OYSTER BAY, NY — The market for private LTE networks deployed by end-vertical enterprises will be worth US$16.3 billion by 2025, according to market consultancy firm ABI Research.
Private LTE will also lay the foundation for 5G services in end-vertical markets, such as healthcare, transport and logistics, manufacturing, smart venues, smart cities, and oil and gas, ABI Research said in a news release on Thursday.
The future of mobile service providers (MSPs) and network vendors will be defined beyond the consumer market to end-vertical enterprises, making private LTE a key asset to create new revenue streams, ABI Research said. Among the vertical markets analyzed by ABI Research, transport and logistics will be the largest opportunity, representing 26.3% of the total private LTE market by 2025, ABI Research said.
The growth potential and size of the market, where virtually every sector could benefit from private LTE deployments, mean that an increasing number of companies will be attracted to it, according to ABI Research. Specialized network vendors, indoor wireless providers, web-scale players and global vendors could all look to private LTE for revenue growth, ABI Research said.
However, contrary to this market trend, MSPs have been hesitant to fully commit to private LTE, which they may see as a competitive threat to their core business and investments. In its news release, ABI Research advised MSPs to start engaging with partners and taking a more central role in the delivering of private LTE solutions, or they will miss this opportunity to enter the vertical market space.
“The importance of private LTE is not only in its revenue opportunity as the technology has also an additional value. The delivering of successful projects will show the reliability of cellular technology (and its ecosystem) and will ultimately pave the way for 5G in industrial markets,” said Pablo Tomasi, senior analyst at ABI Research, in the news release.
Tomasi explained that a new understanding of spectrum usage has emerged in the US since the Federal Communications Commission (FCC) made 150 MHz of shared spectrum commercially available in the 3.5 GHz band, known as the Citizens Broadband Radio Service (CBRS), which does not require spectrum licences to be used. This, along with increasing demand from industry verticals, is helping to drive the private LTE market, Tomasi said.
“The United States is taking the lead in bypassing the issue of spectrum, which has been traditionally one of the roadblocks to private LTE expansion. The CBRS three-tier system provides 150 MHz of spectrum and most importantly, offers the ability for companies to acquire spectrum depending on their needs. Besides CBRS, other developments such as MulteFire [LTE-based technology that uses unlicensed or shared spectrum] and that countries are considering auctioning regional spectrum, show that this new spectrum paradigm has a global scale,” Tomasi added.
