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Value is at the heart of network slicing monetization

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Customizing network attributes to the optimal experience for any service, application, or event (and at scale) is beyond evolutionary; it’s a new extraordinary level of granularity enabling service differentiation tailored to customers’ needs. Is BSS ready for this?

Senior Solutions Marketing Manager

network slicing monetization use case

Senior Solutions Marketing Manager

Senior Solutions Marketing Manager

On top of 5G, the Internet of Things (IoT), enhanced mobile broadband (eMBB) and critical machine type communications (mMTC) enable a lot more new and exciting use cases and revenue streams. These use cases have many different demands in terms of network performance, and optimizing the resources used to deliver them is key to efficient deployment and usage of the 5G network. Network slicing epitomizes the changing characteristics and flexibility of mobile networks as 5G rolls out across the globe. It adds another dimension to service quality, with partitioning and isolation bringing a new range of possibilities, where the network slice is customized and tailor-made to defined specifications. Significant changes are needed across BSS to capture the value of network slicing: more flexibility in ordering, activation and assignment, in digital channels to support the customer experience, in catalog management to support with B2B2X partnerships models and in billing. Successful monetization depends on how value is understood, communicated, configured, activated, and measured – before, during and after the experience. 


A network slice for every experience 

The one-size-fits-all public network cannot meet the needs of emerging and advanced mobile connectivity use cases, which have an increasingly diverse array of technical operations and security requirements. Network slices present advantages over private networks too in terms of both cost and coverage. This is not necessarily an either/or question as public networks, public and private network slices and private networks can all comfortably coexist to meet different needs over time and across services, applications, segments and customers. And multiple slices will likely be in play simultaneously, even for a single use case.  

Figure 1 below, illustrates a 5G stadium experience with several network slices, serving different purposes with different quality and performance requirements, to enable the experience, all of which, in this example, are transparent to the end consumer (stadium visitor). For more on this use case and associated business models and implications for BSS see Bringing the heat to stadiums: Monetizing 5G immersive experiences. 


Figure 1: Multiple simultaneous network slices enable the 5G stadium experience 



Network slicing presents a USD 200 billion opportunity to CSPs by 2030 

A recent report by Ericsson and Arthur D. Little, Network slicing: A go-to-market guide to capture the high revenue potential explores the many different opportunities and possible go-to-market roles, especially in the enterprise segment where business customers will configure and consume network slices directly or indirectly (e.g. their customers will consume the network resources). More than 400 5G use cases were analyzed, across 10 industries, isolating the network value potential, along with business models and strategies to succeed in the market. Along with the clear business potential for network slicing of USD 200 billion by 2030, an interim view suggests revenues of USD 45 billion by 2025; a strong growth curve is expected. This report is part of a series of four reports, all accessible at Network slicing accelerates 5G for business.  The reports also delve into the top 10 industry segments and selected use cases, the end-to-end solutions for network slicing and the network slicing deployment journey for the CSPs. 

While there is no direct mass market consumer play for network slicing, it is highly relevant for many consumer use cases, such as mobile gaming, and the many applications of augmented reality (AR) and virtual reality (VR). This will likely occur through business to business to consumer (B2B2X) business models with the purchaser of the network slice being the business (B) in the middle. In addition, there’s a myriad of direct business to business (B2B) opportunities to organizations in industries from manufacturing to automotive, in mines and ports and across energy and utility networks. Figure 2 below shows the potential revenue opportunity for network slicing. 


Figure 2: Network slicing opportunities (USD 200 billion by 2030) span industries and public sector 


Source: Ericsson and Arthur D. Little, Network slicing: A go-to-market guide to capture the high revenue potential 


More granular monetization options can be put into play 

5G’s network slices provide many more value attributes, parameters or currencies, like latency, throughput, reliability, mobility, QoS, energy efficiency and more that can be used to articulate value and construct revenue models for the particular use cases that BSS needs to monetize.  

These parameters will allow charging to identify the network slice or the services in order to apply differentiated tariffs. Some examples of these parameters include:  

  • Single Network Slice Selection Assistance Information (S-NSSAI)  
  • Slice Service Type (SST)  
  • Slice Differentiation (SD)  
  • Data Network Name (DNN), similar to an AVP on Diameter protocol  
  • User Plane Function, (UPFid), identifies a location  

With these configurable network slices, that could potentially have customer-specific characteristics, there’s opportunities for many more granular monetization strategies. Each slice, built to its own specification, has characteristics and values that can be used to directly impact the prices charged. In addition, pricing could be applied to individual services running per specified characteristics. Using this approach enables service providers to deliver services of the appropriate quality and characteristics, while charging for their usage accordingly. The end customers could consume just what they need and pay for what they use. 

Many of the pricing approaches we’re already familiar with will still apply – fixed price options, discounts and usage / event-based rating and billing. But in most of the use cases there’s scope for more adventurous approaches is in the articulation of specific value to drive additional revenues, the setting or selection of SLAs and the consequences of SLAs being breached, or exceeded. The granularity of network and service characteristics that can be employed gives rise to a granularity of monetization options that far exceeds what’s commonplace today in both subscription and usage-based charging models. We can also expect to see real-time charging and billing, multi-party billing, commissions and other forms of revenue share with one or more partners to support emerging business models, encompassing as-a-service (aaS) models. 

In network slice lifecycle and service management there’s a clear need to automate as much of the onboarding setup, activation and orchestration as possible, including contract creation and products instantiation. We anticipate scenarios where an app provider, for example, cloud gaming provider leans on its partner CSP(s) to onboard players to the network slice for a premium gaming experience but retains the payment experience and payment capture.  While some network slices will be long-lived, for example, an enhanced consumer mobile broadband slice, other slices and their corresponding charging and monetization models may need to be spun up and down very rapidly with a short life span, like per the earlier example, a stadium network slice that supports a sporting event for a few hours. 


With network slicing still in its infancy, BSS is one of the main challenges 

Getting to market and securing growth with new differentiating experiences necessarily entails driving revenue growth with a business driven stepwise 5G expansion, building a solid and sustainable foundation for long term technology evolution in the pursuit of efficiency. 5G-enabled enterprise digital transformation will transform business operations, improving agility, efficiency and the quality of insights leading to better data-driven decision making. And it translates into extra possible revenues to CSPs. 5G will also enable a whole series of possibilities not yet imagined, so it is crucial that a flexible foundation is built so new use cases can be quickly delivered once industries require them. To manage network slicing within enterprise transformations, several BSS areas need addressing to capitalize on this opportunity: 

  • Customer experience around ordering and activation – end to end network slicing assignment through digital channels 
  • B2B2X partnerships models - catalog management and flexibility in order management 
  • Modernize billing - advanced partnership models and billing capabilities 

The capabilities, building blocks and partnerships needed to leverage 5G as platform for innovation will form over the coming years and network slicing will facilitate a turbo-charge of network capabilities to augment the experience, right-size capacity, ensure efficiencies and guarantee reliability to provide new forms of value relevant to business customers. A clear and modern network slicing monetization strategy needs to be enabled to win customers’ hearts and minds and ensure new revenue streams can flow smoothly.


Related links:

Network slicing: A go-to-market guide to capture the high revenue potential 

Accelerate 5G business with network slicing

Bringing the heat to stadiums: Monetizing 5G immersive experiences 

Capturing 5G monetization opportunities with 5G charging | eBrief | 20 min

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