Features & opinions | 5G, Ericsson, monetization, Networking-slicing

Realizing 5G network slicing monetization opportunities

February 28, 2023 | TM Forum Web Support

Each path to network-slicing revenues is defined by unique business, technological and operational challenges that require strategic planning. That’s part of the reason why many of today’s communication service providers (CSPs) are turning to experienced specialists for advice about how to simplify and accelerate their network-slicing evolution. In the first of our two-part network-slicing blog series, our experts share key insights based on their work with some of the world’s leading CSPs.

Network slicing is a near-term opportunity. It’s expected to help drive the 5G standalone (SA) monetization journey and is seen as one of the enablers for B2X or B2B2X services. To seize these network slicing opportunities, CSPs are gearing up by testing a wide range of strategies and use cases, with frontrunners having already executed technical or commercial proofs of concept and successfully launched several slicing products.

Figure 1. For CSPs, network slicing provides numerous advantages such as customized functionality, quicker scale-up and time-to-market, and the generation of new revenue prospects.

2023 and beyond: how are the frontrunners approaching network slicing opportunities?

Looking at industry frontrunners yields valuable insights into how they’re attempting to bring network slicing to the market. At Ericsson Consulting we see clear trends in relation to strategy choices and top verticals/use cases being pursued.

Figure 2. The three top choices CSPs are making.

At a high level there are three main choices CSPs are making:

  1. Choice of strategies: When starting their network slicing journey, CSPs are choosing between either starting off small by offering a simple solution, working with enterprises on specific use cases, or building horizontal capabilities:a) Starting off small and simple: Many leading CSPs have already begun their network-slicing journey by starting off small and simple. This means offering services that are simple to deploy but provide a differentiator from existing services. For example, Singtel launched streaming plans based on slicing for special events such as the Singapore Grand Prix 2022 and the FIFA World Cup, and Telia launched a slice-based fixed wireless access (FWA) service.b) Joint collaboration: The second set of CSPs are working in collaboration with enterprises to bring specific use cases to market. By working directly with enterprises to identify, test and launch slice offerings, CSPs can more comprehensively understand the needs and challenges of enterprise customers and can develop and test specific offerings before they launch with scale. For example, Deutsche Telecom is conducting several use case-based tests, such as cloud gaminglive video production, and an Advanced Driver Assistance Systems (ADAS) collaboration with car manufacturer BMW.c) Building horizontal capabilities: The third set of CSPs is focused on building horizontal capabilities. Which means deploying various capabilities like dynamic slicing, edge computing, and exposure to enable different types of use cases. We see a lot of CSPs trialing and testing such capabilities, in preparation for large-scale commercialization. For example, Telstra has deployed an award-winning orchestration solution that enables fully automated 5G slicing for enterprises on a commercial network.
  2. Choice of verticals/use cases: The second choice CSPs are making is regarding the kind of use cases they plan to engage with at the start of their slicing journey. This choice is a difficult one as slicing theoretically enables all types of use cases (eMBB, mIoT, cIoT) across all verticals, making it difficult to identify the top use cases for individual markets. To help understand the top use cases being explored by CSPs, we performed a small analysis (see Figure 3) – on the first axis (horizontal) we plotted use cases being trialed using 5G SA while the vertical axis charts the number of trials executed using the network slicing capabilities of 5G SA. This gives us a general sense of the amount of interest there is from both a 5G and slicing perspective. In terms of the top verticals and use cases being pursued, live-video broadcasting/ production is the most-trialed use case, with cloud gaming and immersive reality also being of interest to several CSPs. Based on discussions with CSPs, there is also high interest in fixed wireless access (FWA) and drone surveillance.

Figure 3. shows the seven most popular use cases based on the number of slicing trials identified from CSPs.

  1. The choice for slice deployment: The third choice focuses on the kind of slice deployment CSPs should pursue in the short term, such as deploying a nationwide slice or a local area enterprise slice and a preconfigured or a dynamic slice. Again, these decisions are highly dependent on which verticals/use cases are prioritized in the region and the CSPs’ deployment readiness.
Deploying a nationwide slice or a local area enterprise slice: In some geographic areas, CSPs have identified their top verticals as manufacturing, construction, transportation, and railways, while others are focusing on the national-level need for mission-critical services, government services, compliance (for example PCI), connected cars and horizontal services (e.g., private networks, IoT for industries and cloud gaming). In contrast, a few CSPs have honed in on more specialized areas, such as ports, while others are looking at on-demand slicing for high video-upload type use cases or sporting events.

