Taiwan Enters Age of Private 5G Networks

The 5G sector is anticipating a revolutionary “iPhone moment” as new technology helps companies in a range of fields pay less, earn more, and become more autonomous.

Until mid-2023, many Taiwanese manufacturers were frustrated by the trend of customers placing small-batch orders. For one Tainan-based cable factory, for example, each new order required a total reorganization of the production process, causing operations to be suspended for up to two weeks. A major reason for the delay was that all the equipment had to be physically connected through a complex network of wires.  

But thanks to some significant technological upgrades, the factory’s average downtime for such readjustment has now been reduced to just two days. A private 5G network, in combination with an artificial-intelligence-driven Internet of Things (IoT) application, has replaced the previous “wiring spaghetti” to simplify the production-line modifications.  

By strictly limiting access, private 5G networks offer high security. They also enable the speed, bandwidth, and availability that many companies need to maintain the high volume of data processing and device connectivity within their data architecture.  

To provide this complex connectivity, companies use digital twin technology to create virtual replicas of physical systems, updated in near real-time. The technology aids in promptly identifying potential critical areas, giving companies greater control over risk mitigation efforts. The resulting process simplification makes it accessible even to less technically savvy operators and facilitates learning and decision-making across all levels of a connected company.  

Kaohsiung is becoming a hub for the innovative use of private 5G networks.

“There are many problems that cannot be solved with Wi-Fi, given that it is inaccurate and interruption-prone, when it comes to controlling sophisticated equipment like autonomous mobile robots – especially if the equipment is spread over a wide factory-floor area,” says Vicky Sun, business development manager at Saviah Technologies, a Taipei-based 5G core network software provider.   

Saviah has been involved in many private 5G network cases (including the cable company mentioned above), and Sun sees great advantages in installing these networks. “Once the private 5G network is set up, it is easy to monitor it with an OAM (operations, administration, and maintenance) system, so the enterprises do not need to hire additional IT experts or spend significantly more money on training,” she says.  

“Private 5G networks are about to enjoy their ‘iPhone moment,’” as they increase autonomy while cutting costs for companies, says Alex Chou, special assistant to the CEO Office of New Taipei-based network communications and electronics manufacturer Askey Computer. “They directly address manufacturers’ most pressing challenges, such as increasing energy and labor costs, increasing demand for customized and personalized products, the minimization of business interruptions, and the advent of more complex models of operation and business cases.”  

At a recent seminar held by the Taipei Computer Association, Chou presented an Askey private 5G network project for tunnel surveillance along a 2.4-kilometer section of the Taipei MRT. He noted that movements of MRT trains are highly safety-sensitive, and tunnel surveillance cameras struggle to transmit data in real time using Wi-Fi or public 5G bandwidth. Utilizing private 5G networks for these processes ensures speedy data transmission and helps operators avoid sharing frequency resources with the thousands of smartphones used by passengers during their journey. 

At the same seminar, Chunghwa Telecom presented another example illustrating the usefulness of private 5G networks. Chunghwa’s case concerns a steel mill that uses a private network to control specialized vehicles transporting steel slag – a potentially hazardous task.  

“While improving employee and vehicle safety, the network also allows for the AI-empowered tracking of foreign objects and thereby reduces labor cost,” said Chunghwa Technical Product Manager Jeff Mo during the presentation. “The network also solves the issue of the high heat waste area being too hot for conventional wiring.”   

In the Extreme 5G Cyberpunk Flying Competition Night in December, pilots used 5G Mixed Reality glasses to control drones as they flew through an obstacle course in Kaohsiung.

Will Huang, vice president of Taipei-based system integrator Wave-In Communication, says his company deployed a private 5G network with commercial low-Earth orbit (LEO) communications satellites (satcom) on a cargo ship owned by Taiwanese shipping company Yang Ming Marine.  

Conventionally, ship crews rely on voice communication to connect with onshore decision-makers, a method often disrupted by vast distances and adverse weather conditions. Other challenges include the enormous size of many ships, with crew members dispersed across extensive floor areas spanning up to a dozen decks, as well as the massive engine room below. To make matters worse, the ships’ complex metal structures hinder effective transmission. 

“The link between private 5G networks and LEO satcom solves these issues, helping in equipment troubleshooting and telemedicine for sick crew members while also allowing the crew to stay connected with their families onshore and enjoy video streaming,” says Huang. “For shipping lines, the improvement of crews’ quality of life is a very important task, as it helps them cope in a time when recruitment of seafarers becomes ever more challenging.” 

As the world’s sixth-largest textile exporting country, Taiwan can also benefit from using private networks to streamline processes in the fabric industry. One company that has paved the way in this regard is Taipei-based Taiwan Taffeta Fabric. The company has installed private 5G networks to address issues related to the operation and adjustment of hundreds of weaving looms amid workforce shortages. Taiwan Taffeta Fabric also uses its private 5G networks for immersive simulation-based cloth inspection training to reduce scheduling delays. 

