Every private 4G/5G deployment turns a profit in Industry 4.0, says Nokia

Nokia has polled 100 industrial enterprises with their own 4G/5G networks and found that the business case for private cellular is universally good, it has said. More than this, the Finnish vendor claims its limited sample of early-adopters, randomly picked from across the industrial market, shows the business case is a “no-brainer” (Nokia’s words, from a separate briefing). All of them have scaled their deployments either horizontally to new sites or vertically with new applications, it said, and all of them have seen a return on their investment (ROI) within two years of installing a private 4G/5G system. 

Indeed, almost four-fifths (78 percent) said they’d covered their initial investment costs within six months; a couple of respondents even said they’d made their money back within a week, just by replacing failing Wi-Fi connectivity. In sum, the no-brainer claim is broadly based on the ROI findings – that 23 percent of respondents claimed a positive ROI within one month, 78 percent (plus 55 percent) claimed a positive ROI within six months, 93 percent (plus 15 percent) saw it within 12 months, and all (100 percent; plus seven percent) saw it within 24 months.

The survey, conducted on behalf of Nokia by research firm GlobalData, quizzed 100 large-sized enterprises in Australia, France, Japan, the UK, and the US. It featured a ‘barring question’ that precluded enterprises without private networks from responding – so qualifying respondents as ‘early adopters’ in the sector. In the end, 85 (percent of) respondents hailed from the manufacturing sector (44 in discrete manufacturing; 31 percent in process manufacturing, including petrochemical and oil-and-gas production); the rest were from the ports and logistics industries.

Respondents were not (necessarily) Nokia customers. The findings, published in Nokia’s latest Industrial Digitalization Report, compared its findings from a similar poll two years ago. The new sample split roughly three ways between companies that have been working with their private 4G/5G systems for less than 12 months (34/100), for between 12 and 24 months (38/100), and for over 24 months (28/100). Of these, it found “100 percent [have] expanded private wireless networks usage or deployed them within another location”. A rather subtle stat says 45 percent are using their 4G/5G networks for more than they had set out to (“more use cases than planned”).

Why so? The survey says that private 4G/5G has “helped… [to fix] broken processes and [reduce] the overall cost of doing business”. Around two thirds (65 percent) of respondents claimed at least a 10 percent improvement in worker safety, by deploying geofencing technology, connected worker solutions, and robotics in place of dangerous manual work; four fifths (79 percent) claimed at least a 10 percent reduction in their carbon emissions, mostly with industrial IoT monitoring devices, but also with drone technology, for instance, to reduce truck rolls. Apparently, two in five (39 percent) of early adopters have used private cellular as a stepping-off point to invest in additional edge tech.

Half of the rest (52 percent) are planning to deploy on-prem edge technology in due course – meaning nine in 10 perceive an inherent linkage between edge-based networking, computing, sensing, and analytics technologies. The association of these edge technologies is conspicuous in Nokia’s MXIE and Nokia ONE edge bundles, which incorporate its private 4G/5G system as standard. It stated: “For example, the introduction of video analytics to a private wireless network alongside edge-compute resources enabled 75 percent of businesses to improve efficiency by 10 percent.”

A press statement quoted Lufthansa Technik, the aircraft services division of Lufthansa and one of the early Industry 4.0 pioneers in the new private networks game. The company has deployed private 4G/5G to enable remote ‘table inspections’ of aircraft components (“supporting remote maintenance via quick upload of high-quality video from multiple cameras”), and since expanded to connect other use cases (“such as using edge capabilities to eliminate the need of physically moving server stacks supporting AI analytics near to aircraft engines”).

Claudius Noak, IT consultant at Lufthansa Industry Solutions, commented: “Private wireless… gives a stable, reliable, and secure connection across an extensive area with only a small number of access points, essential for virtual table inspection. Additional value comes from the expansion and integration of new use cases. Since the deployment, we have extended the number of radio locations at the site, with private wireless networks connecting over 50 devices, a number that will soon grow into the hundreds, with the ability to ultimately support over 1,000 connected devices.”

David de Lancellotti, vice president of Nokia’s enterprise campus edge business, said: “The ROI of private wireless and industrial edge is proven. We help our customers improve worker safety, productivity, and reduce emissions while reducing operational costs by bundling private wireless and Wi-Fi connectivity, applications, and devices in one central on-premise edge platform. This will certainly drive the fast deployment of more use cases and lower the total cost of ownership.”

Gary Barton, research director for enterprise technology and services at GlobalData, said: “Private wireless technology has clear benefits for connectivity and great return of investment. But more is to come with the deployment of AI, new analytics tools, and edge platforms. These technologies will help enterprises prepare for the future challenges, as they keep driving industrial transformation.”