5G network slicing is a transformative technology, enabling communication service providers (CSPs) to deliver highly customized network solutions tailored to the diverse needs of modern enterprises. This capability allows for the creation of multiple virtual networks or "slices" on a single physical infrastructure, each optimized specific applications, devices, locations, enterprises and verticals, creating great potential for driving innovation and efficiency across industries. With growing enterprise recognition of the importance of cellular wireless access, slicing can solve connectivity challenges that other access services cannot.
Research conducted by GlobalData in 2024 with large enterprises, CSPs, and managed service providers (MSPs) in the U.S. and Canada shed light on the opportunities and challenges surrounding 5G network slicing adoption, captured in a report published recently by Ericsson: Read report.
5G Standalone (5G SA) is the foundation
The cornerstone of network slicing enablement lies in the deployment of 5G Standalone (5G SA) architecture. Unlike non-standalone setups that rely on 4G core infrastructure, 5G SA is designed to enable network slicing. Its cloud-native core, coupled with advanced features like dynamic resource allocation and software-defined networking (SDN), empowers CSPs to deliver enhanced capabilities and tailored services. This transition to 5G SA is not merely an upgrade but a fundamental shift that unlocks the true potential of network slicing.
Enterprise value and requirements: A tailored approach
Enterprises across key industrial sectors are increasingly recognizing the value of 5G network slicing in addressing critical operational needs. The research highlights that a significant 54% of respondents cite increased productivity/efficiency as the primary anticipated benefit, closely followed by enhanced customer experience. The inherent flexibility of network slicing enables a wide range of deployment scenarios, from horizontal solutions like virtual private 5G networks to bespoke implementations designed to meet unique industry requirements. When asked about the features of network slicing for their key use cases, more than half of enterprises said they prioritize scalability (71%), security (62%), throughput (60%), and reliability/availability (58%), while latency is also a priority for nearly half (48%). These priorities reflect the diverse operational needs that network slicing must address to meet enterprise expectations.
Driving market development: Aligning with strategic business priorities
To accelerate market adoption, CSPs must align 5G network slicing solutions with enterprises' strategic business priorities. These include security (for both IT and OT environments), business continuity, customer experience, and worker safety. By addressing these priorities, CSPs can position network slicing as an indispensable tool for achieving tangible business outcomes.
CSP readiness and market opportunities: A strategic transition
North American CSPs are actively progressing toward 5G SA deployments, recognizing their pivotal role in unlocking the full potential of network slicing. Most CSPs in North America anticipate significant market opportunities within 3-4 years, contingent upon widespread 5G SA deployment. A substantial 59% of North American CSPs foresee a significant opportunity in 5G network slicing. Ecosystem collaboration is essential to bridge gaps in vertical-specific readiness, and proactive enterprise engagement with validation of use cases through proofs of concept (PoCs) is crucial for market adoption.
Overcoming barriers and realizing potential: A collaborative effort
While the market opportunity is substantial, CSPs must address key enterprise concerns, including clarity of use cases, security concerns, and suitable devices. To overcome these barriers, CSPs should highlight clear enterprise requirements for 5G network slicing, demonstrate a clear ROI, provide high-performance and reliable connectivity, and offer flexible contract models. They also need to step up efforts around educating both their enterprise customer base and their internal teams. To create value, solution innovations are essential, while go-to-market and business model innovations are necessary to capture that value.
Key recommendations for bridging the gap:
For CSPs:
- Prioritize Full 5G SA Deployment: Accelerate the transition to SA to unlock full slicing capabilities.
- Expand Ecosystem Collaboration: Foster strategic partnerships with technology providers and device manufacturers.
- Drive Enterprise Engagement: Proactively engage with enterprises to validate use cases and build trust.
- Develop Tailored Network Slicing Packages: Design solutions that address specific enterprise needs and priorities.
- Create Flexible Contract Models: Offer pay-per-use or subscription models aligned with usage and outcomes.
For Enterprises:
- Clearly Define Use Cases: Identify specific operational needs that network slicing can address proactively.
- Prioritize Security Requirements: Validate that slicing solutions meet stringent security standards.
- Seek Clear ROI Demonstrations: Request detailed ROI analyses from CSPs.
- Collaborate on PoCs: Participate in PoCs to validate the effectiveness of slicing solutions for your use case.
- Integrate Slicing into Digital Transformation Strategies: Incorporate slicing into broader digital transformation initiatives.
By fostering collaboration and addressing key challenges, CSPs and enterprises can unlock the transformative potential of 5G network slicing, driving innovation and efficiency across industries.
