SNS analyst says private networking could represent up to $1.5 billion of Ericsson's revenue by 2027
Ericsson's September event could focus on transportation, first responders and more
Mining remains a major part of Ericsson's private networking focus globally
Could private networking become a canary in the coalmine – showing the health of Ericsson – as the Swedish telecoms supplier tries to move further into the field?
According to Dell’Oro Group, Ericsson is the third ranked vendor in the 4G and 5G private networking space, after top-ranked Huawei and Nokia in second place. Private networking – literally installing standalone radios and a core network onsite for a business – is a smaller part of the radio access network (RAN) sector than widescale public RAN deployments, but it is growing in importance, according to analysts.
“We believe Ericsson's annual revenue in the private 4G/5G networking space is in the high $100s of millions,” Asad Khan, research director of 5G and wireless networks at SNS Telecom and IT, told Fierce in an email. “We anticipate it to reach as high as $1.5 billion by the end of 2027.”
“We're hoping to hear more about [private networking] in Ericsson's quarterly briefing at the end of August as well as at the upcoming analyst day on September 12,” the analyst said.
Ericsson bought Cradlepoint in 2020 as part of an edge and enterprise-based push that will continue in spite of the public RAN downturn.
“I think [the September 12 event] will be more around go-to-market tie-up with Ericsson's radio know-how and Cradlepoint's ability to target the enterprise, especially the critical industries, transportation, blue light use cases (law enforcement, emergency services), state and local government, and [the education sector], where Cradlepoint has strength,” AvidThink principal analyst Roy Chua commented in an email.
Moving out of carpeted space
On a broader scale, Ericsson can point to its know-how in developing 4G and 5G private networking for mining in particular as a selling point for larger private projects. The vendor has been hard at work on this since at least 2020, if not earlier.
“Mining is a high priority vertical for the Swedish telecommunications giant, particularly in resource-rich national markets,” SNS’s Khan noted.
Some of Ericsson's other private cellular deployments in the mining vertical include Boliden's Aitik copper mine and Kankberg gold mine (Sweden), Roy Hill's iron ore mine (Australia), South32's Cannington silver and lead mine (Australia), Agnico Eagle Mines' Detour Lake mine and LaRonde gold mining complex (Canada), Nutrien's potash mines in Saskatchewan (Canada), and Ero Copper's Caraíba underground mining operations in Bahia (Brazil), the analyst said.
Khan highlighted the 5G trial and ongoing rollout at the Cadia mine in Australia, which is run by Newmount, the world’s largest gold mining company. “Newmont also uses Ericsson-supplied private cellular equipment at its Lihir gold mine in Papua New Guinea to allow for greater levels of mining safety, tele-remote operation and automation,” the analyst said.