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Summary

At Nokia's Analyst Relations event, held in November, the Finnish vendor made several announcements, covering areas as wide-ranging as 5G (including the best 5G demo this analyst has seen so far) and its strategy for the enterprise market. One topic in particular was frequently mentioned during the event: the market potential of private networks for enterprises. This is in some way an intersection of Nokia's traditional market of telecoms equipment for CSPs and its more recent enterprise segment.

The rise of Industry 4.0 creates opportunity for private networks

As we enter 2019, the industry is focusing on delivering on the promise of 5G. Among the many technology and business aspects of the new standard, the area of private networks seems to have been gaining traction, and Nokia has included it among the opportunities it will pursue for both 4G and 5G.

Nokia has identified private networks as an opportunity in the enterprise market, via partnerships with CSPs or by selling directly to large enterprises. Private networks can be targeted at one or more customer sites with high requirements for availability, throughput, latency, and security. Nokia says the US is its prime target, given the availability of unlicensed spectrum in the CBRS band, and it foresees offering private LTE (and eventually 5G) over licensed and unlicensed spectrum.

Outside of connectivity, many of the verticals Nokia is targeting have a strong fit with Latin America, in particular manufacturing, automotive, mining, logistics, utilities, agriculture, and smart cities. According to Ovum's IoT Enterprise Insights 2018/19 survey, around 40% of Latin American enterprises are trialing IoT solutions. In this context, Nokia will find an interesting potential market for its private LTE solutions.

As Latin American enterprises test sophisticated technologies such as automation and robotics in the context of Industry 4.0, Wi-Fi and wireline networks will start to show their limitations, creating demand that Nokia can address by supplying private networks to enterprises, directly or via CSPs. In the short term, 4G will provide an improvement in mobility and performance, but once 5G is mature and network slicing is ready, the gains in low latency and reliability will grow exponentially.

Appendix

Further reading

"Nokia bases its network supplier strategy on openness, end-to-end, and being ready," SPT002-000147 (November 2018) 

Author

Ari Lopes, Principal Analyst, Latin America

ari.lopes@ovum.com

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