By Viet Nguyen, Vice President of PR & Technology at 5G Americas (August 2024) – As the world races towards an increasingly connected future, the demands on our wireless networks are growing at an unprecedented pace. With 5G becoming the backbone of digital transformation across industries, the traditional models of network deployment are being stretched to their limits. Enter Neutral Host Networks (NHNs), a well-tested approach that promises to meet the rising demand for better connectivity and coverage in a more efficient and cost-effective manner. In “Neutral Host Opportunities for 5G & Beyond,” 5G Americas takes a look at how NHNs are not just an emerging trend—they represent a significant $8.7 billion market opportunity that could redefine the landscape of telecommunications.
What Are Neutral Host Networks?
Neutral Host Networks (NHNs) are shared wireless infrastructures that allow multiple network providers to offer connectivity and coverage across a variety of sectors, ranging from public venues to private enterprises. At their core, NHNs embody the principle of sharing: rather than each Mobile Network Operator (MNO) deploying its own separate infrastructure, a single NHN can serve multiple operators, thereby reducing redundancy, lowering costs, and improving service quality. This shared approach is particularly beneficial in locations where the cost of deploying individual networks would be prohibitively high, such as in-building systems for large venues, rural areas with low population density, or industrial sites with specialized connectivity needs.
The NHN model is flexible, supporting various levels of infrastructure sharing. This can range from basic site sharing, where different MNOs co-locate their equipment at the same site, to more integrated models like shared Radio Access Networks (RANs), where operators share not just the physical site but also the radio equipment and spectrum. This flexibility allows NHNs to be tailored to the specific needs of the location and the stakeholders involved, making them a versatile solution for the diverse challenges of modern connectivity.
NHNs work with one of 5G’s key strengths: the ability to provide network slicing. Network slicing is a virtualization technique that enables the creation of multiple virtual networks (slices) on top of a shared physical network infrastructure. This diagram below shows how slicing might operate in a shared neutral host environment.
The Market Potential
As mentioned, the global market for NHNs is poised for significant growth, with a projected value of $8.7 billion by 2028. This growth is driven by several key trends. First, the increasing demand for improved connectivity in various sectors is pushing MNOs and enterprises alike to explore new models of network deployment. Sectors like manufacturing, education, healthcare, and retail are all seeing a surge in demand for reliable, high-capacity wireless networks. For example, in manufacturing, companies are adopting NHNs to support the connectivity needs of Industry 4.0 applications, which require high levels of reliability and low latency. Similarly, educational institutions are leveraging NHNs to provide seamless connectivity across sprawling campuses, supporting the digital learning tools that have become essential in today’s education landscape.
Second, new enterprise-funded offerings from major MNOs are enabling the deployment of NHNs in locations that were previously not prioritized. These offerings allow enterprises to take a more active role in the deployment of network infrastructure, funding the installation of NHNs in exchange for improved connectivity and coverage. This model is particularly attractive to enterprises that operate in areas with poor network coverage, as it allows them to enhance their connectivity without waiting for MNOs to prioritize their location.
As you can see in the table below, there are several areas in enterprise-funded offerings where different enterprise ecosystem players can participate, when it comes to neutral host opportunities.
| OTT SERVICE PROVIDER | Value Creation: Enterprise applications/Software as a service (SAAS) Revenue: SAAS subscriptions Expenses: Software development and marketing |
|---|---|
| MNO | Value Creation: Core Network, Network Management, Spectrum Revenue: Line subscriptions, handset/accessory sales, enterprise services (i.e. Security As A Service). Expenses: Core Network, Network Management, Spectrum, Design Approvals, Marketing, Legal, signal sources (optional), network monitoring & reporting, customer support |
| OEM | Value Creation: Technical expertise, approved NHN equipment, turnkey services, customer support, IPR Revenue: Hardware and Software sales, Services, Support Expenses: R&D, Sales & Marketing, Legal, Engineering Resources |
| SYSTEM INTEGRATOR | Value Creation: Technical expertise, access to real-estate owners, installation/deployment, transport network (optional), technical services & support, multi-technology solutions Revenue: Turnkey solution fees, monitoring & support subscriptions, installation fees Expenses: NHN Network equipment (optional), engineering resources, sales & marketing, |
| REAL-ESTATE OWNER | Value Creation: Access to real-estate, focused use cases Revenue: Property rental, property services, building appreciation, VAS service access, Network Monitoring, Communication Services Expenses: Property acquisition & maintenance, NHN equipment, installation, support |
| ENTERPRISE | Value Creation: Access to service consumers Revenue: Business enabler, customer/guess experience, operational cost reductions Expenses: PNaaS/eNaaS subscriptions, NHN solution costs, design and installation fees |
The economic benefits of NHNs are also driving their adoption. By sharing infrastructure, NHNs can significantly reduce the cost of network deployment. This is particularly important in today’s economic climate, where MNOs are under increasing pressure to reduce capital expenditures while still meeting the growing demand for connectivity. NHNs offer a way to achieve this balance, providing a cost-effective solution that can be scaled to meet the needs of different environments. For instance, according to industry estimates, energy accounts for up to 40% of network OpEx, and shared NHN solutions can reduce this by up to 30% compared to traditional single-operator deployments.
