Mobile Operators Amping up Capabilities for Private Wireless Networks

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• GlobalData’s Private LTE/5G Wireless Network Services report update shows mixed results for the last six months as operators faced increasing competition from system integrators, network equipment, and infrastructure vendors; several operators publicly acknowledged slower than anticipated momentum.

• In spite of this difficult competitive environment, most operators enhanced offerings or struck alliances to help boost the likelihood of opportunities down the road. All still consider private wireless networks to be a substantial revenue opportunity.

The public announcements below were made between September 2022 and February 2023 and disclosed a mixture of technology and go-to-market alliances, a few new customer trials or commercial deals, some unique offerings for specific segments or verticals, and adjacent network or technology advancements that should have a positive effect on future private network momentum.

MWC23: T-Mobile Touts Network Advancements, Developer Tools, and FWA Gateways at MWC

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• US operators don’t generally make announcements at MWC, as it tends to be more of a European and international event. They often show up to meet analysts and potential customers, but rarely note new service launches. T-Mobile, however, made three key announcements.

• At MWC, T-Mobile further illustrated that it is increasingly aligned with Deutsche Telekom. Its announcements make clear it is taking every opportunity to showcase initiatives across developer, enterprise, and 5G network services.

T-Mobile made three announcements (so far) at Mobile World Congress (MWC) 2023. On Day 1, the ‘Un-Carrier’ announced that Cisco and T-Mobile will offer businesses Cisco Meraki’s first-ever 5G cellular gateways for fixed wireless access (FWA), the MG51 and MG51E. In addition, Deutsche Telekom and T-Mobile US introduced network application programming interfaces (APIs) and a joint developer platform in Germany and the US. On Day 3, T-Mobile announced higher speeds and Apple support for its 5G standalone (SA) network.

IT Service Providers Bring IoT to the Next Level

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• GlobalData’s February 2023 report highlights how IT service providers play a key role in delivering IoT services for enterprises, eliminating many cost and complexity barriers with a one-stop shop, providing access to leading vendors for IoT use case and vertical expertise, and offering consulting and professional services to smooth the deployment path.

• Recent acquisitions of technology vendors as well as new partnerships in adjacent digital transformation technologies to IoT enhanced the ability of ITSPs to positively effect market growth and successful deployment outcomes.

IT service providers (ITSPs) play an important role in delivering IoT services to enterprises, offering a way to deal with cost and complexity barriers with a one-stop shop, provide access to a set of technology and go-to-market partners for key use cases and verticals, and provide consulting and professional services to smooth the path for hesitant customers. Over the last six months, acquisitions and technology partnerships enhanced this proposition, adding capabilities in adjacent technologies to IoT such as AI, machine learning, and digital twins, as well as gaining expertise (and existing customers) in relevant verticals such as manufacturing, warehousing, and supply chain management.

Enterprise Mobility Services on the Rise Energized by 5G, Private Networks, and Sustainable Device Lifecycle Management

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• GlobalData’s report on global enterprise mobility services highlights a dynamic market. After several years in which offerings such as unified endpoint management and telecom expense management had commoditized and remained static, 2022 was an encouraging year.

• 5G services, edge computing, fixed wireless access, mobile private networks, and a sustainable spin on device lifecycle management were among the key enhancements.

2022 stood out as a time when new connectivity options became more widely available, including public and private 5G; edge computing for low latency and workload optimization began to bear fruit; integration of wireline security operations with unified endpoint management (UEM) became more commonplace; new initiatives were launched linking sustainability with device lifecycle management, and fixed wireless access (FWA) for businesses gained traction. Mobile private networks also continued to gain traction with new reference customers, use cases, and vertical opportunities.

Is the IoT Platform Market Consolidating or Falling Apart?

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• 2022 saw not only market leaders exiting the IoT platform market but also other changes in the IoT vendor ecosystem, including Semtech’s acquisition of Sierra Wireless and Telit’s acquisition of Thales’ IoT module business.

• These changes may signal a much-needed consolidation of a crowded, fragmented market but also show the difficulty of monetizing IoT platforms as standalone offerings.

The IoT platform market is more-or-less divided into two sub-markets. The first sub-market is the connectivity and device management platform market that has long been led by Ericsson and Cisco, both of which sell them to CSPs that in turn position them as enablers of managed services to enterprises along with IoT connectivity. CSPs generally have a revenue share arrangement with these third-party platform vendors. Many mobile operators such as Vodafone (GDSP), Telefónica (KITE), and Verizon (ThingSpace) have also developed their own platforms, as this gives them more control over feature sets and product lifecycles with the ability to add on capabilities such as hyper-precise location, rapid on-boarding, and usage visialization and analytics. It also allows the operators to avoid the revenue share deals, which erode profits. Operators use these platforms to enhance the value of their IoT connectivity services with the ability to offer VAS for management and visibility. In some cases, they do not charge the enterprise separately for connectivity management but use it as a built-in capability with which to entice enterprises to deploy IoT services via an easier to use end-to-end solution. Several operators have their own platforms but may use third-party solutions for particular customers. There are also vendors such as Huawei, Software AG, Nokia, and Telit that offer IoT platforms directly to enterprises.

Nokia Private Cellular Networks Results Point to Market Challenges

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• Nokia’s Q2 2022 disclosures about its private cellular network market performance provide insights on the overall market, which is seen as a significant growth opportunity by a diverse cast of characters.

