Russia’s Norilsk Nickel to deploy private 5G network without a network operator

Russian metallurgy company Norilsk Nickel is considering applying for a license to use 5G frequencies, reports Comnews.ru citing CEO Alexander Kudinov’s remarks during the GSMA Mobile 360 ​​Eurasia conference in Russia last week.  The company plans to deploy a private 5G network on its own, without cooperating with any telecommunications network operator.

Norilsk Nickel is interested in working with equipment vendors directly. The idea of deploying a private 5G network independently is based on security rather than economic issues.

“At Norilsk Nickel, work directly with the vendor is being worked out very actively. We are considering this model not for economic reasons, but from the point of view of IT security. But such a model of cooperation cannot exist at the moment. There are many incomprehensible points in the law that the government still has. In my opinion, operators have more experience. But Norilsk Nickel is interested in working directly with vendors, “emphasizes Alexander Kudinov.

Dmitry Lakontsev, head of the Skoltech-based NTI Competence Center for wireless communication or the Internet of Things, emphasizes that there is no threat to the operators’ business. Vice versa. The more companies build 5G networks, the higher the demand for equipment will be. And this, in turn, will lead to the growth of the entire industry through additional investment. “It is also worth recalling that it is the industry that gets the maximum effect from the introduction of 5G. Therefore, the creation of private mobile 5G / LTE networks by the enterprises themselves is quite logical,” he says.

According to Dmitry Lakontsev, most companies note such advantages of private networks as full control over data that does not leave the enterprise network perimeter, exact correspondence of the network to use scenarios and the radio environment of the enterprise, and quick setup, reconfiguration and expansion when needs change. In addition, private networks have such advantages as the further development of their own distributed computing resources, at the right point, at the right time, with the necessary characteristics and guaranteed reliability. Also, a private mobile network is a strategic asset of the enterprise and an essential competence.

The disadvantages of private networks are the need to create new competencies for the deployment, optimization and operation of mobile networks, the cost of building a new network and wireless infrastructure, as well as, emphasizes Dmitry Lakontsev, its maintenance and updating. Due to the lack of economies of scale, the purchase of equipment and services takes place on less favorable terms than for mobile operators and owners of a tower business (infrastructure operator). Also the disadvantage is the need to meet the requirements of regulators, which for private 5G networks are still vague and lagging behind technological progress.

At the same time, Dmitry Lakontsev notes, obtaining a license, as a rule, is one of the smallest lines in expenses. To create your own communications infrastructure, you need serious money and relevant competencies. Not all companies can afford it, so this story is unlikely to be massive. However, the demand for private networks is and is only growing, mainly from the largest enterprises. Globally, we are talking about thousands of installations, and on a Russian scale, about dozens, which is quite a lot.

Semyon Zakharov, Director of Project Implementation for Corporate Business of MegaFon PJSC, emphasizes that the operator sees a great interest in private LTE and 5G networks from the corporate market.

The participation of the telecom operator in the construction of private LTE / 5G will allow corporate clients to avoid mistakes when planning a network, taking into account the peculiarities of the territory in which the enterprise is located and the tasks that it faces. “For the same reason, it is more profitable for companies to transfer the operation of networks to operators. If an enterprise builds a network on its own, it must not only obtain frequencies, but also legalize the network itself, carry out radio control and other necessary processes. As a result, the network becomes a non-core asset, which requires significant financial and human resources. Over time, the majority of enterprises give up such non-core activities,” said Semyon Zakharov.

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In the U.S., electric utility provider Evergy (covering Kansas and Missouri) has announced plans to deploy its own private wireless LTE network.  Evergy and Anterix today announced the signing of an agreement providing Evergy the use of Anterix’s 900 MHz broadband spectrum throughout Evergy’s 28,130-square mile service territory in Kansas and Missouri. The long-term lease agreement is for 20 years, with two 10-year renewal options.
Evergy plans to utilize the Anterix spectrum to deploy a private wireless broadband communications network using LTE technology to support its grid modernization initiatives.
Light Reading’s Mike Dano wrote: “The new effort by utility provider  helps to yet again underscore the potential of private wireless networking, and the money that could eventually flood into the space. It also helps to explain why companies ranging from Ericsson to Rakuten to Microsoft to Verizon have been so interested in positioning themselves as providers for private wireless networks.”

References:

https://www.comnews.ru/content/216481/2021-09-17/2021-w37/nornikel-sdelaet-5g-dlya-sebya

https://www.telecompaper.com/news/norilsk-nickel-plans-own-private-5g-network-without-telecoms-operator–1397596

https://investors.anterix.com/news-and-views/Press-Releases/Press-Release/2021/Anterix-and-Evergy-Announce-Agreement-for-the-Long-Term-Lease-of-900-MHz-Spectrum-in-Kansas-and-Missouri/default.aspx

https://www.lightreading.com/private-networks/recalibrating-valuations-in-private-wireless-industry/a/d-id/772188?

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