Nokia has been by far the most active of the major vendors in pursuing the rising private networks opportunity. Many enterprise sectors are interested in 4G or 5G connectivity, especially where they require levels of mobility, coverage and reliability that are hard to achieve with WiFi. But where the networks will support business-critical applications, they want far greater control of the performance and the data than they would get on the public network.
This is a double-edged sword for MNOs, whose business model has been built on rolling out huge, generic networks on which all kinds of users and applications could ride. Delivering specialized connectivity, much of it indoors, is harder to make profitable, though some operators, such as Deutsche Telekom, are being aggressive in pursuing industrial and campus network opportunities with dedicated private networking divisions.
Others will hold back, or wait to support enterprise requirements through 5G slicing, and that opens a gap for alternative service providers, which could be enabled by the kind of cloud-based platforms that Nokia has developed; or even for a vendor like Nokia to provide private networking services directly to enterprises, bypassing its traditional telco customers (or just including them for their spectrum, where there is no shared or dedicated enterprise spectrum option).
Nokia has been far more willing to grasp that nettle than Ericsson or Huawei, and has made some valuable advances in the enterprise market, at a time when it badly needs to shine in new growth areas, because of its setbacks in the traditional MNO 5G space. It claims to have enabled 180 private network roll-outs to date, 30 of them 5G-based.
Its latest move is to release software that enables enterprises to deploy 5G Standalone private networks without having to support an entire telco-grade 5G core. Instead, Nokia has found a way to mix and match specialized features in a compact software stack that is optimized for particular use cases or a particular customer.
This is a strong use of the microservices technology on which the fully-fledged 5G core is based. Functions and services can be combined and recombined flexibly to suit the specific needs of a customer or application, making it far more simple and cost-effective for an enterprise, or its service provider partner, to deploy a private network, with most of the control coming from cloud platforms (such as Nokia’s Cloud Packet Core, or its WING IoT offering).
The 5G SA private wireless solutions will range in scope from a compact network-in-a-box with cloud-based core and management, to more complex, customized systems to support specialized and critical use cases. Enterprises can choose two routes. One is the Nokia Digital Automation Cloud (DAC) – a compact, plug-and-play system which enables a high degree of automation. In this scenario, Nokia itself may run the network, or a service provider can do so from the DAC, and the main installation for the enterprise consists of the radio units and an edge server.
The other option is Nokia Modular Private Wireless, which allows for significant customization and has a full core network deployed on-site.
Nokia says it already has 5G private networks installed with companies such as Deutsche Bahn, Lufthansa Technik, and Toyota Production Engineering, and it recently announced a deal to implement a 5G Standalone private network for Sandvik’s mining and rock technology division at its test mine in Tampere, Finland. Manufacturing is the key market where it sees short term 5G opportunities.
Stephane Daeuble, head of enterprise marketing at Nokia, told SDxCentral that private enterprise networks are “significantly smaller in terms of size and capacity, so effectively that’s one part of it. We have to adapt 5G code to effectively function for much smaller deployments as well. Today, things are a lot easier because a lot of things are now virtualized or cloud-defined, so we were able to rapidly downscale what we provide to operators, and offer effectively a scaled-down version for the enterprise.”
Nokia also adapted its network management system for enterprise-specific 5G requirements, and so that management functions can run locally as well as in the cloud.
It says that about half its private 4G and 5G networks are currently running in operator licensed spectrum, with varying degrees of MNO involvement from being the main service provider, to just leasing the bandwidth. The rest are using shared spectrum or dedicated enterprise airwaves – the importance of non-telco spectrum is highlighted by the fact that, even though this is available in only a “few dozen” countries, it already drives about 50% of Nokia’s base. As more regulators become willing to allocate spectrum for flexible, shared or enterprise use, or for neutral hosts, so there should be further stimulus for private networks, and for the far more diverse base of deployers and service providers they require.
This is where Nokia’s willingness to bypass its traditional customers in order to win new business will pay off, and it will also hope to import some of the expertise it is gaining in key industrial sectors, back to core MNO clients, as some of them start to wake up to the enterprise 5G opportunity and seek to improve their capabilities.
Enterprise cellular deployments could treble the number of base stations in the world from the current figure of about seven million, Daeuble believes.
Daeuble made some interesting comments about open RAN in the enterprise space. Nokia has thrown its weight heavily behind O-RAN in the public networks arena, presumably to try to ride a wave of open network deployment, if it comes. That would see it, in Nokia’s vision, wrongfooting competitors which are stronger in conventional 5G RAN than the Finnish firm, but slower in O-RAN, such as Ericsson. It would also enable Nokia to target significant market share in O-RAN deployments, playing its track record and technological expertise against the lesser experience levels of the challengers.
But in the enterprise, the picture may be different, and in a market in which Nokia has a headstart on its main rivals, it will be less happy to support an open ecosystem and lower the barriers to entry for other suppliers. Daeuble said the focus on open RAN in the enterprise is far less than in telco networks. Most enterprises want end-to-end networks which can be deployed and managed quickly, cost-effectively and simply by a trusted partner, rather than dealing with the complexities of buying disaggregated radios and other equipment, and contracting with multiple suppliers.
This may be wishful thinking on Nokia’s part, but Daeuble claimed: “In almost all of our deployments so far the enterprises have been choosing a single vendor to supply them the end-to-end, and the end-to-end goes way beyond the radio.”
In late 2016, Nokia’s president of mobile network, Samih Elhage, set out Nokia’s enterprise wireless plans and said the company was targeting “attractive adjacencies” to its core mobile network market, in new verticals which would offset the sub-1% CAGR expected in the telco market in the early 2020s.
In the first quarter of this year, Nokia’s enterprise division grew its revenues by 20%, to €311m (US$356m), by contrast with the company’s overall sales, which fell by 2%, to about €4.9bn ($5.6bn).
Raghav Sahgal, president of Nokia Enterprise, said in a statement: “Private wireless connectivity is central to our customers realizing their long term digital transformation goals. By delivering 5G SA, we’re paving the way to accelerate digitalization in the most demanding of use cases such as automotive manufacturing, where cloud, robotics and autonomous machine operations create mission-critical demands for reliable low latency and high data rate.”