5G is synonymous with terms like network slicing, Software-Defined Networking (SDN), network automation, and network virtualization. All of these telecommunications industry concepts can pave the way for neutral host networks to be a popular deployment model for telcos, particularly Mobile Network Operators (MNOs). Neutral host providers allow MNOs to leverage shared network infrastructure, which translates to reduced Capital Expenditure (CAPEX), minimal operational costs, and quicker time to deploy new services. The latest trends in the private cellular network space point toward a future where neutral host networks are more widespread.
What Are Neutral Hosts?
A neutral host can be defined as a third-party mobile network provider that enables multiple wireless service providers to use its infrastructure, such as 5G cell towers and small cells. In other words, neutral hosts invest in telecommunications infrastructure, then lease it out on a shared-tenant basis.
The two types of neutral hosts classified in the telecommunications industry are spectrum-based neutral hosts and multi-operator Small Cell-as-a-Service (SCaaS) neutral hosts. Whereas spectrum-based neutral hosts are fully-fledged MNOs with their own spectrum resources and network infrastructure, SCaaS providers do not possess such things. Instead, SCaaS neutral hosts provide mobile network coverage by clustering various small cells together and sharing cellular backhaul. Alternatively, they may leverage one virtualized small cell that allows the radios to support different MNOs’ channels.
Current Drivers for Neutral Host Deployments
Increased demand for neutral host networks is a result of the following requirements:
- More Coverage & Capacity: As consumers and enterprises become more -digitally driven, higher network capacity and dedicated enterprise connectivity coverage become more important. To help meet this demand, neutral hosts will be more sought after.
- Cost Savings: Between current macroeconomic/geopolitical woes and the effects of the global COVID-19 pandemic, enterprises are bogged down with rising operating/production costs. Enterprises looking to reduce costs and push for further digitization will seek out 5G neutral hosts due to their budget-friendly price points.
- Resource Efficiency: Enterprises don't use as much energy by reusing existing cellular networking, which neutral host networks entail. That number can be as high as 1,000 Kilowatt Hours (kWh) per year, highlighting significant room for improvement. Furthermore, reusing existing infrastructure reduces the number of deployed devices, which means fewer resources are required for their production.
- Minimal Complexity: Companies want the most straightforward 5G networking solution possible, especially during economic ambiguity. Neutral hosts are an attractive option as the neutral host provider will manage the infrastructure on behalf of the enterprise customer.
Enterprises Use Cases for Neutral Host Networks
As for the use cases for neutral host networks, the best-suited enterprise verticals fall under the public services/education sector, events & hospitality, commercial real estate, and smart city applications. The following sections go into more detail on some of these use cases.
College Campuses and Public Education
Schools and universities are prime candidates for neutral host deployments, as they don’t need full ownership of the networking infrastructure, and their digitization budgets are scant. Projects from San Jose University and Duke University—in collaboration with mobile service and infrastructure providers like Celona, Internet2, DISH, and Cisco—have exemplified how neutral hosts enable new and innovative educational technology, while creating smarter and safer campuses.
Public Event Venues
Public events, such as sporting venues, concert halls, hospitality environments, and other event locations, are an intriguing option for the neutral host model. According to different voices in the telecommunications industry, highly dense areas like these generate more than three-quarters of all mobile network traffic. Existing public networks might not provide reliable enough connectivity for these use cases.
Moreover, public event venues often have various commercial entities operating there, which could “rent out” mobile services on-site from a neutral host provider. While Distributed Antenna Systems (DASs) would have been the go-to option historically, neutral host networks are a more reliable (on-demand and global coverage; see ABI Insight Making the Case for Deeper Partnerships between Neutral Host Providers and Communication Service Providers to Support Network-as-a-Service Deployments) and economical means of achieving private cellular connectivity.
Commercial Real Estate
In the commercial real estate sector, the growing interest in 5G neutral hosts stems from reasons of cost advantages and rapid service provision. Owners and managers of retail complexes and/or blocks of offices are allured by the idea of Virtual Private Networks (VPNs) via the neutral (also called “public” by building owners) host. They conceive that this will provide dedicated connectivity coverage that allows transmitting even business-sensitive/critical traffic.
College Campuses and Public Education
Neutral hosts will significantly knock down the costs of connectivity services, making deploying connected vehicle traffic, which optimizes first responder efforts, more realistic. For one thing, connected ambulances can communicate with traffic lights to ensure the light signals will change in order to create a right-of-way for emergency crews. Secondly, Vehicle-to-Vehicle (V2V) communication enabled by a neutral host network allows an ambulance to communicate with nearby cars so drivers are on the lookout. As a result, these use cases keep city streets safer, while helping first responders reach their destination as quickly as possible.
How 5G Neutral Hosts Change the Private Cellular Network Value Chain
One of the most significant ways that 5G neutral hosts influence the telecommunications ecosystems is by changing the value chain for private networks. As Table 1 shows, a traditional deployment setting is linear, and it involves a one-on-one interaction between the supplier (System Integrator (SI), infrastructure vendor, or Communication Service Provider (CSP)) and the implementing enterprise. But in the neutral host deployment model, this dynamic changes significantly. Now, multiple mobile operators share the same network infrastructure, and the neutral host conducts most of the management/customer support.
Table 1: Implications of the Different Value Chains for Private Networks Using a Neutral Host (Source: ABI Research)
|
Indicator |
“Traditional” Deployment |
Neutral Host Deployment |
|
Ownership |
A single operator owns and manages the network. |
Network infrastructure is owned and operated by a neutral third party that provides network access to multiple operators. |
|
Service Provision |
Operators provide their own network services. |
The neutral host provides network services to multiple operators, allowing them to focus on their core business activities. |
|
Network Utilization |
Operators use the network to provide their own services. |
Multiple operators and tenants share the network infrastructure, increasing network utilization and reducing costs. |
|
Interoperability |
Each operator's network services are typically incompatible with those of other operators. |
Network services are designed to be interoperable, allowing multiple operators to share the network infrastructure, providing customers with a greater choice of services. |
|
Revenue Generation |
Operators generate revenue primarily from the sale of their own network services. |
The neutral host generates revenue from the sale of network access and services to multiple operators and tenants. |
|
Customer Service & Support |
Operators provide customer service and support for their own network services. |
The neutral host provides customer service and support for network services provided to multiple tenants. |
Learn more about how neutral hosts affect the telco value chain, key market activities, and significant players by downloading ABI Research’s The Role of Neutral Hosts in Private Cellular Networks research report. This content is part of the company’s 5G Markets Research Service.
