Author: Rose de Fremery
Date published: August 19, 2024
Enterprises are rapidly increasing their investments in private wireless networks. According to research firm Analysys Mason, enterprises' total spending on private LTE and 5G networks will reach $9 billion worldwide in 2028, expanding at a compound annual growth rate of 48% between 2021 and 2027.
As private wireless network adoption accelerates, business leaders are exploring which kinds of implementation will best suit the use cases they have in mind. As part of this planning, it is beneficial to understand the role of licensed vs. unlicensed spectrum in private wireless networks, the situations in which each type of spectrum is especially valuable and how to decide which one will enable the company's goals.
Private wireless networks are simply cellular wireless networks built for a private entity and use the electromagnetic spectrum to send and receive data. In the United States, the Federal Communications Commission (FCC) determines how this spectrum may be used and who can use it, divvying up the spectrum into sections that are approved for certain purposes, such as radio and television communications, and licensing portions to carriers. Enterprises that want to create a private wireless network in the U.S. will need to choose between licensed spectrum vs. unlicensed spectrum prior to implementation. Each type of spectrum offers unique advantages depending on the use case being contemplated.
As the name indicates, anyone seeking to transmit data on this portion of the spectrum must have an FCC license to do so. An enterprise would typically be assigned an underutilized portion of the licensed spectrum from a carrier or another authorized owner. The carrier remains the steward/custodian of the spectrum, used for the enterprise customer's service, and continues managing it as its own network.
Standard licensed spectrum is an ideal fit for enterprises whose private wireless network will require strong network performance. For example, an enterprise may be deploying an application that must have a guaranteed Quality of Service (QoS), high availability, low latency and tailored capacity. Since there is more licensed spectrum available than unlicensed spectrum, there is more potential to build out applications at scale—for example, industrial Internet of Things (IoT) applications involving large quantities of connected devices.
Another consideration for licensed vs. unlicensed spectrum is that enterprises can build a private wireless network that is secure and private on a portion of the licensed spectrum, however, they can expect to encounter some interference if they attempt to do so using unlicensed spectrum. Because licensed spectrum is carefully monitored, carriers are able to identify malicious actors quickly that may attempt to interfere with the information being sent and received, whether on their public or private networks. This may be an important factor for use cases in which both security and privacy are significant priorities.
Because licensed spectrum is also used for the public wireless network, technologies such as connected vehicles or intelligent supply chain tracking may need a device that is able to transmit data across the enterprise's private wireless network or the public network, depending on where the device happens to be.
Another option is unlicensed spectrum, specifically a lightly regulated form of shared spectrum known as Citizens Broadband Radio Service (CBRS), Tier 3—General Authorized Access (GAA). Tier 3 GAA spectrum is open to the public, so anyone is entitled to use it without a license. This means that users will have to share a limited amount of spectrum and the available shared spectrum may not be sufficient to support customer requirements to implement their use cases successfully. This is especially true as more and more CBRS spectrum deployments take place. Accordingly, anyone operating a private wireless network on the CBRS spectrum may encounter at least occasional interference, although the CBRS Spectrum Access System helps to manage spectrum sharing. Such interference can degrade the performance of a wireless connection and, in turn, negatively impact the performance of the technology that depends on it. If and when an enterprise runs into such interference, it won't have the same kind of recourse as it would with licensed spectrum.
CBRS spectrum can be considered an improvement over Wi-Fi for best-effort, localized applications. If some wireless interference is not a problem, then CBRS private networks may be adequate for certain enterprise use cases. Unlicensed spectrum may also be sufficient for applications that do not have significant latency or reliability requirements.
Depending on the type of private wireless network being built, an enterprise may prefer licensed vs. unlicensed spectrum or vice versa. Licensed spectrum could be the better choice when an enterprise needs to support business-critical or mission-critical use cases. These use cases could benefit from licensed spectrum for high reliability, high bandwidth, and low latency. For example, enterprises planning to build private wireless networks that will rapidly and reliably transmit large volumes of data, such as a transportation company that wants to enable video-based loss prevention or a manufacturer that wishes to create a digital twin, may want to use licensed spectrum because of the potential for reduced congestion and interference versus using unlicensed spectrum.
On the other hand, unlicensed spectrum, like CBRS, may be perfectly fine in situations where an enterprise needs something akin to Wi-Fi network performance but could benefit from a much broader range of coverage than Wi-Fi allows. If cost is a key factor, then unlicensed spectrum may be a more suitable choice.
Enterprises are recognizing the value of private wireless networks for helping to enable transformative technology such as industrial robotics and automated guided vehicles. As they prepare to create these networks, enterprises will need to decide between licensed vs. unlicensed spectrum, weighing the pros and cons of each option. By familiarizing themselves with what each type of spectrum has to offer, enterprise leaders can select the right option for their business requirements and confidently continue innovating for their customers.
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The author of this content is a paid contributor for Verizon.