• Nokia experienced a slower new-customer growth rate over the last two quarters than in 2021. The company notes regional, seasonal, and go-to-market disparities with some verticals slower to adopt than others.

Nokia transparently discloses details of its private cellular wireless market performance to analysts each quarter, which not only provides insights on the vendor’s momentum, but also enlightens us with information on enablers and challenges that likely apply to most providers. As so many vendors and service providers see private cellular as a major growth opportunity, Nokia’s insights may help explain why the market is still at an early stage of enterprise adoption and why some provider segments appear to be doing better than others in gaining large numbers of new customers and associated revenues.

US and European Operators See Private Cellular Network Traction

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• GlobalData’s new report (please see ”Private LTE/5G Network Services”) profiles AT&T, Verizon, T-Mobile, Vodafone, Orange, Deutsche Telekom, Telefónica, and BT. These operators announced new wins/deals and diverse technology and use case-specific alliances over the last six months.

• Announcements disclose not only the expanded use of private cellular by customers, but also plans to deploy 5G more widely, leverage technologies such as AR/VR and edge, and to deploy low-latency applications.

Private LTE/5G network services are offered by leading mobile operators and are aimed at business customers looking for dedicated connectivity, security, and data privacy combined with the flexibility of cellular technology and its support for advanced use cases within industrial manufacturing sites and other geographically constrained environments such as utilities, mines, ports, and campuses. Many of these businesses are leveraging private 4G; others are deploying or planning to use 5G to take advantage of its high speeds and low latency, often in combination with edge computing. Private 5G is also positioned as a follow-on and/or complement to in-building/campus WiFi networks. Leading mobile operators are gaining new customers from private networks and anticipate substantial future revenues for connectivity, as well as value-added services such as design, testing, proofs of concept, integration, application enablement, edge computing, and ongoing management. According to the Global Mobile Suppliers Association, there are 889 commercial deployments of private cellular networks globally, including only one deployment per customer per country.

Celona Focuses on Private Cellular Device Interoperability with Certification Initiatives

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• Celona raises the profile of its private network offering by introducing device certification and enterprise training programs to address interoperability, enhance plug-and-play experience, and increase the number of devices that work on its network.

• The new program streamlines the device certification process while providing rigorous performance testing, including suites for enterprise applications and measurements of parameters such as packet error rate, latency, handover time, and features for QoS and 5G routing.

Celona’s new device certification and customer training programs have several key aims. In order to expand its share of the increasingly competitive private wireless network market, Celona needs to expand the number of certified devices that work with its private wireless offering and edge software. At the same time, it wants to ease customer pain points, which it claims have not been addressed well by other providers. These include (1) the difficulty of finding the best devices for the customers’ particular use cases and environments; (2) making sure these devices work properly, not just from the perspective of the standard certification criteria such as regulatory compliance and device specifications for macro networks, but based on more rigorous performance testing; and (3) ensuring that these devices are interoperable. All of these issues feed into its marketing claims about having turnkey, plug-and-play solutions. The new customer training modules are also aimed at frictionless deployments, which in turn provide more satisfied customers and potential references. Specific elements of its new programs include:

IoT M&A and Product Exits Consolidate a Fragmented Market but May Augur Trouble

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• The last two weeks have seen unusual levels of mergers and acquisitions (M&A) activity within the IoT ecosystem and the announced exit of an IoT platform from a major vendor.

• These changes confirm a need for consolidation in an overly complex and fragmented market with a way to provide growth and longevity for vendors by enlarging product scope.

M&A

• On July 29, Telit, a US-based provider of IoT technology solutions including hardware and management platforms, announced its intention to acquire the cellular IoT products of Thales, a French vendor of aerospace, defense, security, and digital identity solutions. These include Thales’ portfolio of wireless communication modules, gateways, and data modem cards that support 4G LTE, LPWAN, and 5G. Telit notes that the acquisition will expand its presence in new industrial IoT segments including payment systems, energy, e-health, and security. It also enhances the company’s ability to respond to demand for cybersecure IoT solutions in modules and cellular connectivity. In turn, Thales will take a 25% stake in the expanded Telit business, which will be rebranded as Telit Cinterion.

IoT Enhancements Among ITSPs Driven by Acquisitions and Alliances in 2022

Kathryn Weldon – Research Director, Business Network and IT Services – Americas

Summary Bullets:

• GlobalData’s latest report on IoT services from IT service providers (or ‘ITSP’ – please see: ”IT Services Provider IoT-Services Competitive Landscape Assessment”) highlights recent alliances and acquisitions that have given providers a deeper focus into industrial verticals or enhanced digital transformation capabilities with IoT and adjacent technologies.

• Looking at new services, partnerships, and recent alliances over the last six months, GlobalData ranks Atos as a ‘Leader’ in ITSP IoT services; Accenture, Capgemini, and IBM as ‘Very Strong;’ and InfoSys and Cognizant as ‘Strong.’

Recent key announcements from these providers not included in the aforementioned report (and others such as Tech Mahindra and Wipro) demonstrate how important recent acquisitions and alliances have been to fortify IoT offerings along with other digital transformation technologies such as AI, digital twins, 5G, edge, blockchain, and cloud services.