With the 5G journey just beginning, disruption and innovation are already happening in the B2B segment and the role of telecom operators is changing.
5G and even existing 4G technologies are not just for providing silo communication services, but can be the bedrock to support advanced digitization and automation of industry core processes. Many successful campus networks have already been set up through partnerships with industrial customers, telcos and equipment vendors. The telco of the future will not just be a broadband/communication provider but will be a partner to jointly develop digitization and automation solutions.
Telcos collaborate with a growing number of customers in the transport and industrial sectors and more will come. Such customers include railways, utilities, and companies in sectors such as energy, utilities, transport and logistics, healthcare, as well as companies offering traffic management and drone operations.
In this article, we review how campus networks can be used as a tool to implement digitalization and automation solutions, and we provide two case studies from the transport and logistics sector.
Industrial campuses are where digitization and automation are happening
The places where digitization of industry production and processes happen are campuses, factories, warehouses, airports, ports, sorting and packaging facilities, etc. Such campuses are typically characterized by a large number of machines and humans working side by side, numerous moving parts or products, advanced process synchronization, and high standards of personnel and product safety required.
Communication between the machines and personnel/ personnel equipment (eg. laptops, tablets, etc) is traditionally implemented via local (LAN) based communication networks using Ethernet and wifi-based solutions. Although LAN can provide high-speed communication, it is limited to fixed devices and cannot be used in extreme environments such as high temperature areas (eg. factories producing steel, glass, etc) and environments with a large number of moving elements (eg. packaging and forwarding warehouses). While wifi is easy to install and use, it has a number of limitations. Typically, only a few dozen devices can be connected to a wifi network and the quality of wifi is unreliable, vulnerable to external factors (including interference from nearby wifi networks) and is a “best effort” network. This implies that wifi is unsuitable for machine or mission-critical data flows.
Telcos have a new role to play in enabling digitization and automation
Telcos have traditionally been considered as connectivity providers to industry, limited to providing high-speed external broadband and communication, but not seen as a potential solution provider for critical internal communication, overall campus digitization and process automation. Management of the telco interface usually falls under the technology domain of an industrial entity, (usually the CTO (Chief Technology Officer) or sometimes the CIO (Chief Information Officer)), who is responsible for many infrastructure and technology areas. The telco is effectively treated as an external cost center provider, with the aim of the relationship to obtain maximum services at the lowest cost.
Implementation of digitization, automation and the latest technological solutions in an industrial entity is typically carried out under the purview of the Business Unit Head (BU) or in some cases also the CDIO/CDO (Chief Information/Digitization Officer) with whom the telco doesn’t usually have a direct relationship.
With advances in 4G/5G technologies and the possibility to implement specialized campus networks, telcos can become active partners with the BU/CDIO/CDO to jointly develop solutions bringing in the best from communication technology (from the telco) to implement industry-specific digitization and automation solutions for the entity. Figure 2 illustrates the typical boundaries between the technology domain (under which the Telco usually offers its services) managed by the CTO/CIO, and the business domain managed by the BU Head/CDIO/CDO, where new value creation using campus networks-based solutions for digitization and automation is possible.
4G/5G based campus networks can provide the bedrock for industrial automation
Technology enabled by telcos can open up radically new ways of doing business. For the first time, telcos have a valid justification to talk directly with business unit heads and offer them potential new campus network-based solutions to further expand industrial productivity. In such a role, the telco does not just provide communication but facilitates digitization and automation solutions based on the latest technologies with large synergies with underlying telco infrastructure, resulting in lower costs to the industrial partner. In this mode, the telco moves out of its typical external cost center role to become a partnership-based ‘value creator’ to the industrial customer.
- 5G and even existing 4G are not just for providing silo communication services, but can be the bedrock to support advanced digitization and automation of the industrial customer’s core processes.
- Campus networks (4G or 5G) with shared (or own) spectrum can open up new use cases for automation and productivity enhancements. Usually, the telco has a lot of spare spectrum in the specific geography of the campus, which can be deployed exclusively in local industries and campuses at a much lower cost than if the company purchased or leased spectrum.
