Personalized Service Demand Drives Growth of Private Network Communication

The necessity and inevitability of private network communication are determined by the specific attributes and requirements of sectors such as national defense, public security, energy, and transportation.
Public communication networks (public networks) and private communication networks (private networks) together constitute China's communication system. Public networks provide universal services to society and are the mainstay of national communication infrastructure, occupying a dominant position. Private networks, on the other hand, are built to meet the special communication needs of production organization, command and dispatch, and management within certain industries when public networks cannot satisfy their specific application requirements.
According to the "2012-2016 China Private Network Communication Industry Development Prospects and Investment Forecast Analysis Report" released by Forward Industry Research Institute, energy and transportation industries hold a fundamental position in the national economy, and their safe and reliable operation is a matter of national security. The state has invested heavily in the informatization and automation of their production processes, making their industry informatization level higher than other sectors. For energy and transportation, private network communication is the most basic guarantee and support system, planned and built in sync with power grid construction. Particularly with the continuous deepening of informatization in the energy and transportation industries, private network communication systems play an increasingly important role in promoting safe production, improving industrial efficiency, transforming business models, and building "digital power grids" and "digital transportation." Investment proportions and total investments in private network communication systems across industries are continuously increasing, driving rapid growth of the industry scale.

Private network communication originated in the military and was gradually applied to government and public safety departments and public utility departments. With economic and social development and advances in communication technology, professional wireless communication products have also become increasingly popular among industrial and commercial users.
Professional wireless communication technology has evolved from conventional to trunked systems and from analog to digital. Currently, the mainstream international digital standards for professional wireless communication include TETRA, P25, DMR, and dPMR. With the continuous development of wireless technology and the increasing prevalence of professional wireless communication equipment, frequency resources have become increasingly strained. To promote technological upgrading across the industry, a few countries (currently only the United States, Japan, and China) have mandated timelines for the transition from analog to digital in professional wireless communication. Other countries have only expressed intentions or made verbal recommendations without mandatory implementation policies, and most continue to evolve at the market's own pace.
China's private network communication market has maintained relatively rapid growth in recent years, reaching approximately RMB 6 billion in 2010. However, compared with developed countries, the overall market size remains relatively small, accounting for less than one-tenth of the global market. Among this, industry private network communication equipment accounts for approximately RMB 4.3 billion, and the technical service market approximately RMB 1.7 billion.
The number of enterprises is relatively large, but their scale is generally small. However, with promising market prospects and intensifying competition, some advantageous enterprises have begun to emerge, such as Hytera, Haige Communications, and Keybridge Communications, all of which have been listed on the capital market. In the future, with the development of the private network communication industry and further penetration by foreign advantageous enterprises, competition in the domestic market will become increasingly fierce.
The private network communication industry research team of Forward Industry Research Institute believes that with China's rapid economic development and sustained government investment in private networks, the private network communication market will continue to grow rapidly in the coming years. By 2015, the market size is expected to reach RMB 14 billion, including approximately RMB 8.5 billion for equipment and RMB 5.5 billion for technical services, indicating very broad market development prospects.
Meanwhile, in the segmented fields of China's private network communication industry, the service market is growing faster than the equipment market, with its share of the industry rising from 28% in 2010 to approximately 38% in 2015, mainly benefiting from the increasing demand for personalized services from users.