How can you get the full value of network slicing?
Network slicing represents a major innovation for mobile network platforms, particularly for business expansion beyond consumer mobile broadband for 4G and 5G. Until now, the “one slice fits all” model for unlimited data connectivity has been dominant. This post examines the role tailored, optimized slices of network capacity and capabilities can play in the future, especially when combined with business model innovations.
The one slice fits all market domination is coming to an end
The explosive growth of mobile broadband services is a global success with few comparisons. This growth has been enabled by strong industry focus on simplicity with one type of device, one service and proven traffic-based business models. With plenty of customers to serve, this decade has been about maximizing smartphone penetration with a universal offering.
This focus on the flagship offerings has dwarfed the long tail of other opportunities – a tail on which no individual use case can move revenue needles anywhere close to the flagship offering. As a consequence, we have a long tail of un-, under- or over-served market opportunities. These require a different offering than the mainstream one-slice-fits-all approach.
Network slicing is about unlocking these use cases with tailored, optimized network slices and with business models that make business sense for both operators and industries. Rather than billions of smartphone customers, they represent opportunities with global sizes of 10k, 100k and 1Mn.
No network slicing limits the 4G and 5G markets
Network slices will not replace all private networks. And not every company that wants to build a private network has access to suitable spectrum. With the creation of network slices, there will be more choices. such as between a slice or a private network build. The borderlines and preferences between the choices will fluctuate, rather than everyone being stuck with a single default alternative.
At the high end of market, business have seen building own networks as their only option. In this case, the one-slice-fits-all offering was either capability or business-model restricted, or it did not provide enough coverage. This led to dedicated wired or WiFi–enabled networks even where mobile networks could have done a better job. Network slicing over 4G today and 5G tomorrow can change this in a material way.
The creation of the network slice alternative involves:
- the refined network requirements on use case or industry level
- the definition of the network capabilities required for each slice
- the network wide replication potential for successful slices
- alternative business model to traffic-based tariffs
All four are central to make the slice alternative attractive enough for operators and industries to pursue
Network slicing is an instant and dynamic game
The full value of network slicing stems from instant creation and dynamic management of slices. Demand for network slices is hard to predict and dynamic in nature, varying between slices and also over the course of the day. Flexibility in how to create slices and dynamic management of required resources is paramount.
This instant reality requires a high degree of orchestration and automation capabilities from start – working faster than the complexity grows.
Predictions for network slicing in a 5G network platform context
- Network slicing, 5G NR and distributed clouds are all game changers, for network platforms and the broader ecosystem
- Network slicing starts with 4G and evolve to more sophisticated capabilities as we move to 5G
- Business model innovations for network slicing are accelerating, affecting both how you sell and buy network slices.
Thank you for reading this post this post. For deeper insights about the fore front of network slicing we would like to suggest the following Ericsson assets.
Our new paper: Network slicing can be a piece of cake
Our joint study with BT: Network slicing is key for the IoT business case
Our “15 minutes with 5G” podcast with Jan Häglund, Head of Architecture & Solutions at Ericsson: How network slicing pays off