Private 5G Networks in Factories: When It Makes Sense

Private 5G networks are the connectivity proposal for industrial environments that don’t want to depend on public operators nor settle for Wi-Fi. High capacity, low latency, broad coverage, many connected devices, criticality slicing. After years of hype, in 2024 there are real installations with measurable metrics. This article covers architecture, comparison with alternatives, costs, and when investment makes sense.

What a Private 5G Is

A private 5G network is a radio + core deployment operated by the enterprise (or contracted provider) over dedicated spectrum. Modalities:

Private licensed spectrum: national allocations (Germany 3.7-3.8 GHz, Spain CPPRP 3.8-4.2 GHz). The company has exclusive rights.
Shared spectrum: CBRS in US, opportunistic use.
Slicing on public network: a “virtual slice” within the operator’s network. Less independent.

For serious industry, private licensed spectrum is the preferred option.

Typical Architecture

Elements:

Radio Access Network (RAN): antennas and radios distributed across the plant.
Edge core: the 5G core (UPF, AMF, SMF) on-site or near-edge to minimise latency.
SIM/eSIM management: manage device identities.
IT/OT system integration: usually over VLAN or IP.

Main providers: Nokia, Ericsson, Siemens + Nokia, Athonet (Hewlett Packard), Celona, Druid, Open RAN (Parallel Wireless, Mavenir).

Cases Where Private 5G Shines

Concrete scenarios with proven ROI:

Autonomous vehicles in large campuses: AGVs, mine trucks, drones. <20ms latency and reliable handover are key.
AR/VR for maintenance: augmented glasses with technical content served from the edge.
Large number of IoT sensors: thousands per km². 5G scales better than Wi-Fi at high density.
Mobile / outdoor plant: construction, ports, logistics over large areas without fixed infrastructure.
Redundancy and determinism: URLLC for critical control where losing packets is unacceptable.

Comparison with Wi-Fi 6/7

Aspect	Private 5G	Wi-Fi 6/6E/7
Range	Km (outdoor)	<100m typical
Latency	<20ms URLLC, <5ms ideal	5-30ms variable
Per-cell capacity	Thousands of devices	Hundreds
Determinism	High (with slicing)	Limited
Handover	Robust between cells	Weak
Capex cost	High	Moderate
Opex cost	Moderate	Low
Spectrum	Licensed / shared	Unlicensed ISM
Experience	New in enterprise	Mature

Wi-Fi 6/7 remains the default for office/limited-industrial environments. Private 5G wins in outdoor coverage, high mobility, critical determinism.

Real Cases with Metrics

BMW Regensburg: private 5G for AGVs in plant. +5% productivity from fewer stops.
Bosch Stuttgart: AR for maintenance. ~20% repair-time reduction.
Port of Hamburg: terminal container operation with AGVs, ship communications.
Lufthansa Technik: AR for engine inspection.
Ericsson USA factory: their own private 5G as demo — all-robot connectivity.

Typical ROIs in papers: 12-36 months for well-designed cases.

Obstacles

Honestly:

High startup cost: typical initial deployment €500k-2M for mid-size plant.
Scarce talent: 5G radio + core + industrial engineers are few.
Legacy OT integration requires gateways.
Compliance and spectrum: bureaucratic process per country.
Technical depreciation: 5G evolves (Rel-17, 18, 19), not all hardware is upgradable.

Spectrum: The Political Variable

In Spain, CNMC and MITECO manage allocations:

3.8-4.2 GHz spectrum for “local private networks” under regulation.
Process: apply for licence per location, with deadlines.
Cost: moderate fees vs commercial public.

In Germany, BNetzA has a more mature framework with 3.7-3.8 GHz “Campus Networks” allocations since 2019. Thousands of licences granted.

Open RAN: Lowers Entry Barrier

Open RAN (open specifications for radio + core) reduces dependence on Nokia/Ericsson:

Alternative providers: Parallel Wireless, Mavenir, Altran, dozens more.
Interchangeable components: radio from one vendor, core from another.
Lower cost with commoditised equipment.
Challenge: more complex integration and operation.

Companies betting on Open RAN in private deployments: Telefónica, Deutsche Telekom (pilots), Dish (US).

Co-located Edge Compute

Private 5G without edge compute under-exploits the investment. Typical pattern:

5G core + MEC (Multi-access Edge Computing) in same rack.
Edge Kubernetes for industrial workloads.
AI/ML inference near sensors for minimal latency.
Central IT integration via MPLS, SD-WAN.

References: Azure Private MEC, AWS Outposts + Private 5G, Red Hat OpenShift at edge.

When It DOESN’T Make Sense

Honestly:

Plant <50 connected devices: Wi-Fi 6 more efficient.
No real URLLC cases: if you don’t need <20ms latency, don’t pay the premium.
No significant mobility: cable + Wi-Fi covers.
No budget for sustained ops: 5G requires continuous expertise.

Project Planning

Realistic runbook:

Business case with specific cases and target metrics.
Radio site survey for coverage.
Spectrum process (parallelise with following).
Architecture design with chosen vendor.
Limited POC with 10-20 devices.
Progressive scale-up based on results.
Operation with internal team or managed partner.

Typical timeline: 12-18 months from business case to production.

Integration with Public 5G

Interesting pattern: dual SIM allowing in-campus private network and off-campus public network. Useful for mobile devices that leave and return.

Requires agreement with commercial operator and inter-network roaming. Not all setups support it.

Conclusion

Private 5G networks are real and have cases where ROI justifies investment — mainly large campuses with mobility, URLLC cases, or high device density. For most plants, Wi-Fi 6/7 remains the right choice. The decision should be based on concrete needs, not hype. Companies adopting private 5G without clear cases find high capex and low return; those adopting for real needs get significant operational advantages.