The Dell’Oro Group has cut the forecast for private wireless networks for the second time. The firm maintains that it still will be a big sector, though.
Total private wireless radio access network (RAN) revenues – including wide-area (traditional and new) and small cells – are now projected to grow at a 24 percent compound annual growth rate between 2022 and 2027. For reference, public RAN (Total RAN minus private RAN) is projected to decline at a 2 percent CAGR over the same time period.
Private wireless networks use the same technology as commercial cellular networks but are for the exclusive use of a single entity. While some people have been quite bullish about the opportunity, that opportunity may not be materializing as quickly as anticipated.
The latest forecast reduction was attribute to slowness in the wide-area network (WLAN) segment. The previous reduction was due to a weakness in estimates of on-site deployments.
“Even with revenues coming in below expectations, our long-term position remains unchanged – we still firmly believe that private wireless is a massive opportunity,” Dell’Oro Group Vice President Stefan Pongratz said in a press release.
“At the same time, market opportunity is not the same as a forecast and given the current progress, it will clearly take some time for the private wireless market to reach its full potential. In fact, our current forecast is for private wireless to reach roughly 10 percent of its potential by 2027,” continued Pongratz.
Highlights from the Private Wireless Advanced Research Report:
- Preliminary findings suggest the largest public RAN suppliers — including Huawei, Ericsson and Nokia — are well positioned in this initial private LTE/5G phase. Enterprises and operators appear more willing to try non-traditional RAN suppliers in private wireless settings.
- Risks are broadly balanced. The successful launch of private 5G services by suppliers with strong enterprise channels and/or the successful introduction of a new device could accelerate the demand for 5G in the enterprise.
- However, though 5G awareness is improving, it will be time for enterprises to fully understand the value of private LTE/5G. Pricing also needs to evolve. Some of the price points for 3- and 5-year leases run the risk of squelching penetration, especially in the mid-market Wi-Fi like segment.
Providers are eyeing categories as diverse as investment firms (BlackRock), airports (Chicago’s O’Hare) and farmers as early candidates for private networks.
