurable industrial networks as a driver for wireless private network demand – fixed communications infrastructure in a factory site can make reconfiguring equipment and processes both costly and slow. Industrial customers are also looking for the ability to meet service-level agreements (SLAs) for very low latency connectivity and ultra-reliability, even in areas that may be poorly served by existing cellular coverage. Private LTE can meet this need today; going forward, 5G network slicing capabilities and low-power wide-area networks (LPWAN) will play a role.

Nokia and Ericsson are both presenting deployment examples as a way to establish customer and partner confidence in both the general proposition and their own capabilities. Nokia's private LTE–based "Port 4.0" deployment with Finland's Port of HaminaKotka is one example; Nokia also cites deployments for Helsinki's airport and for mining operator Sandvik. Its Future X architecture is geared to industrial networks, both private and hybrid. IoT solutions are a key part of the proposition, from predictive maintenance and robotic arms to autonomous vehicles within the factory campus.

Ericsson has delivered a private LTE network for US energy utility Southern Company, as well as for an autonomous vehicle "lab" pilot in Rouen, France. Ericsson is carefully positioning itself as a partner to communications service providers (CSPs) in this space, rather than a competitor. The vendor has just launched a new product, Industry Connect, specifically aimed at giving operators "private-network-in-a-box" capabilities to deliver the proposition to midsized industrial customers. Nokia has taken a slight different approach, and while it does partner with CSPs on private networks, it is also reaching out directly to enterprises on its own.

CSPs are also starting to recognize the importance of the private LTE opportunity as a way to drive IoT and other revenues, despite their historical resistance to private networks. Ericsson reports that the majority of operators it has spoken with in the past 12 months are developing private LTE propositions. Private networks are being explicitly highlighted by Telefonica (working in partnership with Ericsson) as a 2019 opportunity it is pursuing, among others. Deutsche Telekom is partnering with Nokia for 5G network slicing trials in a private deployment at the Port of Hamburg site. Private LTE operators are also starting to emerge in some markets. Nokia is working with private LTE provider Ukkoverkot on its deployments in Finland, for example.

Is the interest from the supply side matched by demand-side enterprise requirements for private LTE? Early indicators suggest that it is – in certain segments – and vendors are citing numbers of "addressable sites" in the millions, although numbers of actual deployments are lurking in the double-digits at this point. Full private LTE deployments will only be suitable for a minority of customers. Target customers will be those manufacturing sites, ports, mines, and so on that are large enough to support the cost and are looking for tailored options, high levels of control, and a great degree of services and configuration flexibility.

Ovum's view is that there are significant opportunities for hybrid cellular private network–CSP network solutions to support both IoT and other enterprise communications requirements. We will be looking for growth in this area in the coming year. Such deployments can also provide excellent test beds for 5G infrastructure and applications. Rather than considering private LTE networks as a threat to their control of the telecoms services value chain, CSPs should explore the best way to leverage their considerable assets – including spectrum, network management, customer experience, and service provisioning – to enable private LTE opportunities. Vendors and systems integrators must find ways to bring CSPs into the private LTE/5G ecosystem effectively. And all parties will need to work together to demonstrate the advantages of private LTE to industrial customers.

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