We get asked about private mobile networks frequently. For some reason the idea of enterprises running their own networks intrigues companies and investors. This week, we were listening to a new podcast, The Telco Podcast, and this episode did a great job of exploring many of the issues around the idea.

Private networks have been around for a long time, we just called them other things. For instance, in the US many utility operators run private networks to collect meter data. And in Europe, many railroad companies have operations that look a lot like private networks as well. We think the prominence of the idea now comes from all of the marketing around 5G. As we mention frequently, 5G does not offer many features that are easy to market – mostly moderate bandwidth increases. But 5G is important to the telecom operators, largely because of the flexibility it provides them for running their internal networks – something no consumer or enterprise much about. The operators, and more importantly, their equipment vendors are keen to promote 5G, and so one topic that comes up frequently is private networks (along with network slicing and reduced latency).

So it makes sense why private networks are such a common topic of conversation, but what benefits do they really provide? The case for these can be stated clearly, but do not really make commercial sense for most. Private networks provide the enterprises that operate them with complete control over their networks – they can manage the IT work, the security, the choice of location, and to some degree a choice of which spectrum to use. Straightforward enough, but running them comes with some significant cost. These operators have: to source spectrum (often from a public network operator); they have to pay for all the equipment – both the network and the end devices; and they have to manage the thing – which usually ends up being the hardest part. For most enterprises, all this overhead (both financial and mental) is too high, better to sign up with one of the public operators, who are experts in this after all.

That being said, there are enough cases where private networks make sense. In that podcast, they speak with someone who worked for oil and gas companies. These companies often operate far from civilized levels of cellular coverage – the middle of the Gulf of Mexico or West Texas. If you own thousands of acres of desert land, dotted with hundreds of well heads and miles of pipeline, private networks make a ton of sense. They allow for coverage, connectivity of everything, and easy communications across the area. This is true both for people and probably more importantly for all the sensors, compute clusters, cameras, drones and all the rest of the equipment.

Another important use case is security. Some enterprises need to ensure that only a very strict set of people can access the network. So in the US, probably the largest operator of private networks right now is the military. Military bases can be immense and remote, just like oil fields. And having a secure network, that only active personnel can access is important. True, the military already has all sorts of radio systems, but being able to use essentially off-the-shelf commercial equipment which offers significant bandwidth, can bring availability down very low levels of force structures. And this is to say nothing of having these available and fairly easy to set up on the battlefield.

Finally, another important aspect of private networks, is the ability to tie these networks directly into enterprises’ existing IT systems. One of the points brought up on the podcast was the extent to which the large oil and gas companies have been operating telecom networks for a long time, connecting Gulf drilling rigs with dedicated fiber lines. Easily adding wireless connections to those makes for a powerful combination.

Private networks are not for everyone, but for that small subset who do need them, they offer some powerful advantages.