Private networks for enterprise IoT: Why mobile wins over Wi-Fi
Estimated reading time: 5 minutes
Speed, reliability, security. A new report investigates why companies that want to connect large fleets of ‘things’ are rejecting Wi-Fi and choosing private cellular networks instead...
Around 2021, a bunch of articles in the tech press began to question the future of Wi-Fi. 4G LTE mobile connectivity was well-established and the first 5G networks had just begun to roll out. These mobile networks promised high-speed, low latency, broad reach and deep density/capacity.
Naturally, analysts began to ask: if LTE networks are lightning-fast and available everywhere, why persist with Wi-Fi? Most observers concluded that eventually so-called fixed wireless access (FWA) could displace the Wi-Fi router in most homes.
That process is under way. According to Deloitte, there were 108 million mobile FWA connections in 2023: 13 percent of the total.
But there is more to high speed mobile connectivity than the domestic household market. There is also the corporate market. And here, many business owners are considering the advantages of LTE for a different reason – to power entirely private cellular networks (PCNs also called private networks) that will enable new IoT use cases.
What impact will high speed 4G and 5G have in this context? And how will it impact the use of Wi-Fi in the enterprise?
A new report by Beecham Research tackled this topic. In its introduction, it sets the scene as follows: “Private Wi-Fi networks have become the mainstay in business premises and campuses. They were designed to accommodate both voice and data traffic and also to ensure that mobile phones could use Wi-Fi when making calls inside the company’s premises. However, they have never worked too well for IoT on very large sites, such as airports, large manufacturing sites, mines, ports and more.
Has the time come when Wi-Fi networks used for business IoT operations should be augmented or replaced by Private Networks?”
Beecham Research ran a global survey of enterprise IoT users to answer this question. The study highlighted significant problems with Wi-Fi in an IoT setting. It revealed:
· 70% of respondents stated that their Wi-Fi network needed to operate outdoors, but onsite.
· 63% said they had difficulties achieving this.
· 68% of respondents stated that their Wi-Fi network needed to connect with moving devices, yet 72% of these indicated that this sometimes resulted in a loss of connection
· 70% of respondents considered that there were blind spots on site with no Wi-Fi coverage
· 51% believed there were other interference problems with their use of Wi-Fi
· 71% believed their Wi-Fi installation to be secure. However, expectations for cellular were typically higher than 99%.
The report concludes: “Unlike cellular, Wi-Fi was not designed for mobile assets. Coverage is more limited than cellular, a concern for large site deployments. Interference, particularly in outdoor applications, is another concern.”
The answers seem to suggest that a large percentage of enterprise IoT users are ready to migrate from Wi-Fi to mobile connectivity. But what about cost? After all, there is a perception that mobile connectivity is more expensive than Wi-Fi.
But this perception is outdated. Indeed, in many contexts – including large-scale enterprise projects – Wi-Fi can be more expensive than mobile.
How much more? The Beecham report describes a project that was set up to provide wireless coverage in a warehouse space. It calculated two fees for installing hardware, software and cabling – one for Wi-Fi, the other for 4G. The difference was dramatic: $130,000 for Wi-Fi compared with just $20,000 for mobile LTE.
Of course, this is just a one-off project. But it does illustrate the fast-changing fundamentals of the connectivity space.
The report concludes that, because of the above challenges, enterprise IoT users are now considering the main connectivity alternative to Wi-Fi: the private cellular network.
Indeed, it contained a list of quotes from executives that reflected this sentiment. One said: “Deploying cellular is really the next step of digital transformation to cover where Wi-Fi cannot address. Cellular and Wi-Fi will coexist, but today companies are looking to explore new capabilities that private cellular networks can bring.”
The interviewees were then asked: what are your main reasons for considering private wireless networking? The answers were as follows:
• Management of on-site traffic 62%
• Local network coverage for on-site needs 73%
• High network reliability 76%
• High network security 70%
• Data remaining on site 57%
• Improved staff experience/safety 49%
This positive view explains why there could be as many as 22,000 private networks in place by 2030 (see box).
