Private 5G Costs in Canada: Is It Worth the Investment?

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Private 5G networks offer undeniable advantages: enhanced speed, security, and control. Businesses across Canada are looking at this technology with keen interest. 

However, before jumping in, it’s crucial to understand the bottom line. This post breaks down the costs of deploying a private 5G network, empowering you to make smart decisions for your business.

Key Takeaways

  • While the price tag may seem high, private 5G offers a compelling return on investment. Businesses frequently see gains exceeding 10% (and often above 20%) in operational efficiency, decision-making, and collaboration, leading to reduced costs and potential new revenue opportunities.
  • Be prepared for investments in core network equipment (potentially $250,000+) and ongoing licensing fees (around $100,000 annually). Installation, spectrum, and operational costs will also be a factor.
  • Factor in an estimated $40,000 – $50,000 annually for private 5G network maintenance, updates, power, and potential staffing needs.
  • Private 5G makes the most sense for businesses struggling with outdated infrastructure, operating in remote locations, or relying on mission-critical applications where security and reliability are paramount.

Key Cost Components of Private 5G

Understanding the financial implications of private 5G deployment is essential for making an informed decision. Here’s a breakdown of the primary expenses to consider:

1. Core Network Equipment & Licensing

The heart of your network is the core, the central infrastructure that handles everything from user connections to data processing. Be prepared for a substantial upfront cost –  equipment can easily reach $300,000. Beyond that, expect annual licensing fees, which can run up to $100,000 annually. 

However, private 5G costs steadily decrease due to market growth and adopting hybrid network models, making deployment more cost-effective. Technological advancements, like streamlined antenna designs, also contribute to lower equipment and energy expenses. 

For larger mining operations, where significant savings are possible, the initial $250,000 investment is increasingly becoming a no-brainer as these cost-reducing trends gain momentum.

Here are the factors that influence it:

  • Radios and Towers: The cost of radios, and potentially towers, is directly tied to the coverage area and environment (indoor vs. outdoor) you need to serve.
  • Installation: The expertise required to install hardware and configure your network will influence labor costs. While general estimates are hard to provide, field service technicians with specialized 5G installation skills might fall within $53,000 for an entry-level technician up to $80,000 or higher for an experienced one.
  • Spectrum: Essential for operation, spectrum can be acquired through various licensing options in Canada. This represents a variable cost to factor into your budget.

2. Ongoing Costs

Once your private 5G network is operational, it’s important to budget for continued expenses to ensure performance and security.  While exact costs will vary, the approximate annual operational cost is $40,000 – $50,000

Let’s break down the typical components:

  • Maintenance and Updates: Keeping your network secure and running smoothly means regular software updates and potential hardware maintenance.
  • Power: Network equipment, like all technology, consumes electricity. Be sure to calculate this recurring operational cost.
  • Personnel: Your existing IT team may require training, or you might need to hire staff specialized in managing and maintaining your 5G network.

Understanding Private 5G ROI

The substantial upfront cost of private 5G demands carefully assessing the potential return on investment (ROI). Fortunately, a growing body of evidence demonstrates significant benefits across various industries.

The mining industry presents a powerful case study for the return on investment (ROI) achievable with private 5G networks.  For instance, real-time tire pressure monitoring in haul trucks prevents costly blowouts and premature wear. 

As Andrew MacKenzie, Galaxy Broadband’s VP of Solutions/Sales Engineering, emphasizes, “If you can save me $100,000 on tires a year, it’s a massive win” – and the savings on tires alone can often pay for the entire 5G network.

Another case is private 5G enabling the use of optical sensors on digging equipment, guiding miners to the most valuable ore deposits. This data maximizes extraction efficiency and further boosts profits.

These once “nice-to-have” use cases are now considered “must-haves”  in the mining sector, driven by their clear and compelling ROI.

Galaxy Broadband helps mining companies achieve cost-effective private 5G solutions. Our partnership with Nokia provides access to cutting-edge hybrid on-prem/cloud solutions, often at a significantly lower price point than traditional on-premise systems.

Quantifiable Improvements

Research, like the Nokia study, reveals that businesses deploying private 5G often experience measurable improvements exceeding 10% and even exceeding 20% in areas including:

  • Operational Efficiency: Private 5G’s low latency and reliability enable the automation of tasks, optimize workflows, and reduce downtime, maximizing the use of resources.
  • Decision-Making: Access to real-time data empowers managers with the information they need to make timely decisions, positively impacting business outcomes.
  • Collaboration: Enhanced communication and coordination tools, made possible by private 5G, foster seamless collaboration between teams and across distances, improving productivity.
  • Sustainability: Private 5G can facilitate smart monitoring and control systems to optimize energy use and minimize waste, contributing to environmental sustainability goals.

Real-World Benefits

Beyond percentages, here’s how private 5G directly impacts operations:

  • Remote Monitoring: Real-time tracking of assets, equipment, and work sites ensures visibility, reduces losses, and optimizes logistics.
  • Predictive Maintenance: Sensors connected via 5G transmit equipment health data, flagging potential failures before they cause disruptions, saving costs and boosting reliability.
  • Security & Safety: Enhanced surveillance, secure communications, and connected safety devices bolster workplace security and enable rapid incident response.

When is Private 5G Worth It?

While private 5G offers compelling advantages, it’s essential to determine if it’s a suitable investment for your specific business needs. 

Whether private 5G is “worth it”  ultimately depends on your business’s unique requirements and goals. A thorough analysis of your existing systems, pain points, and potential ROI will provide the clearest answer.

Here are key scenarios where the costs of deploying a private 5G network are likely justified:

1. Replacing Legacy Systems 

If your current communication or operational systems are outdated, inefficient, and have high operating costs, private 5G can offer a significant upgrade. The enhanced speed, reliability, and automation capabilities can streamline operations and reduce ongoing expenses, offsetting the upfront investment.

2. Remote Locations 

In areas where traditional internet connectivity is poor, unreliable, or prohibitively expensive, a private 5G network can provide the robust connection needed for operations.  This is especially common in mining, energy, or geographically dispersed industries.

3. Mission-Critical Applications

If your business relies on applications where downtime or security breaches have severe consequences (e.g., manufacturing, healthcare, utilities), private 5G’s superior reliability and security controls offer peace of mind.  The ability to customize and manage your own network reduces risk and ensures uninterrupted service.

Conclusion

Private 5G is poised to transform Canadian industries. Its potential for enhanced speed, security, and innovation is undeniable. However, businesses must strategically approach the costs and complexities to reap the benefits fully.

This blog post has equipped you with the knowledge to assess if private 5G aligns with your operational goals and budget. The next step is determining how to make this powerful technology work for you.

Partnering With Galaxy Broadband for Success

In partnership with industry leader Nokia, Galaxy Broadband simplifies the journey towards private 5G adoption. We provide expert guidance, tailored solutions, and seamless integration, empowering you to:

  • Maximize ROI: Our focus is identifying areas where private 5G delivers your business’s greatest operational and financial gains.
  • Navigate Complexity: We manage technical hurdles, from spectrum licensing to deployment, ensuring a smooth implementation.
  • Unlock Innovation: We’ll help you envision and realize the transformative applications private 5G enables within your industry.

Don’t just explore the possibilities of private 5G – embrace them. Contact Galaxy Broadband today to schedule a consultation and discover how we can accelerate your path to a more connected and efficient future.

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