Completely different paths in the 5G private network market: Expansion of manufacturing giants and withdrawal of cloud computing giants
Recently, industrial giant Siemens announced the further expansion of its private 5G business. On the basis of covering many European countries, it officially included Canada as its first stop in North America and plans to enter the US market in the summer of 2026. Siemens claims that the enterprise's self - controllable private 5G infrastructure has become the "core pillar of AI - driven industrial automation". This move is not an isolated case. Almost simultaneously, Nokia won a key order in the Canadian mining industry, and the British government introduced six European private 5G experts through the Open Radio Access Network (RAN) plan. The global 5G private network track has been driven by diverse players from the start. After several years of practice, some players have exited the market, while others still insist on investing in it. Combining with the development of artificial intelligence, they are promoting the in - depth integration of 5G private networks into industrial strategies and supply chain reconstruction.
The "Dimensionality - Reducing" Entry and Global Expansion of Industrial Giants
Siemens' entry into the US 5G private network market is an epitome of its transformation from a globally leading industrial user to a system supplier. This path deeply reflects a logical path for the development of the 5G private network industry: in - depth understanding of demand gives rise to solutions tailored to scenarios.
As early as 2019, at the beginning of 5G commercialization, Siemens cooperated with Qualcomm in Germany to deploy a 5G Stand - Alone (SA) test network based on the 3.7 - 3.8GHz private network frequency band for the Automated Guided Vehicles (AGVs) in an automobile testing center. At this time, its role was that of a demander and tester of cutting - edge technology. By 2023, Siemens released its full - set industrial - grade 5G private network system, covering all components of the core network and radio access network (CU/DU/RU), running on its own industrial computers. The company claims that its 5G private network solution is "OT - level, compact, and user - friendly" and is specially designed for harsh industrial environments. It can be said that Siemens has completed the transformation from a demander to a demander + supplier.
Today, Siemens' private 5G private network system has been sold in more than a dozen countries and is about to enter the United States. Siemens leverages its advantages in the field of industrial automation and in - depth understanding of industrial scenarios to provide end - to - end solutions "built by the industrial community and for the industrial community". This includes not only hardware but also native support for industrial protocols, seamless integration with its own automation software, and industrial - grade network security protection. The CEO of Siemens Process Automation pointed out in a speech: "The industrial world deserves a 5G solution that can speak its language."
Siemens' case reveals a key trend: leading companies in vertical industries are leveraging their industry knowledge and customer channels to strongly enter the communication equipment market and become "industry - level suppliers" that cannot be ignored in the 5G private network ecosystem. This is different from traditional telecom equipment manufacturers or operators and is an industry transformation initiated from the demand side and from the bottom - up.
5G Private Networks Have Been in a Diverse Competition from the Start, but Market Differentiation Is Very Obvious
At the beginning of 5G commercialization, private networks became a key area contested by all parties. Different from the 5G public network industry ecosystem, which is a "duet" between traditional telecom equipment manufacturers and operators, private networks have formed a diversified camp from the start:
Firstly, the telecom sector includes operators and traditional equipment manufacturers (Nokia, Ericsson, Huawei, ZTE). Relying on their public network operation experience, full - set of technologies, and spectrum resources, they provide a full - set of services from virtual private networks (network slicing) to independent private networks.
Secondly, cloud service and Internet giants, represented by AWS, Microsoft Azure, and Google Cloud. They use cloud computing, edge computing, and software - defined capabilities to launch "turnkey" hosting services such as "AWS Private 5G", which are pre - integrated and can be quickly deployed, significantly reducing the technical and operational thresholds for private network deployment and focusing on convenience and flexibility.
Thirdly, vertical industry giants, with Siemens as a typical example. Starting from their own pain points, they create dedicated solutions highly suitable for their industries (such as manufacturing) and promote them to similar enterprises through their existing OT equipment sales channels, achieving in - depth integration of IT/OT/CT.
