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Ericsson | A practitioners’ guide to accelerate 5G for business in 2020
Chapter 8: Network business models
Emerging business models for private cellular networks A variety of business models can be used when adopting cellular network technologies for private network purposes – ranging from pure private networks with no connection to public service providers to network slicing in public networks. Now, we’re seeing new business model innovations in this area. Here, we explore the five tools making these developments possible. Before introducing private LTE, three main categories of business models dominated the market for connectivity services. The cellular network-based model, which uses a licensed spectrum, offers traffic-based connectivity services for an OPEX-centric model, where businesses pay monthly based on service usage. On the other hand, you have the private network-based model, which uses an unlicensed spectrum for a more CAPEX-centric model and dedicated Public Land Mobile Radio (PLMR) networks. These two traditional models will remain, but multiple inflection points are now driving a broad set of new business model options, including: • The introduction of cellular 4G and 5G technologies in private networks, both in shared and licensed spectrum • The phase-out of legacy wireless networks, such as PLMR • The introduction of network slicing in public networks • Network sharing realization for spectrum, network assets, operations or combinations of these three-building blocks By explaining these options and how new business models can be created, you can make it easier for your business customers to understand the options and ensure they’re aligned with their specific needs.
The five key tools for developing private network business models 1) Access to licensed spectrum 2) Ownership of network equipment and software 3) Managing and operating the networks 4) Hybrid, public and private, network use 5) Slices of public networks for private use
Access to licensed spectrum
Cellular 4G and 5G technology can be used in three different types of spectrum. The options within the unlicensed and shared spectrum are available to all businesses, and the licensed spectrum options require a partner with licensed spectrum assets. The partner owning the licensed spectrum has two main options. Firstly, they can lease out access to spectrum, or provide spectrum integrated with a broader offering. This is a fairly novel idea, as the lease can be limited by geography, time, or for a specific use. The second alternative is to offer spectrum as part of a broader offering — a complete connectivity service, where the spectrum owner also owns the equipment and operates the network. Service providers can also consider offering combinations of the spectrum and managed network operations to businesses keen on owning network assets, with the final option for service providers to offer spectrum and network assets to businesses looking to operate their own networks. It is common to expect the status quo to remain: data bucketbased business models as the only option for cellular networks in licensed spectrum, and unlicensed spectrum as the only option for access managed enterprise networks. The essential point here is that both service providers and businesses need to explore a broader range of options for licensed cellular spectrum, especially as the most innovative spectrum for 5G services – in high-band spectrum – only exist as a licensed spectrum.
