Private networks are the key driver for 5G growth

The ability of 5G to enable wide-scale industrial applications has long been billed as a major differentiator for the standard compared to 4G.

Commercial 5G deployments are hitting something of a plateau, with consumers refusing to pay more for the standard – and private networks within the enterprise sector are emerging as a key growth area for 5G, particularly within developing countries.

To learn more about the factors driving this, we spoke to Asad Khan, Research Director for 5G & Wireless Networks at SNS Telecom Research.

Could you explain the key advances in functionality that private 5G networks offer over private LTE networks?

Compared to LTE technology, private 5G networks can address far more demanding performance requirements in terms of throughput, latency, reliability, availability and connection density. Private 5G networks in real-world settings have been shown to demonstrate multi-Gbps data rates and latencies in single-digit milliseconds, to support more demanding application scenarios – for instance, the UHD (Ultra-High Definition) video transmission, coordination of large fleets of AMRs (Autonomous Mobile Robots) without predetermined paths, remote-controlled operation of heavy machinery, and even the replacement of physically wired connections for rapidly reconfigurable production lines.

The current use cases for private 5G networks are largely wide-scale enterprise applications – do you expect new use cases to emerge as adoption increases? Are they more suited to larger enterprises than SMEs? Which are the most promising vertical sectors?

We definitely expect to see more use cases emerge as adoption increases. Although initial production-grade private 5G installations are dominated by larger enterprises, we’re seeing significant interest from SMEs in many national markets. The most promising vertical sectors where the benefits of private 5G networks have already been demonstrated include manufacturing, warehousing, transportation (including ports), mining, oil and gas, utilities and healthcare. Some examples are summarized below:

• Manufacturing: Baosteel – a business unit of the world’s largest steelmaker China Baowu Steel Group – credits its 43-site private 5G deployment at two neighboring factories with reducing manual quality inspections by 50 percent and achieving a steel defect detection rate of more than 90 percent, which equates to $7 million in annual cost savings by reducing lost production capacity from 9,000 tons to 700 tons.
• Warehousing: JD Logistics – the supply chain and logistics arm of Chinese online retailer JD.com – has achieved near-zero packet loss and reduced the likelihood of connection timeouts by an impressive 70 percent since migrating AGV (Automated Guided Vehicle) communications from unlicensed Wi-Fi systems to private 5G networks at its logistics parks.
• Transportation: The EWG (East-West Gate) Intermodal Terminal’s private 5G network has increased productivity from 23-25 containers per hour to 32-35 per hour and reduced the facility’s personnel-related operating expenses by 40 percent while eliminating the possibility of crane operator injury due to remote-controlled operation with a latency of less than 20 milliseconds. Since adopting a hybrid public-private 5G network to enhance the safety and efficiency of urban rail transit operations, the Guangzhou Metro rapid transit system has reduced its maintenance costs by approximately 20 percent using 5G-enabled digital perception applications for the real-time identification of water logging and other hazards along railway tracks.
• Mining: Dongyi Group Coal Gasification Company ascribes a 50 percent reduction in manpower requirements and a 10 percent increase in production efficiency – which translates to more than $1 million in annual cost savings – at its Xinyan coal mine to private 5G-enabled digitization and automation of underground mining operations. Shanxi Coking Coal Group’s Yanjiahe coal mine has reduced the number of workers in a single shift from 30 to fewer than 10 through the application of private 5G-enabled smart mining applications, including remote control of vehicles and unmanned inspections of underground mining machinery.
• Oil & Gas: Sinopec’s (China Petroleum & Chemical Corporation) explosion-proof 5G network at its Guangzhou oil refinery in Guangdong has reduced accidents and harmful gas emissions by 20% and 30% respectively, resulting in an annual economic benefit of more than $4 million. The solution is being replicated across more than 30 refineries of the energy giant. 
• Utilities: SGCC (State Grid Corporation of China) is leveraging a private 5G NR-U (NR in Unlicensed Spectrum) network – operating in license-exempt Band n46 (5.8 GHz) spectrum –…