In our last blog on carrier-provider partnerships for private networks, we explained how carriers are leveraging these partnerships to co-develop network solutions and access new markets or verticals. Operators and providers have their own strengths and weaknesses and these partnerships seem like a win-win situation. But it also leads to situations that turn them into competitors in the same market.
Challenges with Operators
Operators typically focus on selling the latest “G” rather than apps that solve business problems. Each company has different needs and requires a personalized but fast solution. It can be time-consuming and difficult for operators to understand the extent of customization involved. This can be seen as a barrier for vendors as they quickly realize the value proposition of enterprise services.
More and more markets are allocating frequencies for private networks directly to industrial groups and companies. This mainly works in favor of suppliers as they can engage with companies directly. But some use cases may require low band while others may require mmWave, meaning businesses may still have to depend on MNOs for the required spectrum. This is a big advantage for operators because they have a range and a massive amount of spectrum.
However, operators progress slowly and can focus on limited verticals instead of a range of verticals. Therefore, the downside for vendors is that it limits their sales channel and they have to depend on MNOs for certain network deployments.
SWOT Analysis of Mobile Network Operators and Network Equipment Suppliers
Vendor Marketing Strategies
Nokia has more than 485 private network customers with double-digit growth in order intake in the second quarter of 2022. The supplier sells solutions with or without ORM, with an increasing proportion of its sales coming from direct agreements with companies that can access the spectrum without the operator.
Ericsson is also pushing hard in space. The hardware vendor started with a slightly different approach, focusing on delivering dedicated network solutions through partnerships with mobile operators. However, Ericsson has also started building an ecosystem of partners with vertical expertise or specific device capabilities.
The main differentiator between big vendors like Huawei, Nokia, Samsung and Ericsson and players like Airspan, Baicells and JMA is the different market segments they target. Large vendors are experts in providing tailored solutions to enterprise customers in complex industrial environments such as factories, warehouses, ports, mines and critical communications. On the other hand, smaller players target the lower end of the market, which is mostly made up of small and medium enterprises. For example, Baicells announced a cost-effective private LTE network that can be built for less than $1,000 for Wireless Internet Service Providers (WISPs).
Why associate beyond the operators?
Primarily, vendors are partnering with other ecosystem players beyond carriers in an effort to sell private wireless solutions directly to enterprises in response to carriers’ slow start.
Additionally, different verticals require different business models with specific expertise in network consulting, design, and management. It is not always viable for a single vendor to offer the complete solution stack. This leads to a variety of collaborations with system integrators, hyperscalers, enterprise connectivity solution providers, mobile core specialists and more to deliver end-to-end managed solutions. Additionally, it also opens up more distribution channels for vendors to sell solutions.
Point of view
Vendors are committed to finding ways to become the first choice for network deployment partners and deliver real business value. They are partnering with system integrators and expanding their portfolio by introducing solutions for seamless interworking over private 5G and Wi-Fi networks.
However, it is still a fragmented market and some vendors are trying to offer solutions at competitive prices with that of Wi-Fi. Some open RAN providers are also involved, as private networks are presented as their new ground. game after the new networks. But we have yet to see large-scale deployments of this growing list of vendors.
Ultimately, much of the activity in the private networking space will be conducted within the ecosystems of networking equipment and enterprise solution providers, as they reduce their reliance on carriers. telecommunications. MNOs will need to evolve their business models to stay relevant as more tech giants acquire spectrum and upside providers.
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