Pamela MALLETTE: Welcome back to 15 minutes with 5G. A bi-weekly discussion with the industry big brains about the latest developments in 5G and what they mean for consumers, businesses, and society in general.
Joining us by phone today is Jan Häglund, Head of Architecture & Solutions at Business Area Digital Services at Ericsson.
Welcome Jan, it’s really great to have you!
Jan HÄGLUND: It’s good to be here, thank you, Pam
MALLETTE: Ericsson recently published a new study with operator BT that quantifies the benefits of network slicing for operators. Network Slicing allows operators to segment the networks to support particular services and deploy multiple logical networks for different service types over one common infrastructure. Jan, can you tell us a little about the study, what the objective of it was and what were the scenarios you looked at?
HÄGLUND: Sure, with new services being introduced every day and with 5G being quite close now in time, we need to look at how do we effectively and efficiently deliver these services. And I think we don’t know everything about 5G and all the use cases but what we do know is that they are going to be a lot of them, they are going to be pretty diverse, and it’s going to touch both consumers like you and me and also industries — industries like transport or utilities, health care and what not. We need to build networks that can cater for this pretty wide range of requirements. What we did with the British telecom was, in some detail, to actually look into the economics of how can you actually build effective networks to deliver on these services in an economically viable way.
MALLETTE: That’s great, so what where the scenarios you looked at?
HÄGLUND: We looked at a couple of scenarios.
- One scenario was to, more or less, do what we have today. We called it one big network. Where you have one network that can cater for different kinds of services, different kind of users.
- Then we had a separate scenario that we called several networks or separate networks and there the idea was that if you want to address a new industry or new opportunity or new enterprise, you build a separate network with separate software and separate infrastructure for that industry.
- And then the last scenario was network slicing where you basically share the infrastructure so it’s all the same but then you build logical networks based on network slices educated for these different industries and customers.
MALLETTE: Ok, so it was basically a comparison of one network versus a bunch of physically separate networks versus a bunch of different slices of one network.
HÄGLUND: Yes, you can say…yes.
MALLETTE: So, what were the results?
HÄGLUND: Well we did a lot of analysis together with BT and I am really happy that we had the opportunity to work directly with such an experienced operator. We went in and analyzed what is the revenue potentially in these different scenarios, what are the different costs associated, and in brief, you can say that the result was pretty overwhelming — a positive result for the network slicing scenario. We figured out that in this scenario where we introduced 40 new services per year based on network slices, we could see a reduction in OPEX, actually a 40% reduction in OPEX. We saw an increase in revenue potential by 35% and all of that resulted in a much higher contribution —150% higher than having done it in a sort of more traditional way which would be the one big network scenario. So pretty interesting actually and very favorable to network slicing.
MALLETTE: Well that’s great. So, I guess that means they have to be investing in different areas in order to take advantage of some of those reduced operating expenditures and to gain that CAPEX efficiency. And what can they do now to get their core network ready?
HÄGLUND: Yes, you are right because one of the prerequisites for network slices to really work out is that you need to prepare your network for automation and because with so many new services introduced and reaching out to many customers, the only way that can work in a practical way is that customers are able themselves to take care of service configuration or monitoring so that new network slices can be introduced very easily with one touch kind of deployment.
There was an investment in automation that was part of the business case that we did together with BT but we actually came to the conclusion that the investment in automation paid off pretty quickly — I think over two years. But it’s right, that’s part of the preparation that you need to do. I think another preparation is to start thinking about network slicing now. Actually, network slicing is possible to do pretty much now ahead of 5G in fact. Network slicing is as it seems a very promising mechanism to build networks, starting now and then going into 5G.
MALLETTE: So, what are some of the things that they can do now to start taking advantage of network slicing? I actually didn’t know that it could be done prior to 5G.
HÄGLUND: No, it can. There are a couple of things happening already now that you can see as the forerunners for network slicing. One example is IoT services where several service providers already this year and next year are introducing IoT services based on the new LTE standards, narrowband IoT and Cat-M1.
So, you can see that as a kind of initial deployment of network slicing. Also, we have deployments where industries like factories or mines or things like that are asking for local networks. That you can also see as kind of forerunners of network slices. So, start to explore that, start to think through your management strategies and then as soon as the whole mechanics around network slices are ready during early next year, then start to learn about this. It’s not all about technologies, actually it’s a lot about business models, new customers and things like that.
MALLETTE: It sounds like we have a lot to share with our customers in terms of recommendations for where an operator might start in terms of both network automation and what use cases might be the best ones for network slicing?
HÄGLUND: For sure, I think we are having a lot of discussions and I think it’s a mutual thing. We need to learn about operations, we need to learn about new customer segments and I think we have a few things also we can bring to our customers of course.
MALLETTE: If there is one big take away from the study, what do you think it is?
HÄGLUND: You know I think the big take away is that in order to really reap the full potential of 5G, it’s about time to think about network slicing as the vehicle to deliver those specialized services to different industries and different enterprises. 5G is really coming! So, ready or not? You better choose ready!
MALLETTE: That’s great Jan. I really appreciate your time today. Thank you so much for sharing the results of the study and we look forward towards trying to implement some of those early actions with our customers.
HÄGLUND: Thank you, my pleasure.
MALLETTE: Thanks for spending 15 Minutes with 5G, if you would like more information please visit Ericsson.com/5g-northamerica. And if you like what you have heard please subscribe to the podcast.