Private networks for manufacturing – leveraging 4G and 5G. What’s the role of MNOs?

Iskratel is a venerable vendor, with a long history of solution design and delivery. Its site in Kranj – a charming town, with wonderful architecture and glorious views of mountains – includes a factory, which was the main focus of my visit. Unlike many of its competitors, Iskratel still manufactures hardware, providing specialist production facilities for circuit boards. As such, the factory provides an ideal test-bed for innovation in what has become one of today’s hottest topics – the connected factory.

Analysts and consultants, such as Arthur D Little have explored this area in depth, identifying a clear commercial opportunity for MNOs. Our visit to Iskratel provided some insights and lessons into how this market may take shape.

Non-public networks for factories

Connected factories have attracted attention because they are seen as one of the most compelling sectors for new wireless connectivity, enabled by 5G. Industrial players, such as Bosch and Siemens, have spoken extensively about the new automation and control that can be enabled, once the low latency performance that 5G URLLC offers is available. As a result, many such enterprises have begun to explore the opportunity for deploying private networks, to ensure dedicated coverage.

Some regulators have been supportive – notably in Germany, the UK and the US. Unsurprisingly, many MNOs have also entered the fray. While companies of the size and scale of Siemens and Bosch may be capable of running their own campus or non-public networks (NPNs), others may be less so, a point to which we shall return. MNOs see this as an opportunity, eagerly eying the potential to extend their markets by building and managing NPNs for actors across different sectors.

Vendor and manufacturer – the unique position of Iskratel

Iskratel, which combines manufacturing with its perhaps more visible role as a vendor and systems integrator, is well aware of this growing attention – and, given that it actually owns and operates a factory, decided that the factory could become its own test lab. The company built a private LTE network within the factory, providing dedicated high-speed wireless connectivity, throughout the available floor space.

The manufacture of printed circuit boards requires great precision and continuous quality control. Because Iskratel produces these boards under contract, it does so according to different specifications, necessitating frequent changes to the quality control parameters and performance metrics. Margins can be tight, as competition from Asia is intense. Ensuring consistency, while meeting demanding timescales, is crucial. So, it’s a challenging environment in which there’s no room for error. Faults cost money, as does the time to recognise that there is a deviation from expected performance and quality levels.

Collecting real-time data from different systems in the production line and workflow has become essential to maintaining competitive edge, protecting margins and ensuring consistency. Doing this wirelessly offers advantages, as it simplifies infrastructure and allows for a more flexible environment. The private, local LTE network that Iskratel has deployed enables efficient data collection and transformation, with centralised monitoring of processes and equipment from the factory floor.

As such, the factory provides a working environment in which Iskratel can tweak and tune a complete private network. It allows optimisation of performance and provides benchmarks to be used in other such facilities. While requirements in other sites will differ, the principles will be similar. When 5G is available, that too can be deployed to increase the monitoring and control footprint.

Non-public networks – the future

Iskratel is clearly benefiting from the captive deployment. It’s using a real commercial venture to prove the efficacy of private networks, driven by the need to protect margins, enhance quality and improve efficiency. The factory is a proving ground, both conceptually and practically for the expected adoption of non-public networks in manufacturing. While many have deployed PoC or trial systems, this is a living, working lab in which results matter. As such, it’s not so much a showcase, as a genuine example of what NPNs can deliver.

Why does this matter? Well, as we have written, many MNOs see NPNs as a significant commercial opportunity and one of the key avenues through which they will monetise 5G investments. At the same time, many in industry do not believe that MNOs will truly understand their needs, because they may differ considerably. However, not all manufacturers have the scale to operate or deploy their own networks. And, it’s surely correct that many will have complex requirements that demand a deep understanding of the operational performance parameters.

Similarly, it’s probably also correct that many NPNs will have broadly similar requirements, so private networks to serve these needs could be delivered as slices from service templates by MNOs. However, it’s also likely that there’s a middle ground – in which specialised requirements can be delivered through collaboration between MNOs and a vendor.

It’s this space that Iskratel has explored. By proving that it can deliver bespoke capabilities to a mid-sized manufacturing plant, Iskratel has shown how it can meet such requirements, but in a way that would be beyond the capabilities of many similar-sized manufacturers.

NPN models and the role of the MNO

What does this mean for the expected rise of NPNs? Well, in this context, we can expect several key scenarios:

• Manufacturers with sufficient resources and scale deploy and operate their own networks, either with their own spectrum or spectrum leased from MNOs.
• Manufacturers adopt template NPNs, enabled by slicing, but deployed and operated by MNOs.
• MNOs work with specialist vendors and integrators to deliver more bespoke solutions, which are then operated by the MNO.
• Vendors and integrators deploy and manage networks independently.

There’s room for all of these – but MNOs need to be clear. They can try to do everything, but they probably won’t succeed. Instead, they should focus on:

1. Delivering template services, at scale.
2. Collaborating with vendor partners that have experience in specific verticals to ensure optimisation for differing requirements.
3. Providing open access to slices that can be managed by larger players, acting independently.

Iskratel’s example is instructive. It shows clearly how a vendor can deliver specialist capabilities and can collaborate with MNOs. This is likely to be extremely fertile ground, as manufacturers explore the opportunities presented by wireless local communications.

Once 5G SA matures, we can expect to see many such deployments. But, let’s not forget that LTE can deliver advantages today, while providing a foundation for embracing enhanced 5G wireless connectivity for manufacturing processes in the future.

For the time being, it’s clear that there are two key questions to answer. First, will MNOs accept that they can’t do everything themselves and that they must focus on partnerships to ensure they can capitalise on 5G investments? Second, how will the NPN value chain and ecosystem take shape?