Q: Is private 5G the new enterprise Wi-Fi? A: Don’t be silly

5G Wi-Fi
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Manufacturers are reportedly keen to dump Wi-Fi in favor of private 5G networks, but that doesn’t mean Wi-Fi’s days are numbered.

ITEM: 5G in 2019 could be good for something else besides home broadband – it could also serve a replacement for Wi-Fi networks in factories.

According to MIT Technology Review, manufacturers like Audi, BMW, Daimler, and Volkswagen are keen on 5G as a WLAN solution because they have big plans to transform their factory processes with new technologies like automation and advanced robotics – and their existing Wi-Fi networks just won’t cut it.

As an example, here’s Klaus Mittelbach, CEO of Zvei (Germany’s trade group of electrical and electronics manufacturers) telling Technology Review his idea of what a 5G factory should look like:

In this vision of an uber-modern factory, 5G would provide ubiquitous wireless connectivity so that sensors could be placed everywhere, workers could stream augmented-reality videos for guidance, and equipment could be moved easily to help managers experiment with different production methods and tailor operations to demand. As Mittelbach describes it, “The walls, roof, and factory floor will probably be the only fixed components left.”

To drill down further, the report says, Audi – which is trialing 5G with Ericsson in its Ingolstadt plant – currently uses a combo of Wi-Fi and Ethernet for its plants, but that environment is not conducive to, say, robots moving around the factory streaming data in real time. Audi is hoping that 5G can help unplug its robots for added flexibility.

This isn’t too surprising in the sense that vendors like Huawei, Ericsson and Nokia have been touting 5G as an Industry 4.0 enabler for some time now, with its ultra-fast broadband, mMTC and URLL capabilities practically tailored for next-gen smart factory scenarios.

What’s more interesting is that manufacturers are looking at 5G as a private network option over Wi-Fi, as opposed to waiting for operators to launch 5G and then using their networks.

5G enterprise customers could be a boon for network vendors banking on 5G to boost sales as operators get more cautious with their capex. According to the Technology Review article, Harbor Research says that the private 5G market could reach $356 billion (albeit by 2028, though that represents a 30% CAGR).

5G vs Wi-Fi

It may be tempting to conclude from all this that 5G could supplant Wi-Fi as the enterprise WLAN technology of choice.

Well, no. The death of Wi-Fi has been predicted numerous times, particularly with the rise of 4G and unlimited mobile data plans. And yet it lives.

There are a lot of reasons for this, many of them related to indoor coverage, the need for cellular offload and the fact that just about every consumer appliance in the IoT has a Wi-Fi chip in it.

In regards to 5G specifically, it’s worth noting Wi-Fi evolution hasn’t come to a reverent halt with the advent of 5G. The next iteration of Wi-Fi (802.11ax, aka Wi-Fi 6) is expected to deliver four times as much data to multiple clients simultaneously and cut latency by 75% once the standard is finalized by IEEE in late 2019, according to the Wi-Fi Alliance.

Meanwhile, the Wireless Broadband Association (WBA) considers Wi-Fi to be very much a part of the 5G ecosystem and has been pushing ecosystem players to work together to integrate Wi-Fi more seamlessly into 5G networks.

Also, as the TR article points out, private 5G as a Wi-Fi alternative comes with its own set of challenges – it’s comparatively more expensive (Harbor Research reckons the hardware alone for the smart factory scenarios above will cost around $100,000), and it takes a different kind of expertise to plan and operate.

Also – and perhaps most importantly – unlike Wi-Fi, 5G spectrum isn’t free. That may depend on local 5G regulations and policies – in Hong Kong, for example, the Communications Authority will be allocating 5G licenses for millimeter-wave bands free of charge, and has reserved some spectrum for industrial/campus use. But enterprises opting for private 5G will have to go to the trouble of getting a license first, and in most markets they’ll probably have to pay for it.

This is potentially good news for operators who are counting on verticals as a key 5G customer segment. Private 5G networks might theoretically deprive them of big vertical customers – on the other hand, it’s an opportunity for cellcos to step in and offer to run it for them and throw in the spectrum that they just happen to have a license for, because if there’s one thing telcos know better than anyone, it’s how to run a cellular network.

Personally, I doubt that even manufacturers adopting 5G for smart factories will dump Wi-Fi completely – they’ll still use it in the offices, and may even use it in the factories for non-critical communications, if only because it’s the nature of enterprises to keep using legacy comms gear as long as it’s paid for and still works (something else that telcos know better than anyone).

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