Saviah Technologies’ portfolio also includes examples showing the advantages of private 5G networks for new business models. One such model is Argo Yacht Club in Kaohsiung’s Asia New Bay Area, which uses private 5G for real-time yacht tracking, berth vacancy updates, and automated charging. Argo has also employed the technology to strengthen security features, such as intrusion detection and drone patrols for personal safety and facility security. 

Saviah’s Sun cites “network slicing” as another major development in the realm of private 5G networks. This technology enables a single network to be segmented into various slices tailored to specific customer needs and demands.  

The flexibility of network slicing enables operators to efficiently allocate resources to each slice, ensuring optimal speed, throughput, and latency, significantly reducing both operating expenses and capital expenditures for network operators. Even more importantly, it helps ensure that essential public services like first responders and medical emergency teams receive enhanced coverage, capacity, and connectivity.  

Remarkably, network slices can be swiftly initiated and deployed for use at temporary events such as concerts, providing a versatile and responsive networking solution. One such event was the “Extreme 5G Cyberpunk Flying Competition Night,” held in Kaohsiung in December. Using Taiwanese technological solutions, leading international drone pilots from France, Thailand, and Taiwan competed wearing 5G Mixed Reality (MR) glasses to control the drones. Meanwhile, multiple 4K-resolution cameras were used to broadcast the event from the pilots’ perspectives to an onsite audience. 

“The Kaohsiung drone race illustrated that the 5G technology development direction is toward ever more time sensitivity and low latency, showing that data transmission is becoming good enough for supporting devices like drones, XR, and autonomous vehicles,” says Sun. 

New 5G technology transmits data fast enough to support drones and extended reality (XR).

A sprawling ecosystem 

The use of private 5G networks is a new trend – Taiwan’s own roll-out of the powerful technology began less than a year ago. According to the Ministry of Digital Affairs, around 150 private 5G networks are already up and running on the island, with the agile manufacturing sector accounting for the bulk of applications.  

While the frequencies of Taiwan’s public 5G networks are controlled by the three main telecommunication providers – Chunghwa Telecom, Taiwan Mobile, and Far EasTone – and access is granted through subscription fees, private 5G networks operate differently. They are typically owned by the users themselves, completely isolated from other networks, and function exclusively within a specific local environment.  

Still, the two types of networks are highly interconnected, making some wonder – considering the relatively slow uptake of public 5G in this market – whether Taiwan will manage to quickly roll out private 5G. 

Despite Taiwan’s pioneering role in public 5G networks in the Asia-Pacific region, the adoption of this high-speed technology has not met expectations, according to the Economist Intelligence Unit (EIU). At the end of 2023, 5G mobile penetration for the top telecom providers in Taiwan remained at under 30%, below the nearly 40% achieved in South Korea and the over 60% in Hong Kong. 

“The enterprise side was expected to fare better, as has been the case for most countries where 5G was launched from 2019 onwards, but this trend has not picked up much in Taiwan yet,” says Laveen Iyer, a tech and telecom analyst at EIU. She points to the merger in 2023 of telecom providers Taiwan Mobile and Taiwan Star, as well as Far EasTone and Asia Pacific Telecom, as a reason for the lag.  

“Telcos spent most of 2023 planning for the market consolidation that was underway,” Iyer says. “I suspect companies will need a quarter or maybe a little more time to integrate all their spectrum and infrastructure assets before much of the work on enhanced private 5G network offerings will begin.”  

However, Iyer adds that once this process gains momentum, the growth outlook for Taiwan is bright. “Announcements from telcos in 2023 indicate that there is an interest in tapping into demand for private 5G and other enterprise solutions in foreign markets as well.” 

Private networks also allow for the involvement of more suppliers. According to the Taipei-based, government-supported Market Intelligence and Consulting Institute (MIC), most Taiwanese suppliers’ products support the use of an Open Radio Access Network (O-RAN), which means that service providers can use non-proprietary subcomponents from a variety of vendors. 

As for key challenges to the broader implementation of private 5G networks, MIC cites such issues as the integration of communication and equipment, the maturity of the network and terminal equipment ecosystem, and the degree of cost-effectiveness. 

“Challenges on the equipment and technology side are expected to be resolved as the private network market matures,” says Cheng Chih-kang, an industry analyst at MIC. Meanwhile, “challenges on the operational strategy side, such as cost-effectiveness and adjustments to operating models, will require continuous exploration by relevant industry players to accumulate more benchmark cases and help establish a richer reference model.” 

Cheng highlights the Taiwan government’s subsidies for application cases and technology development as factors that will encourage more implementation of private 5G. Additionally, he says, the government plans to investigate methods for lowering implementation barriers, including high costs, with the aim of stimulating market development. 

For its part, the Taiwan Sheet Metal Management Association (TSMMA) says it expects implementation to soar in the coming year. Given its broad membership among manufacturers, the association has kept a close watch on the development of private 5G. TSMMA expects rent-to-buy schemes and low-rate loans from the government to help make the technology affordable for more members, notes a TSMMA spokesperson. 

“Less than 3% of our members have set up private 5G networks in a few processing plants, but we hope that successful cases will increase the number of projects by 20% per year in the next five years,” the spokesperson says.