Neutral Hosts: Everything Telcos Need to Know for Enterprise 5G Deployments

The emergence of 5G networks, as well as concepts like network slicing and the growing popularity of Software-Defined Networking (SDN) and network virtualization, give rise to a new role for neutral hosts beyond merely providing connectivity infrastructure (be it fiber networks, tower operation, etc.). Neutral hosts can provide network management and operational capabilities in a managed service approach, particularly to enterprises. But how should telco players, such as Communication Service Providers (CSPs), neutral host providers, network infrastructure vendors, cloud service providers (hyperscalers), and System Integrators (SIs) learn about this evolving space?

Market Overview

A neutral host is a third-party service provider that owns and operates wireless infrastructure, such as cell towers and small cells, and allows multiple wireless service providers to share the infrastructure. The deployment of 5G networks has been a major focus for many countries and industries, offering faster speeds and improved network capabilities. While 5G networks can be owned and operated by telecommunication companies or—spectrum regulations permitting—implementing enterprises themselves, neutral hosts are also emerging as an increasingly popular alternative to providing enterprise connectivity.

The concept of a neutral host for telecommunication networks is nothing new, as they have existed almost as long as cellular communication has existed. The traditional role of a neutral host in cellular networks is to build, own, and operate the physical infrastructure required to support mobile networks, such as cell towers and fiber-optic cables, and then rent access to multiple Mobile Network Operators (MNOs).

This arrangement allows MNOs to reduce their Capital Expenditure (CAPEX), minimize operational costs, and reduce the time required to deploy new services in a given area. In this context, the neutral host would act as an impartial intermediary between MNOs, providing a neutral platform for all parties to coexist and operate their networks independently.

Now is the time for the telecoms industry to include neutral host providers in their private network and enterprise connectivity planning, whether as potential channel partners or additional competitors for providing connectivity services to enterprises.

“Both the increasing appearance of neutral host providers and new networking trends will have important implications on the value and supply chain for enterprise connectivity.” – Leo Gergs, Senior Analyst at ABI Research

Key Decision Items

The key decision items in this Research Highlight will provide strategic reccomendations for CSPs/neutral hosts, 5G infrastructure vendors, cloud hyperscalers, and system integrators.

Recommendations for CSPs and Neutral Hosts

CSPs Should Welcome Neutral Hosts with Open Arms

CSPs should embrace neutral hosts as new actors on the telco stage and approach them for partnerships. Partnering with neutral host providers can allow CSPs to offer bundled services to customers to provide a full 5G Network-as-a-Service (NaaS) offering.

As discussed in previous ABI Research deliverables (see the Enterprise Opportunities in Network-as-a-Service Adoption report (AN-5608) and ABI Insight, “Making the Case for Deeper Partnerships between Neutral Host Providers and Communication Service Providers to Support Network-as-a-Service Deployments”), consuming the network as a service is top of mind for both consumers and enterprises. Therefore, CSPs must extend their offerings to remain relevant in this segment.

For example, CSPs can work with neutral host providers to offer combined data, voice, and other services, allowing customers to receive all their communication services from a single provider. This can help increase customer loyalty and provide a competitive advantage in the market.

Carefully Evaluate Market Demand for Enterprise Networks

Evaluate market demand to define the serviceable market for traditional CSPs and neutral hosts. Different enterprise verticals will have different requirements. Consequently, a “one-size-fits-all” model for private cellular networks will not emerge, let alone prevail.

Different go-to-market channels will remain to address these versatile requirements, with room for both traditional CSPs and neutral host providers. A careful assessment of the enterprise market will be necessary to ensure that both CSPs and neutral hosts spend their resources most effectively.

To differentiate themselves from the competition, CSPs should focus on offering unique and valuable services that set them apart from other providers. For example, they can offer specialized customer support, innovative pricing plans, or additional value-added services like cloud storage or online security.