However, the quotes in the report also alluded to one major challenge facing the private network space: supporting enterprises in the set-up and management of their own private networks. As one respondent said: “Many companies are not in the telecommunication sector; they will need handholding by whoever they are working with in order to formulate a network that works properly.”
The report spelled out this lack of know-how in one eye-catching sentence: “While interest in private cellular networks is high, education and understanding of the journey still have some way to go: (there have been) instances where enterprises were unaware that SIM cards are required in order to connect to the private network.”
Of course, in almost all cases the enterprise will not set up and manage the PCN itself. Instead, that responsibility will fall to a specialist private network solution provider or system integrator. Typically, these companies have plenty of expertise in installing complex network equipment.
Where they lack experience is in the acquisition, installation and day-to-day management of SIM cards.
And this inexperience is even more marked in private networks for IoT deployments. Why? IoT deployments don’t use traditional insertable plastic SIMs. Instead, they use a new form factor – the embedded SIM – which is soldered into place and set up over-the-air. This lets the enterprise user change the subscription dynamically without inserting or changing the SIM. It also saves space in the IoT device.
Managing a fleet of eSIMs poses a lot of questions: How can system integrators easily order new SIMs? Or ensure service continuity when they want to change the network configuration? Or stay connected when switching to a new connectivity provider?
Specialist provider Thales responded to this challenge by creating ‘eSIM as a Service’ solution. It comprises an online portal which lets users configure and order eSIM profiles and SIM cards in a few simple steps, then connect them seamlessly and securely to their private networks.
The eSIM as a Service concept sits alongside other solutions that simplify set-up for IoT enterprises and their integration partners. These include services that eliminate the need for manual configuration of IoT devices before deployment, along with platforms that enable eSIMs to activate immediately out-of-the-box, no matter which network is managing the subscription.
And then there’s the security question. Tamper-resistant eSIMs are very secure, but the challenge here is making sure the IoT device middleware can easily leverage the security services embedded in the eSIM. The global trade body GSMA created the IoT SAFE initiative to address this. It specifies an API so the device can use the credentials and security services in the SIM card in a standardised manner.
All the above developments are making it easier for enterprises to conclude that the PCN – rather than Wi-Fi – is the best option to connect and manage their IoT devices – although it could take many years for businesses to migrate. The findings of the Beecham report back this up. The time to log off the Wi-Fi is on the horizon.
Companies in diverse markets are starting to embrace private networks as they seek out more reliability, speed and security in their private connectivity infrastructure. But how widespread is this adoption? And how much is the market worth. Here are some headline numbers.
· Enterprise spend on private networks will near $10 billion globally by 2028, rising from $1 billion in 2023 (Juniper Research)
· The number of networks will grow at a CAGR of 65% between 2021 and 2027 to reach 39,000 (Analysys Mason)
· Private LTE/5G network deployments will increase tenfold between 2021 and 2026. More than 2,500 private cellular networks are in operation globally (2023), expected to increase to 29,000 by 2028 (Kaleido Intelligence)
· There are now 78 countries around the world with at least one private mobile network (GSA)
· High speed, low latency. In a private network the locally-based infrastructure allows data to be processed immediately. This improves speed and reduces lag
· Reliability: A closed local network is not susceptible to external disturbances from the public network, which makes it more stable
· Access and flexibility: The wireless nature of a PCN makes it easier to connect devices that might be inaccessible with cables and wiring
· Data protection: Private networks offer robust encryption and authentication protocols that are typically stronger than those used in Wi-Fi networks. This protects sensitive business data from breaches and unauthorised access
· Controlled access: Enterprises can have more control over who can access the network, reducing the risk of external threats. PCNs are isolated from the public internet, which minimises exposure to external attacks and vulnerabilities commonly associated with Wi-Fi networks
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