Fourthly, open RAN and professional suppliers, such as Accelleran, Benetel, IS - Wireless and a number of small and medium - sized professional companies focusing on private 5G RAN or core networks. They try to occupy a place in the wave of supply chain diversification by means of open interfaces and standardized test platforms.
In terms of technical routes, the development path of 5G private networks is seriously affected by local spectrum policies, resulting in the paths of independent private networks and virtual private networks. Among them, in the application of independent private networks, regulatory authorities allocate dedicated frequency bands to enterprises (such as 3.7 - 3.8GHz in Germany and 4.6 - 4.9GHz in Japan), and enterprises can build completely physically isolated networks. This path ensures the highest level of control, security, and performance certainty and is favored by large industrial enterprises. For example, Germany has issued hundreds of private network licenses, and Audi, BASF, Bosch, etc. are all active users. The virtual private network, represented by the current practice in China, has the advantages of rapid deployment, wide coverage, and full utilization of the existing network scale effect of operators.
Market data confirms the growth. The SNS Telecom & IT report estimates that the annual compound growth rate of global dedicated LTE/5G network infrastructure expenditure from 2023 to 2026 will be about 18%, and it will exceed $6.4 billion in 2026, of which 40% will be invested in independent 5G private networks. IoT Analytics data shows that the growth rate of IoT connections based on 5G private networks (65.4% annual compound) is much higher than that of public networks, and it is expected to account for 13% of the total number of 5G IoT connections in 2030.
Although the market is growing, there is a trend of differentiation among 5G private network suppliers, especially cloud service providers are quietly withdrawing from 5G private network services. In May 2025, AWS confirmed that it had stopped selling its 5G private network service launched in 2021. The company said that spectrum resource limitations and dependence on third - party hardware hindered the service development, and customers were turning to alternative solutions that better met their needs. Microsoft Azure also issued an announcement at the beginning of 2025, stating that its 5G private network core service would be deactivated on September 30, 2025. To prevent any service interruption, customers are requested to migrate to Microsoft's partner solutions before September 30, 2025.
The reasons are, on the one hand, that the 5G private network has not reached the initial market scale expectations, and on the other hand, AI has become the core focus, greatly squeezing 5G - related resources. Therefore, cloud service providers are continuously exiting this field.
However, the value of 5G private networks is still irreplaceable. In recent years, the application of 5G private networks has moved from the "periphery" to the "core", and its value has initially emerged. In the early days, private networks were mostly deployed in scenarios such as ports, stadiums, and office parks. Now, the application is penetrating into the core production links of industrial manufacturing. BMW's first global AI factory in Debrecen, Hungary, relies on a 5G hybrid network to support the real - time communication of nearly a thousand robots and an AI quality platform (AIQX). Nokia deployed a private network for the Côté Gold mine in Canada to remotely control autonomous trucks and drills, improving safety and efficiency. These cases show that 5G private networks are beginning to release irreplaceable value in supporting mobility (AGV/AMR), low - latency control (machine collaboration), massive connections (sensor networks), and integration with AI edge computing. Research shows that private networks can bring efficiency improvements or cost savings ranging from 20% to 90% in fields such as manufacturing and mining.
Looking forward, the integration of 5G private networks and AI is becoming a value multiplier. Whether it is Siemens positioning private 5G as the "pillar of AI - driven manufacturing", the practice of BMW's AI factory, or Verizon's cooperation with Nvidia emphasizing "5G private network + AI edge computing to achieve real - time AI applications", they all point to the same direction: the high - reliability, low - latency, and high - bandwidth connection provided by 5G private networks is the "digital artery" for the real - time collection and transmission of massive industrial data and the back - transmission of AI model edge inference. The combination of private networks and AI will make advanced applications such as real - time quality control, predictive maintenance, and adaptive production scheduling possible, truly driving intelligent upgrading.
Siemens' entry into the US 5G private network market is not only the market expansion of a single company but also a manifestation of the global 5G private network industry entering a new stage of in - depth competition and integration.
This article is from the WeChat official account "Internet of Things Think Tank" (ID: iot101), author: Zhao Xiaofei. Republished by 36Kr with authorization.