- Network slicing can enable sharing of infrastructure across multiple use cases, or even across multiple customers, while still maintaining ‘owner like’ security and quality control. Usually, a telco can build a common infrastructure layer to service multiple industries with synergies with the telco’s nationwide networks, providing exclusive network slices to the companies sharing the underlying infrastructure; hence it is able to operate it at a lower cost for the industrial partner.
- New spectrum (especially 3.5 GHz, 12/26/28 GHZ) is especially suited for campus networks, and in some countries, some of this spectrum is even being kept aside for industrial usage (eg. Germany 3.5 GHz). Most telcos have access to 3.5 GHz spectrum, which can be easily used to deploy dozens of specific regional campus networks.
Many successful campus networks have already been set up through partnerships with a number of industrial customers, telcos and equipment vendors. Some campus networks are set up primarily to provide high-quality personal communication and broadband access, for example in an airport or business park, which can leverage existing outside campus infrastructure of the telco (eg. numbering ranges, internet interconnection points, etc.). Other campus networks provide the bedrock connectivity that drives high-tech automation (eg. automated guided vehicles in a port or in a logistics center). We look at two case studies to demonstrate the potential for campus networks.
Case study: Campus network in Vienna Airport with A1 and Nokia
A1 and Nokia rolled out a pre-5G campus network in Vienna International Airport in 2021. The purpose of the network was to provide high-security communication for internal airport IT systems and mobile applications, as well as to provide high-speed broadband access to staff and passengers in the airport. Network slicing was implemented to ensure quality and security of all applications of the 5G network. Network slicing enables a common infrastructure network to be logically and even physically distinct, to support different underlying use cases with different quality and security parameters. In this case, the high-speed broadband provided to passengers does not interfere with the high-security network usage required by critical airport operations.
Tablets/mobile devices (both 4G and/or 5G enabled) are provided to staff to be able to connect to the campus network to perform their tasks. Many types of airport fixed equipment, mobile and hand-held equipment were also connected to the 5G campus network from check-in to baggage scanning to security checks, etc.
In addition, installation of virtualized computing resources enabled processing of critical computing tasks closer to the end user with reduced latency and higher security, without the need for data to leave the campus, which can lead to security breaches, higher latency, and additional external bandwidth requirements.
Case study: Campus network in Port of Rotterdam with Ericsson
Ericsson rolled out a LTE campus network at the Port of Rotterdam using 3.5 GHz spectrum, providing a highly secure, high-capacity and reliable communications network to support core port operations. This network supports the fleet of automatic guided vehicles (AGV) that handle almost all container movement in the fully automated port. Data communication between the customer application to the back-end servers, to the routing servers to the actual AGVs, is all handled by this campus network. The campus network also supports multiple other use cases, such as data communication to manned trucks, communication for ruggedized tablets used in the container stack and reefer area, and the provision of broadband to hundreds of laptops and other communication devices.
Traditionally an area stacked with containers would have very poor wifi (and even traditional mobile coverage) because of the high layers of steel all around the user blocking communication reception. But with clever planning and implementation, the campus network ensures a highly reliable communication network for all required use cases. The campus network is scalable and the port can add additional use cases or additional devices as the port grows.
Ericsson is meanwhile implementing 5G-based campus network solutions at other ports (eg. Port of Livorno, Italy) with use cases covering AR/VR applications, massive IoT (sensors on all stationary and moving equipment). These aim not just to reduce costs but also reduce the energy intensity of the operations
Conclusion: Telcos can play a key role in implementing campus networks to drive the industrial digitization agenda
The telco of the future need not be just a broadband/communication provider, but can be a partner to jointly develop digitization and automation solutions for industrial customers. Campus networks are a new tool to enable the implementation of such solutions. Industry CTOs/CIOs need to reconsider the role of the telco as just communication providers. Business unit heads/CDIOs/CDOs should be open to actively consult with telcos to explore new campus network-based solutions, and incorporate such solutions as a basis to radically expand their digitization and automation agenda.
The article is a follow up from the annual telecom, media and technology event held by Arthur D Little and Dentons on April 23, 2021. To receive the flagship report “Time to accelerate growth” that Arthur D Little presented at the event, please contact the authors of this article.