Recommendations for 5G Infrastructure Vendors

Ensure Interoperability between 5G Network Infrastructure Products

Interoperable networking solutions are crucial to neutral host networks. Infrastructure vendors should focus on developing solutions that are compatible with multiple MNOs, making them appealing to neutral host providers. This will enable the neutral host to offer customers a more comprehensive range of services, as they will not be limited to working with a single vendor.

Keep Iterating Products to Meet the Needs of Neutral Host Providers

Expand the 5G product portfolio to react to neutral host requirements and demand. By offering a more comprehensive range of products and services, infrastructure vendors can cater to the needs of neutral host providers. This can include small cell solutions, in-building network solutions, and other network infrastructure components.

In doing so, vendors should remember that neutral hosts are often focused on cost-effectiveness, so infrastructure vendors should aim to offer competitive pricing. This can be achieved through innovative design and manufacturing processes, as well as through strategic partnerships with suppliers.

Recommendations for Hyperscalers

Embrace Neutral Hosts as an Additional Route to Market

For cloud hyperscalers, the emergence of neutral hosts offers another possible way to gain more traction in the enterprise connectivity market. As hyperscalers’ competitive advantage lies in processing telco payloads within their existing cloud infrastructure, they should use neutral hosts as an additional channel partner to take over customization and system integration capabilities crucial for specific enterprise requirements.

Adjust Offerings to Neutral Host Capabilities and Demands

In embracing neutral hosts as an additional route to market for enterprise 5G connectivity, hyperscalers should bear in mind that the skillset of neutral host providers and, consequently, the requirements toward their channel partners are somewhat different from traditional CSPs.

First and foremost, hyperscalers can offer network management and orchestration tools that enable customers to manage and monitor their private 5G networks, including the ability to manage network slicing and Multi-access Edge Computing (MEC) solutions. This can help reduce customer burden and improve the customer experience.

Additionally, hyperscalers can work toward offering network slicing capabilities, which will allow neutral hosts to partition the network infrastructure more easily to rent it to different tenants.

Recommendations for System Integrators

Use Neutral Hosts to Acquire New Types of Enterprise Customers

From an SI’s perspective, neutral hosts should be considered an additional channel to tap into new enterprise verticals. Neutral host providers are particularly well established within so-called “carpeted” verticals, where one single 5G connectivity infrastructure can be rented out to multiple tenants. Examples of retail and commercial real estate where neutral hosts are used include office campuses, sports & event venues, and financial services.

As these enterprise verticals are predominantly served by Wi-Fi service providers currently, the growing popularity of neutral host cellular networks will give cellular SIs an additional channel to a new group of enterprise implementers.

Align Product Offerings with Neutral Host Providers’ 5G Network Demands

To better serve the needs of neutral hosts, SIs should diversify their services to include 5G network planning, design, installation, maintenance, post-deployment support, and optimization. Furthermore, SIs should bear in mind that neutral hosts must be able to provide easily scalable 5G connectivity solutions to a range of tenants. Consequently, SIs will need to design integrated solutions modularly, allowing solutions to be easily adaptable to various environments.

Key Market Players to Watch

• Amazon Web Services (AWS)
• American Tower
• Azure
• Boingo Wireless
• Ericsson
• Huawei
• Nokia
• Orange Business Services

Dig Deeper for the Full Picture

To gain more insight into the significance of neutral hosts in private 5G deployments, identify potential partnerships, and home in on the top verticals for this cellular connectivity solution, download ABI Research’s The Role of Neutral Hosts in Private Cellular Networks research report.

Not ready for the report yet? Check out our following Research Highlights:

• Vendor Ecosystem Synergy Is Needed for Enterprise Cellular Network Infrastructure Solutions to Flourish
• 5G Private Networks in Asia-Pacific: A US$13.5 Billion Opportunity Spurred by Digitalization
• Placing 5 Asia-Pacific Countries under the 5G Microscope

This content is part of the company’s 5G Markets Research Service.