The three waves of 5G network slicing
Senior Solutions Marketing Manager
Senior Solutions Marketing Manager
Senior Solutions Marketing Manager
5G network slicing enables new use cases that can solve modern day challenges, such as enabling safer driving by autonomous vehicles, better remote healthcare treatment, push-to-talk emergency services, live remote broadcasting/streaming, and orchestrating processes with the Internet of Things (IoT). These promising use cases are among many that are driving demand for the high-performance and flexible communications capabilities of 5G network slicing.
Network slicing supports these innovative use cases by using virtualization to combine and partition physical and/or virtual mobile network resources, resulting in separate logical networks that can be dedicated to specific commercial, industrial, and public service purposes. Once these advancements become part of everyday life and business, we’ll wonder how we ever lived without them.
But this change won’t come overnight. It will roll in gradually in three distinct waves over the next decade or so. And as the momentum builds for this paradigm shift, service providers will need to reassess their digital OSS/BSS and networking infrastructures, and strategically invest in the upgrades necessary to build a sound, solid 5G network slicing foundation to support the new services.
Dramatic changes taking shape
To fully understand the market impact, operational challenges, and revenue potential that CSPs are likely to encounter because of 5G network slicing services, Ericsson partnered with Arthur D. Little (ADL) to research and analyze over 400 digital use cases in 70 industries. The findings of this Ericsson/ADL joint study have been published in a series of four in-depth reports, which are now available for download (see links below), including:
- Network slicing: A go-to-market guide to capture the high revenue potential
- The network slicing transformation journey: Starting and navigating the steps to success
- The essential building blocks of E2E network slicing
- Network slicing: Top 10 use cases to target (An overview of industries and use cases that will drive much of the revenue potential)
In Network slicing: Top 10 use cases to target, Ericsson and ADL identify the revenue potential and most promising industry segments and use cases, including those that are near-term, for network slicing that CSPs can pursue.
Source: Network slicing: Top 10 use cases to target, Figure 1 on page 2
In this blog, we highlight the key thought leadership gems presented in the four reports, which together form a valuable blueprint for how our industry can capitalize on the exciting changes to come.
Getting our feet wet
By 2030, the potential business revenue from 5G network slicing is expected to reach USD200 billion, with strong CAGR. And 5G network slicing will dramatically impact virtually all aspects of the CSP’s 5G ecosystem, including network capabilities and resource allocation, OSS/BSS orchestration and transactions processing, and new business models and promotional strategies. This and other key market projections can be found in Network slicing: A go-to-market guide to capture the high revenue potential.
While it’s early days, now is the time to fully grasp the transformative changes each of the three waves will bring and to develop a smart stepwise transformation roadmap that takes their digital OSS/BSS capabilities into account. In this way, they can be assured to have the agility and flexibility necessary to execute and capitalize on this lucrative, emerging 5G network slicing opportunity.
The 4-part ADL network slicing report series projects that “The deployment of network slicing is a journey over several years and the buildup will take place in a few waves.” We’ve summarized the key milestones that can be expected as the transition unfolds this way:
While this transition is monumental and transformative, the four ADL reports clarify what steps should be taken to meet the moment and prepare for the mounting demands each transitional wave will bring.
Navigating waves of change
Since 5G network slicing will impact and transform every corner of the CSP’s business model—including marketing and sales, and networking upgrades and optimization—the first step is to adopt digital OSS/BSS solutions capable of managing and automating the myriad of lifecycle functions in a way that maximizes revenue creation while minimizing risk.
To scale up, The essential building blocks of E2E network slicing explains that “automation across business and operational processes is crucial for successful monetization of the business models that network slicing brings.” [And] “to meet the associated scale and complexity, it is essential to automate both business and operational processes.”
Ericsson’s modular, automated Digital BSS and OSS workflow consists of Ericsson Orchestrator, Ericsson Catalog Manager, Ericsson Order Care, Ericsson Adaptive Inventory and Ericsson Dynamic Activation. This workflow seamlessly orchestrates service instances and lifecycle functions across the E2E network slicing value chain:
- To address setup of the infrastructure that will host the services, Ericsson Orchestrator enables automation of the hybrid infrastructure including resource orchestration, virtual network functions (VNF) life cycle management and end-to-end service orchestration.
- Ericsson Catalog Manager onboards the slice in its service catalog where it becomes a building block for the network service. From there, products are exposed for browsing via multiple channels.
- Whenever customers place an order for a new network slice-based service, Ericsson Order Care then triggers all related technical commands/actions for the network provisioning and activation management layer to deploy the network slice across all network domains. It then delivers the network-based services and resources that realize the commercial product offering.
- During the ordering process Ericsson Adaptive Inventory holds all information about network resources, status, availability and capacity.
- Ericsson Dynamic Activation finally provisions all products and services ordered in multiple network modules.
Prospects on the horizon
While the first and second waves demand that attention be paid to building out the physical and virtual network infrastructure and deploying automation and slices within the network, wave three expands the focus to encompass the sales and marketing channel.
To convey the value proposition of 5G network slicing to prospective partners and customers, and gin up excitement for launching new use cases, consider tailoring your 5G network slicing offerings to the unique needs of the market segments and industry verticals you wish to target.
Figure 2 From Network slicing: A go-to-market guide to capture the high revenue potential. Figure 9, Page 10
Having a smart go-to-market strategy is pivotal. Per the ADL report, Network slicing: A go-to-market guide to capture the high revenue potential, the top six industries most likely to have strong demand for network slicing are: “healthcare, government, transportation, energy and utilities, manufacturing, along with media and entertainment.”
The report states, “Six industries will have about 90 percent of the addressable revenue potential, according to a review of more than 400 digital use cases in 70 industries”. And while not all 5G use cases will require network slicing, 25 to 30 percent of them will.
Network slicing: Top 10 use cases to target advises CSPs to target the most promising use cases. This is because, of the six ADL-identified target industries for 5G network slicing, only “one or two use cases in each industry will account for most of the addressable revenue in each.”
CSPs will also need to reimagine their business models and align themselves with new partners and third-party providers that have a core expertise in the market verticals they want to target.
Riding the coming waves
With each of these three waves, the industry will see 5G network slicing offerings mature and expand. Along the journey, you’ll want to target promising enterprise customers and use cases in your service regions, while forming whatever partnerships are necessary to support and enable them.
Concurrently, innovating and retooling many aspects of digital OSS/BSS processes and systems will enable the automation of essential business and operational network functions all along the value chain, including charging, billing, catalog and order management.
- CSPs will start experimenting with network slices in the first wave making use of simpler charging and billing arrangements, mainly through set-up and usage fees for few network slices.
- This will be extended in the second wave with the increased number of network slices and also the ability to identify different types of traffic running through a network slice, allowing operators to use more complex charging and billing specifications, business models, SLA management and also include partners in their 5G ecosystem.
- For the third wave, we expect network slices to be dynamically activated on-demand, without human interactions, transforming network operator´s business into a 5G marketplace where multi-sided business models will deliver innovation to enterprises with several partners through B2B2X business models.
Considering ADL’s compelling market analysis and revenue projections, especially year over year, now is the time to make the appropriate investments in digital OSS/BSS solutions to ensure seamless and reliable 5G net slicing operations and monetization.
ADL sums it up best in The essential building blocks of E2E network slicing: “Network slicing will be a significant transformation, with a gradual introduction and maturity, developing new capabilities and adapting to new business models… For service providers, the time is right to deploy network slicing, build experience with delivering services in a completely new way, and prepare to maximize the full business potential of 5G network slicing.”
Check out the following publications to learn more about 5G network slicing and strategies to monetize its significant market potential:
