In the 5G era, industry market users’ choice of public network or private network

This year, 5G has entered its first year of commercial use, especially China's official launch of 5G commercial services, which has greatly accelerated the process of large-scale commercial use of 5G. In addition to the consumer sector, 5G's greater commercial value is expected to enter various vertical industries and enable the digital transformation of thousands of industries.

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When 5G enters the vertical industry market, theoretically there may be two paths to choose from: public network and private network. When the public network and private network meet 5G, there have been many debates in the industry recently - will operators coordinate the construction of a 5G public network and provide it to the industry through network slicing or other methods? Or will the industry build its own 5G private network in the future? Will the 5G public network replace the existing private network and do all the work in the industry market?

Hot business: Both operators and private network camps want to do this business of industry digitization

First of all, let's take a look at what 5G can do. From the three major 5G application scenarios defined by ITU, we can see that the eMBB (enhanced mobile broadband) scenario is mainly aimed at the consumer market, such as 8K ultra-high-definition video, holographic communication, cloud VR/AR, cloud gaming, etc.; mMTC (massive machine-type communication) and uRLLC (low-latency and high-reliability communication) are what we call application scenarios mainly for the vertical industry market, such as Internet of Vehicles, autonomous driving, connected drones, telemedicine, smart power, smart factories, etc.

So, facing the new 5G, should vertical industry users who are in urgent need of digital transformation choose public networks or private networks?

Zhang Tongxu, president of China Mobile Research Institute, said: "Some operators in Europe and the United States build private networks by leasing or providing dedicated frequencies, but we believe that using the public network of operators and using new technologies to provide different industries still has advantages, such as speed guarantee and reliability guarantee. The public network can improve the utilization rate of my country's spectrum and better realize the leadership of 5G. For vertical industries, it can reduce costs and improve performance. After 5G, both 2C and 2B are needed. In recent years, China Mobile has promoted the integration of cross-industry applications and built a 5G joint innovation center. More than 500 partners have joined and formed six major industry alliances. Hundreds of vertical industry solutions have been launched. In the next step, China Mobile will provide applications for solutions, build a '5G+' hard-core capability system, empower thousands of industries, and enable 5G to be well used."

As for the statement that 5G public network has more advantages than private network, those who make private network do not seem to agree. Li Xiayu, a representative of B-TrunC Industry Alliance, said: "5G cannot replace private network in the short term!" First, in terms of technology, standards and product maturity, the current 5G network cannot fully meet the needs of industry customers in terms of security, reliability, low latency, etc.: In terms of standard progress, the standards for uRLLC and mMTC scenarios are still in the process of being formulated, and the 5G multicast technology based on 5G NR to support critical tasks is expected to be standardized in 2021 (R17) at the earliest; in the case of network congestion, the current 5G slicing technology cannot solve the random access congestion problem caused by the simultaneous access of a large number of ordinary public users and industry users, and there is a risk that private network customers cannot access the network. Second, in terms of network deployment frequency bands, with the popularization of industry customer applications, vertical industries including industrial manufacturing, electric power and energy, and public emergency will more urgently need specific spectrum to meet the specific network needs of specific industries. Third, in terms of the pace of 5G network architecture evolution, the slicing technology that provides new 5G services for vertical industries needs to evolve to the SA mode to support it, but the evolution to the 5G SA networking mode faces many challenges such as technology and network complexity, which brings great uncertainty to 5G's support for vertical industries. Fourth, in terms of business services and operational capabilities, compared with the consumer market, vertical industries have the characteristics of fragmented and blurred demand, and numerous industry/enterprise/organization standards. It is difficult to serve diversified customized markets and industries by relying solely on operators. There is currently no mature business model, charging model, and operation model to learn from, which requires equipment vendors, operators, service providers, and customers to explore together for a long time.

Each has its pros and cons: The biggest uncertainty in 5G private networks currently lies in frequency allocation

It sounds like the public network camp represented by operators and the private network camp have somewhat conflicting views in order to compete for the vertical industry market.

Facing the vertical industry market, the operator camp's idea can be seen as "implanting private network thinking into 5G public network technology", which is mainly based on "network slicing" technology. By using virtualization technology on the same network infrastructure according to different business scenarios and business models, network functions are customized and managed and orchestrated, forming multiple independent virtual networks, providing "mutually isolated" network environments for different industry application scenarios, and customizing networks on demand. However, since the frequency used is not a private network, although in different slices, the physical network is still one, the power supply system is one, and the transmission is one. It is not a real private network, and can be seen as a virtual private network provided by operators for private network customers. Whether this network can be fully competent in the future in the face of public safety, emergency command, railway or subway signal dispatching and other industries with extremely high security requirements is still unknown.

The private network camp, which is still in the transition to 4G, has just begun to explore 5G. On the one hand, due to the relatively scattered demand for private networks, the high requirements for industrial chain aggregation, and the high prices of private network dedicated equipment and terminals, the construction cost of 5G private networks is bound to be higher. On the other hand, some private network equipment suppliers have stated that if they want to truly develop 5G private networks in the future, they need to carry out all-round transformation in terms of systems, architectures, platforms, terminals, and applications. At present, the industry has not found a new 5G application framework. The biggest problem with the private network moving towards 5G is that many countries and regions have not yet allocated spectrum for 5G private networks.

At present, frequency regulatory authorities in various countries have not given much consideration to industry 5G frequency bands. Germany, the United Kingdom, and Japan have allocated regional 5G dedicated spectrum for industrial users. For example, Germany has allocated part of the 3.8G frequency band to the manufacturing industry, and Japan has reserved the 4.6G to 4.8G frequency band for 5G dedicated networks. It can be seen that most of them are concentrated in the medium and high frequency bands and are only suitable for campus networks. There are no 5G industry frequency bands in China. It is expected that the acquisition of industry 5G frequencies will take a long time and be difficult. In the short term, the 5G industry frequency is not clear enough.

China has an inclusive and prudent attitude towards 5G dedicated networks and frequencies. Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, believes that it may be difficult to allocate 5G spectrum to a single industry. On the one hand, we are actively exploring the industry model, and on the other hand, we are actively studying whether 5G industry applications really need separate dedicated frequencies, including the necessity, feasibility and specific model.

GSMA's suggestion is more straightforward: regulators should avoid reserving spectrum for vertical markets in key frequency bands, as this practice will hinder the full release of 5G's maximum utilization efficiency and waste spectrum resources. For example, due to the geographical limitations of vertical industries, it is impossible to widely use these precious 5G spectrum resources within or between countries, resulting in a waste of resources. At the same time, the fragmentation of spectrum will also lead to a lack of scale and increased industry costs. In addition to 5G slicing technology, mobile operators can also build private networks on demand for enterprise users based on the coordination of spectrum resources across the entire network to meet the application needs of vertical industries.

Realistic solution: combining the advantages of public and private networks and complementing each other

Although the public network communications camp represented by operators is not very willing to reserve key frequency bands for the vertical industry market to build 5G private networks, some industry private network users with extremely stringent security requirements have expressed strong interest in 5G and hope to obtain dedicated spectrum resources to build 5G private networks.

Jiang Yongfu, communications director of the Department of Electrical Engineering of China State Railway Group Co., Ltd., said that the national railway adheres to the bottom line of safety and continues to develop railway mobile communication private networks. In solving the safety problems of railways, railways of various countries follow the principle of "private network as the main and public network as the auxiliary" to promote the application of mobile communication technologies in various frequency bands - private network is the main solution to safety, especially the safety of train operation. Other services use private network if there are conditions for private network, and use public network if there are no conditions for private network. In the future, the national railway will develop railway private networks based on actual needs and select appropriate technologies. At present, the main focus of the National Railway Group is 4G, which has the most complete standards, the highest level of standardization, and the strongest industrial support capabilities. The LTE-R system deployment based on 4G meets the needs of core key businesses along the railway section. In the future, when 5G technology matures and stabilizes, it will use the existing 900M frequency band resources of the railway to study and apply railway-specific 5G technology, deploy it in hot spots such as railway hubs and stations, and integrate it with LTE-R to realize private network applications.

According to my understanding, most private network users do not have an urgent need for 5G private networks because the 5G complete standard is not yet fully mature and industry applications are not rich enough. However, for some industry scenarios that are more hungry for bandwidth, the private network camp is ready to try some realistic and feasible ways to embrace the 5G era without obtaining authorized private network frequency bands.

According to Li Xiayu, B-TrunC will evolve towards 5G with higher bandwidth, lower latency and more connections while maintaining security and reliability, empowering private networks with higher value, which is mainly reflected in the following three aspects: First, network architecture. B-TrunC will conduct research on NSA networking + dual connection, with 4G providing coverage and 5G NR enhancing hotspots. Since there is currently no new spectrum allocation plan for 5G NR in private networks, it is possible to study the use of spectrum sharing of 1.4GHz LTE and 5G NR, as well as unlicensed NR-U technology; second, air interface technology, research on new flexible air interface parameter configurations, encoding methods and uRLLC key technologies, so as to further meet the lower latency and high reliability requirements of key industries; third, network technology, to achieve a more flexible and intelligent network architecture, further distribute and sink user-plane capabilities, enhance key 5G features such as edge computing and network capability opening, strengthen the distribution and processing capabilities of high-bandwidth data services, and the level of customized services for industry users, thereby improving overall business performance.

As it is still unknown whether China will allocate specific spectrum for 5G private networks, Li Xiayu believes that "public and private networks will coexist and complement each other for a long time. We should fully combine the advantages of both public and private networks to jointly provide services for industry users. We should use the coverage characteristics of the public network to provide general universal access and services for industry users, and provide specific highly reliable and highly secure customized services for industry users through private networks."