The Shift in Network Architectures
The evolution of network sharing architectures is central to the growing adoption of NHNs. Traditional network deployment models, such as Distributed Antenna Systems (DAS), have long been used to extend coverage in large buildings and other challenging environments. However, these systems are often expensive and difficult to deploy, leading to a shift towards more flexible and cost-effective solutions like small cells and Open RAN.
Small cells are a key component of modern NHNs, offering a compact and scalable solution for improving coverage and capacity in specific areas. Unlike traditional macro cells, which cover large geographic areas, small cells are designed to provide targeted coverage in high-traffic areas or locations with poor signal penetration. This makes them ideal for use in NHNs, where they can be deployed to provide coverage in specific venues or to fill in gaps in the existing network.
Open RAN is another important development in the evolution of NHNs. By decoupling the hardware and software components of the RAN, Open RAN allows operators to use a mix of equipment from different vendors, reducing costs and increasing flexibility. This is particularly beneficial for NHNs, where the ability to mix and match components can help optimize performance and reduce deployment costs. Open RAN also supports virtualization, allowing network functions to be run on general-purpose hardware rather than specialized equipment. This further reduces costs and makes it easier to scale NHNs to meet changing demand.
The transition from traditional DAS to these more modern architectures is driven by the need for greater efficiency and lower costs. As the market for NHNs continues to grow, the adoption of these new technologies will be key to their success.
Challenges and Opportunities
While the potential of NHNs is clear, their widespread adoption is not without challenges. One of the most significant challenges is the decline in DAS equipment sales, which has been driven by a shift towards small cell approaches. While small cells offer many advantages, they also present challenges, particularly in terms of network management and coordination. Deploying a large number of small cells requires careful planning to avoid interference and ensure seamless coverage, particularly in dense urban environments.
Despite these challenges, there are also significant opportunities for NHNs. The growth of private networks is one such opportunity. Private networks, which are increasingly being adopted by enterprises and industrial sites, often require dedicated infrastructure that is separate from the public network. NHNs offer a way to meet this need by providing a shared infrastructure that can support both private and public networks. This not only reduces costs but also makes it easier for enterprises to manage their networks, as they can rely on a single provider for all their connectivity needs.
The availability of shared spectrum, such as the Citizens Broadband Radio Service (CBRS) in the United States, is another factor driving the adoption of NHNs. Shared spectrum allows multiple users to access the same frequency band, making it possible to deploy NHNs in areas where dedicated spectrum is not available. This is particularly important in urban areas, where spectrum is often in short supply.
The growing demand for Bring Your Own Device (BYOD) policies in enterprises is also contributing to the increased adoption of NHNs. As more employees use their personal devices for work, the need for robust and reliable indoor coverage has become critical. NHNs offer a solution to this challenge, providing the coverage needed to support BYOD policies while reducing the strain on the public network.
Looking Ahead: Preparing for 6G
As we look towards the future, it’s clear that NHNs will play a crucial role in the transition to 6G. As 5G networks evolve through 5G-Advanced, planning for 6G is already underway, and NHNs will need to be designed with the future in mind. This means supporting new technologies and applications that are expected to emerge in the coming years.
One of the key applications anticipated for 6G is immersive telepresence, which will allow users to interact with remote environments in real-time, creating a hyper-realistic experience. This will require extremely low latency and high bandwidth, both of which can be supported by NHNs. Similarly, digital twinning, which involves creating a virtual model of a physical system, will require robust and reliable connectivity that can be provided by NHNs.
Another important consideration for 6G is the need for new spectrum bands. As the demand for wireless connectivity continues to grow, new spectrum bands will be needed to support the increased traffic. NHNs will need to be designed to support these new bands, ensuring they remain relevant as the market evolves.
Conclusion
Neutral Host Networks are more than just a trend—they are a critical component of the future of connectivity. By offering shared infrastructure solutions, NHNs have the potential to close the connectivity gap, particularly in underserved areas, while driving down costs and improving service quality. However, success in this market will require careful consideration of the right technologies, clear economic logic, and collaboration across the entire supply chain.
As we continue to navigate this evolving landscape, the importance of innovation, standardization, and partnership cannot be overstated. I am looking forward to seeing how the wireless cellular ecosystem unlocks the full potential of NHNs and ensure that the benefits of 5G and beyond are realized by all.
