HPE acquires Athonet to bolster private 5G portfolio

• HPE has long identified the private wireless networks sector as a business opportunity
• Now it has acquired virtualised core network technology Athonet to enhance its proposition
• Athonet will be integrated with its telco and Aruba solutions

Hewlett Packard Enterprise (HPE) is bolstering its private wireless network portfolio with the acquisition of Italian virtualised mobile packet core platform vendor Athonet for an undisclosed sum. 

Self-funded Athonet is a niche, specialist company, but you couldn’t call it a startup. It was founded in 2005, has developed virtualised core systems for 3G, 4G and now 5G deployments, all with its own in-house R&D team, and boasts more than 450 deployments with mobile operators, airports, utility companies and other large enterprises. Its customers include Italian operators Telecom Italia (TIM) and WindTre, Orange, Deutsche Telekom, Telenor, Telia and Cellnex. So it is well established, experienced and respected. 

Therefore, this looks like a good move for HPE, which is able to tackle the developing private wireless networks market from a number of different angles, as it already has a hybrid (cellular and Wi-Fi) private networks solution that comprises: A slimmed-down version of its own 5G core stack; HPE Service Director management and portal software; HPE GreenLake, which is essentially a local, on-premises compute and storage platform that is charged using a consumption-based model, like a local data centre-as-a-service; Aruba Wi-Fi technology and software, including Air Pass, which enables roaming between Wi-Fi and 5G; and radio access network (RAN) hardware and software from Airspan and JMA Wireless for 5G and 4G/LTE.

The Athonet core now gives it a more dedicated and specialised option with which to pitch to mobile operators that, in turn, can use the HPE solution to win private networks business from enterprise customers, as well as direct to enterprise users that choose not to select a mobile operator as the primary solution provider.  

“The incorporation of Athonet’s technology will allow HPE to deliver private networking capabilities directly to enterprises as part of HPE’s Aruba networking portfolio, while also enabling communications service providers to quickly deploy private 5G networks for their customers,” noted HPE in its announcement about the planned acquisition, which is due to be completed in sometime in May or June. 

And the market is worth chasing, if a forecast from market research firm IDC is in any way accurate: It expects private 4G/5G wireless infrastructure sector revenues to reach $8.3bn by 2026, of which enterprise private network core technology will account for $1.6bn.   

“Telco customers are looking for simpler ways to deploy private 5G networks to meet growing customer expectations at the connected edge,” stated Tom Craig, global vice president and general manager at HPE’s Communications Technology Group. “At the same time, enterprise customers are demanding a customised 5G experience with low-latency, segregated resources, extended range and security across campus and industrial environments that complement their existing wireless networks. With the acquisition of Athonet, HPE now has one of the most complete private 5G and Wi-Fi portfolios for CSP and enterprise customers, and we will offer it as a service through HPE GreenLake,” he added. 

The general consensus emerging in the industry right now is that the private wireless network sector presents a significant opportunity for many companies, but maybe not immediately and maybe not in the way the mobile operators had initially hoped, especially in terms of 5G private network opportunities. Research house Dell’Oro Group, for example, recently lowered its market projection for the overall private wireless market, stating that it is “not materialising as fast as initially expected”. 

And while ABI Research noted in an announcement this week that it expects the private cellular networks sector to be worth US$7bn this year and grow significantly to be worth $96bn by 2030, systems integration costs will account for about half of that value, while 4G is expected to dominate deployments for many years, with 5G lacking dominance in the sector until 2030. “The persistently immature ecosystem around industrial grade 5G devices prevents 5G from unfolding its whole value proposition for enterprise connectivity, decreasing the attractiveness of 5G for enterprise cellular networks,” noted the ABI team. 

- Ray Le Maistre, Editorial Director, TelecomTV