18 Sep 2020

Can 5G private networks boost industrial productivity?

Consumers may think 5G means faster downloads, but industry stands to gain real financial benefits from other key features of the latest mobile network standard.

factory floor

The 5G mobile standard is being heavily marketed to consumers as enabling faster downloads, but it's industry that may have the most to gain. In part, this is due to 5G’s adaptation to the requirements of industrial digital transformation. It is about lower latency, higher reliability, the ability to provide connectivity to a much greater density of industrial sensors, localization with higher precision down to sub-meter level indoors, and the incorporation of key 4G LTE facilities that makes network integration seamless. All are important for process and automation industries as well as supply chains management.

So can 5G benefit industry, and how can it take advantage of this opportunity?

A critical advantage of the 5G standard is that it incorporates the low power wide area network technology (LPWAN), that is LTE-M and NB-IoT, initially established within the 4G LTE standard. These enable the delivery of low-cost, low-throughput connectivity for popular industrial IoT use cases, such as connected sensors, meters, and asset tracking, using wireless, SIM-secured devices.

This helps operations managers to install many more IoT devices on their premises to monitor, analyze and optimize the way their facilities and production lines work. However, some have been wary about using public cellular networks, because of the perceived risks of relying on a third party for their critical infrastructure.

One way around this issue is for enterprises to establish a single dedicated 5G network tailored to their needs. For example, a car manufacture could use 5G’s mMTC (Massive Machine-Type Communications) to connect massive numbers of industrial IoT sensors to an enterprise cloud, the eMBB (enhanced Mobile Broadband) to deliver high-speed wireless connectivity for broadband IoT devices, and the uRLLC (Ultra-Reliable Low Latency Communication) to provide the critical IoT connectivity needed to control industrial robots. It might also want to stay connected to its cars after they leave the factory so that it can provide services to them in car dealerships and when they are with their ultimate owners.

Enabling 5G’s three technological pillars – mMTC, eMBB, uRLLC – requires enough wireless spectrum in the appropriate frequency bands, the mobile network infrastructure to use it, and fit for purpose devices. Broadband IoT needs quite a lot of spectrum, at either sub-6GHz or millimeter-wave frequencies, to deliver high throughput. Massive IoT generally uses sub-2GHz frequency bands to deliver good coverage at low data rates. And critical IoT connectivity demands less interfered spectrum bands to achieve a highly synchronized network that can achieve end-to-end latencies of less than 5ms.

Private companies that want to use 5G may be prepared to build and run a network themselves or to build it but outsource its operation to a mobile network operator (MNO). Alternatively, they could rely on a public 5G MNO for part or all of their network infrastructure. For example, they could share a public operator’s 5G radio access network (RAN) but retain control of their private network’s user plane and services. They could rely on the public 5G operator to provide and manage both the RAN and the control plane. Or they could have the entire private network run for them on a dedicated slice of the public MNO’s network.

Each approach has tradeoffs, in terms of operational factors such as service availability and support costs, and reputational factors such as privacy, security and control. If these can be mitigated through good contracting, then implementing a 5G private network can become a catalyst for further digitalization of industrial processes – and the associated gains.

Early case studies suggest that applying 5G to the factory floor can boost productivity by two per cent. Ericsson separately reports that digital transformation can boost a company’s bottom line, with revenue growing two to three per cent due to increased throughput, and costs falling 9-18 per cent due to better capital efficiency.

With the world reeling in the wake of the pandemic, the pressure to boost global productivity and to contribute to economic recovery will accelerate the digitalization of industry. 5G networks will be a critical enabler of this trend.    

Learn more about 5G.

Sylvia Lu

Sylvia Lu

Head of Technology Strategy, Product Center Cellular


You might also be interested in