5G private network development will accelerate in 2024

The growing demand for fifth-generation network solutions has led to an increasing growth rate in the 5G market. There are signs of a major shift in the way networks are built. The growing importance of Open RAN and the increasing demand for private network deployments for industrial, academic, and public purposes will shape the near future of mobile networks.

1. Open RAN is gaining momentum

The discussion about the future of mobile networks will be driven by Open RAN. While the entire radio access network market is far from being replaced by the open model, Open RAN has now become the fastest growing part of the field. Its expansion rate in the past few years has far exceeded previous estimates. It is expected that by 2027, Open RAN revenue will account for 15% of the entire RAN market. Open RAN's position as a dominant trend in the development of mobile networks has been recognized by private sector and government officials around the world. According to a major survey of 119 network operators around the world, more than 80% of operators confirmed that they will include Open RAN in their technology roadmaps, and more than half of operators hope to deploy Open RAN networks in the next two years. Some of the largest communication operators, including Vodafone Deutsche Telekom, Orange, Telecom Italia and Telefónica have announced that they will be "Open RAN ready by 2025". This is just over two years after declaring Open RAN as the preferred model for building networks for European customers and calling on EU and national policymakers and the private sector to prioritize Open RAN as the preferred model. In fact, governments have indeed taken actions to promote the deployment of Open RAN. The UK government is a good example. It has implemented a dedicated strategy to support the deployment of open RAN networks, promote innovation, diversify the 5G supply chain, and make it more resilient. So far, the program has been supported by about 300 million pounds. Germany has also taken similar measures, including providing 300 million euros worth of funds to the private sector.

The trend that will dominate 5G in the near future will be the increasing role of Open RAN, which will receive more attention due to cost reduction, security reasons, avoiding risks associated with vendor lock-in, and incentives for greater market competition and innovation.

2. The world wants to use private networks

Another important trend is the emergence of private 5G networks. Industry, academia and local governments around the world have realized that private 5G provides opportunities to advance far-reaching digital transformation. Although more than one-third of industrial private networks use 5G technology, the private 5G market is expected to grow at an astonishing rate of 48.2% per year, reaching $129.6 billion by 2032.

Private networks, which make their owners independent of traditional operators’ infrastructure, are driving the automation and robotization of industrial processes, marking the rise of Industry 4.0, and providing citizens with the latest 5G-based public services in line with the concept of smart cities and smart villages. All this, coupled with the ability to customize private networks to the individual needs of owners in a specific area, and its opportunity to provide connectivity to areas that were previously unable to access mobile networks, has made private 5G a focus for a growing number of private and public sector players around the world.

3. Central and Eastern Europe will become the new center of mobile network development

The Open RAN revolution essentially promotes more intense competition in the mobile network industry and allows more diverse, often highly specialized players to participate in the market. As a result, new communications R&D centers are emerging around the world. Central and Eastern Europe seems to be a typical example.

The region has made progress in this regard in recent years. CEE governments recognize the benefits of new generation networks and are introducing regulations that favor the development of dedicated 5G networks. Countries such as Croatia, the Czech Republic, Estonia, Hungary, Latvia, Slovakia, Slovenia and Poland have deployed industrial and academic dedicated 5G networks. CEE Europe’s leading 5G ecosystem forum – 5G Tech – is held annually in Latvia. Riga is also home to the region’s first Open RAN 5G Lab, which is hosted at the Riga Technical University and provided by Poland’s IS-Wireless.

It appears that the region has the ambition, capability, and is gaining momentum to become a new and important global communications development center, keeping pace with global trends and even shaping them. It should and will likely attract the interest of investors seeking to get ahead and tap into the dynamism and potential of emerging markets.