A pre-configured slice vs a dynamic slicing solution: CSPs must also decide whether to deploy a pre-configured slice vs a dynamic slicing solution, which is basically choosing between deploying and managing slicing manually vs doing it using automation. A number of factors impact a CSP’s decision in this space, some of them are overall strategy (starting small and simple, focusing on horizontal capabilities and providing NaaS), the expected ramp-up of slicing, and the needs of the industry.

Beginning your journey: How to tackle key priorities

Figure 4. The key priorities CSPs must address on their network slicing journey.

Even though we see a lot of activity from CSPs, network slicing is a new technology and, as with any new technology, there are areas that need specific focus to enable wide-scale adoption. From our perspective, there are four key priority areas that all CSPs need to tackle to enable a long-term strategic approach, which are:

  1. Identifying top use cases for slicing: CSPs are still struggling to determine which is the best vertical/best use case to pursue. Whether to use vertical use cases vs horizontal use cases. For example, slices for the Advanced Driver Assistance Systems are very specifically created for the automotive vertical, whereas horizontal use cases, such as AR/VR, and remote control, are applicable to multiple verticals. While the slicing use cases being pursued globally provide direction, the answer to which use cases/verticals to target requires a thoughtful methodical analysis based on the local market and CSP realities.
  2. Defining compelling business cases for slicing: Verticals/enterprises want proof points, but the industry is in the early stages of trialing this technology and building proof points – a catch-22 situation. Hence it is extremely important to educate enterprises on the benefits of slicing and engage in trials to create such proof points.
  3. Determining how to bring slicing to the market: We believe that every vertical will have unique go-to-market (GTM) models. This would require CSPs to have a detailed understanding of the needs and challenges of every vertical that they want to target.
  4. Implementing operational readiness: Slicing is a fundamental shift in the way the network is deployed and offered. Hence, there is a strong need for CSPs to enable their organization to be able to deploy, manage and sell network slicing. CSPs will need AGILE and DevOps capabilities to add flexibility in ways of working, enhance capabilities within the organization, and integrate processes to manage network slicing, which will require a level of organizational transformation. From our viewpoint, this is one of the key priority areas – and something that takes time. It should therefore be started in parallel with technical and business planning.


Addressing these key areas and creating a strategy

Overall, Ericsson Consulting believes that CSPs need to define a clear long-term network-slicing monetization strategy that brings together the following business, technology, and operational aspects:

Figure 5. CSPs need to define a clear long-term network-slicing roadmap.

  • A clear methodology to identify the top verticals/use cases – basis internal strategic priorities, market needs, technology capabilities and readiness, ecosystem maturity, return on investment (ROI) analysis, etc.
  • Intent to co-create slicing proof points with enterprises to be able to convince enterprises of the benefits of slicing
  • Understanding of the right kind of industry expertise needed to develop customized GTM/vertical/value chain roles and how to develop such expertise. For example, build vs buy vs partnership, partner availability, etc.
  • A clear roadmap to develop organizational capabilities to support slicing business

In a nutshell: Our advice moving forward

Network slicing is a near-term opportunity, and we are seeing CSPs deploying slices to address industry and consumer needs. All front runners are already exploring this technology, with some also evaluating various GTM and business models that can be used to provide slicing services.

Our final advice to CSPs is to keep the following points in mind when navigating key priority areas:

Don’t be afraid to start with what you have: Start small by leveraging existing technical capabilities, and gradually add complexities to scale.

Apply a business-led approach: Slicing is a business proposition and hence needs a business-focused approach. What this means is to explore network slicing working with enterprises by focusing on a few use cases and experimenting through lighthouse projects.

Engage and learn with the ecosystem: Employ a collaborative approach to develop E2E solutions irrespective of value chain play. CSPs must remember that when they build a solution, it’s not just about technology readiness but also about ecosystem readiness – this is particularly true for slicing because, as an emerging solution, it also requires CSP and ecosystem maturity.

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