Private wireless has been one of the areas with so much growth potential and promise. Many smaller companies entered the space with big ideas. The problem was many were smaller companies without a lot of cash flow. New sectors take time. While the idea of private wireless is sound, and can serve enterprise and government, there are several weak areas as well. So, let’s take a closer look at private wireless today and tomorrow.
First, we need to better understand the strengths and weaknesses. It is important to pull the camera back and get a longer-term, historical perspective on this sector, its opportunities and the real risks.
Private wireless will augment, not replace public wireless and Wi-Fi
Private wireless is a new technology that is both needed and wanted by the enterprise, companies and governments. They want to build their own, private wireless communications network to augment what they are currently doing. Think stadiums, college campuses, hospitals and sprawling business campuses as just a few examples.
Today, they use technology like public wireless and wi-fi. This will not go away. Private wireless will just be added to the list of technologies they use.
So, while the idea of private wireless is still new, it makes sense, and it will grow. Getting there is the challenge.
Let me make myself clear. I do not believe private wireless will replace wi-fi and public wireless. Rather, this gives us another tool to use.
Private wireless offers more control, speed and security
Private wireless does not negatively impact the wireless industry. Rather, it builds on it and expands on it. The fact is, there is a need and a place for all of this wireless communications technology and more.
The need was created because the current solution worked but was not good enough. Today, public wireless and technologies like Wi-Fi are what the marketplace uses.
While this works, the enterprise needs more control, more speed and more security. In fact, many times it can be difficult for separate networks to easily share voice and information or data just using public wireless networks.
Think of this like the Ford Model T. It too worked, but we kept improving the automobile industry year after year. Same thing with wireless.
AT&T, T-Mobile, Verizon, US Cellular offer private wireless services
Public wireless providers like AT&T Mobility, T-Mobile, Verizon Wireless, US Cellular and others were not offering the kind of privacy, security, speed and control the enterprise both wants and in fact needs.
So, while public wireless is fine for the public, business, government and enterprise are demanding more.
That’s why these wireless carriers are entering the private wireless space as well as smaller providers. They are using their public wireless network to offer private wireless version.
This started as CEOs of smaller companies discovered the problem with public wireless and wi-fi and decided to create the private wireless space.
Problem with private wireless is a confused mind says no
In this new sector, there are a growing number of competitors, large and small. Another problem is there are different levels of service. Still, another problem is they all use different language, words and terms.
Too many competitors make it difficult for the enterprise customer who is struggling to understand all the different terms, choices and technologies, and to make an informed decision.
I believe the idea of private wireless is needed. It is not going away. It is just taking the same course we saw happen in other sectors.
Even bankruptcies do not mean there is not a place for private wireless. It’s just the new industry paring itself down to healthy players. This is normal.
One key problem is many smaller companies with big ideas do not have the cash on hand to deal with the long growth cycle. They often fail or get acquired.
Another problem is the confusion between different types of private wireless is slowing the forward momentum. This is causing financial issues for many smaller companies who do not yet have a strong cash flow or industry position.
Private wireless partnerships, acquisitions and bankruptcies
We have already started to see some new and interesting things happen. Larger companies like Qualcomm, who want to be a player in private wireless, announced a partnership with a firm called Betacom.
The partnership gave Qualcomm the ability to enter this new space. It also gave Betacom the brand name power they needed.
Going forward, I expect to see more of this kind of partnership develop between many companies in the industry.
Next, we are starting to see M&A. Brand named larger companies with deeper pockets, but without name recognition in this sector are starting to acquire smaller providers, who were strong on product and solution, but not with cash flow.
Juniper Networks was acquired by HPE; Boldyn Networks acquired Edzcom
As an example, consider the merger of HPE and Juniper Networks. Or Boldyn Networks in the U.K. which acquired the private wireless business Edzcom from Spanish tower company Cellnex Telecom.
Juniper Networks has a great idea, but they don’t have the deep pockets. That’s why HPE acquired them. Now they can continue under the HPE brand name.
Now, we are even starting to see bankruptcies from stand-alone companies. This will continue with smaller and weaker companies who do not have a partner with deep pockets.
Recently, news of Casa Systems filed for Chapter 11 bankruptcy and agreed to sell off their 5G assets to Canadian company Lumine Group.
I expect to see more of this as well as we move forward.
This is the way new sectors emerge. They start with a growing number of small companies with big ideas. Over time, the wave of consolidation reduced the number of competitors who at the same time get larger and stronger.
Three areas private wireless needs to focus on to get stronger
Bottom line on private wireless: It remains a solid idea which can continue to grow. That being said, I also believe there will be a natural course the industry will take as it continues to prune itself moving forward.
Plus, existing players must do certain things differently and better going forward.
First, they must financially stabilize their business. That means most smaller companies must partner with or be acquired by larger ones.
Second, players in this private wireless sector need to develop a common language the customer, investor and media can understand and compare.
Third, companies in different sectors need to be clear, so the customer better understands the private wireless segment.
Private wireless takes similar path to wireless and cable TV
Today, there are many different sectors like private wireless services being offered by public wireless networks like AT&T, T-Mobile, Verizon, US Cellular and more. Plus, the variety of other sectors from a complete wireless network to parts.
The wide variety of companies and offerings do not use a coming vocabulary. That being said, a confused mind says no. This will slow forward momentum of private wireless.
Private wireless is following a typical growth path as every other successful sector has done. It starts with a wide variety of smaller providers. Then the larger companies enter. Then players start to consolidate into fewer and larger competitors. Over time we ultimately end up with few, large competitors.
This same thing happened with wireless and cable TV over the past few decades.
In order to win, your company must be noticed in a busy marketplace
That is why I don’t believe these bankruptcies mean private wireless is going away. Rather, it is just moving to the next chapter in the ongoing story.
It is part of the pruning process every growth industry goes through.
This should be a big wake-up call to every company in the crowded space. You must be found and get noticed to survive. That means you must be seen and heard.
Cisco, Celona, Federated Wireless, Shabodi, Huawei in private wireless
The companies who remain, are the companies we need to focus on. These are who investors, customers, workers, the media and so on are interested in.
There are many players in the private wireless space, larger and small including Cisco, Intel, Celona, Federated Wireless, Ericsson, NTT, Cradlepoint, Shabodi, Nokia, Samsung, HPE with Juniper Networks, Huawei, ZTE and so many others as well.
The question today is determining which companies will be the long-term winners, which will be acquired, which will struggle and which will fail. However, private wireless is needed and has a strong potential moving forward.
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