Telecoms networks have been traditionally designed to manage traffic at peak times. Network slicing gives customers the ability to scale network resources up and down as needed, says Tim McElligott, senior analyst at TM Forum. Using slicing and network as a service (NaaS), Communication Service Providers (CSPs) can now begin developing new business models to provide varying levels of service to enterprises.
Network slicing allows the physical network to be split into multiple virtual networks. We can compare this to going from a single-lane road to a multi-lane highway where users change lanes based on their requirements. This way, slices and services can be configured to the specific needs of customers, applications and industry verticals. While on one hand, this opens the way for innovative revenue streams with targeted customer experiences, it also introduces significant complexity in managing the lifecycle of slices, services and network resources across network domains and multiple vendors.
Network slicing joined the hype cycle in 2019. Now, CSPs are taking steps to make 5G network slicing a reality. Within their organizations, doubts are being brushed aside and trials are now moving ahead with high expectations. In a TM Forum report exploring the monetisation of 5G, we found that B2B services enabled by network slicing ranked highly as an area that would have a significant impact on business in the long and short term.
This is not to suggest that every hurdle has been overcome. Of course, 5G slicing won’t be able to go mainstream until there is widespread deployment of 5G. This was thought to be about a year away, but with the disruption caused by COVID-19 timelines are less certain.
Another major obstacle is the monetisation of slicing. Now is the time for CSPs to focus their operational approaches to slicing and figure out how to turn it from a technical connectivity capability into customisable enterprise services that can be monetised easily end to end across partners.
Monetising slicing
A main benefit of 5G slicing is that it will enable CSPs to monetise varying levels of service and can be priced based on the guarantees of availability, level of quality, level of security, throughput, latency and many other performance indicators. Operators’ biggest decision, in fact, may be which service model to offer.
The reality is that there are a range of use cases waiting to be unlocked by 5G network slicing – especially around smart cities and manufacturing. Within cities, applications relying on data from a wide range of sensors and devices will have different performance requirements, so they are prime candidates for services based on network slicing.
There are also use cases being developed in entertainment, transportation, mining, education, emergency services and multi-access edge computing with trials and proofs of concept to address the challenges of delivering slice-based 5G services to these industries.
Thinking about these verticals, in order to monetise services based on slicing, CSPs can provide service level agreements based on customised performance metrics, such as quality of service. Or they can offer NaaS, which build slice templates with tailored characteristics to support a specific service.
For customised performance metrics, operators will need to decide how many to support individually and how much to charge for them. For NaaS, they must create slice templates, which are models based on user requirements and applications that are mapped to the network resources required to support them.
The COVID-19 impact
When making any technological decisions or prescribing any strategy COVID-19 cannot be ignored. The viability of vertical markets must be viewed through a new lens as the pandemic and growing civil unrest continues to be at the front of everyone’s mind.
Until the pandemic, United Nations data showed that 55% of the world’s population lives in cities with a prediction that this would grow to 68% by 2050. As the office becomes a virtual environment and safety cannot be guaranteed, people may begin leaving their expensive city apartments and replace them with suburban areas or smaller cities and towns. While this does not negate the need for smart cities or network slicing, it does complicate investment in 5G base stations and infrastructure.
An increase in remote working means capacity might be needed in suburban or rural areas rather than city centres, which is where most current investment is focused. The healthcare industry could see the opposite effect with the need for sensors to monitor health and telehealth driving an increase in slice-enabled services. Likewise, the need for continued social distancing could increase the demand for drones and other surveillance solutions that lessen the need for human interaction and promote isolation.
The effect of the pandemic on the rollout of 5G is uncertain. CSPs and governments could decide to pull back from capital investment in anticipation of lost revenue and slower growth, or they could follow the lead of Singapore and move straight to deploying standalone 5G in anticipation of economic recovery. CSPs may need to do the same when it comes to 5G network slicing: plan for a high-demand future and leapfrog to an operations environment that can monetise slicing.
Avoiding customer-deterring jargon
While planning it’s worth considering the needs and perceptions of customers, currently we know that enterprises do not care about slicing per se. Ultimately, they want to know what their options are in terms of the service they will receive. Exposing customers to the complexity of slicing will only scare them off and lessen the possibilities of adoption.
CSPs are aware of this. The market success of slicing will be related to how simple and usable a slice is. Like pizza, ordering and consuming slices needs to be as frictionless as possible. To achieve this, operators must focus on service design, ordering, self-service modifications, quality of service, pricing, charging and lifecycle management.
This is why it is crucial for CSPs to break the habit of talking about slicing in technical terms. 5G slicing will not appear as an item in the service catalogue. It is not a service as such but rather a means of delivering customised services. Customers won’t ask for a slice, and they don’t need to know their service is being delivered using slicing technology. CSPs and their partners must focus on slicing from a user experience perspective.
Start planning
Overall 5G network slicing is a huge opportunity for CSPs, enabling a variety of new services. Of course, it will not be possible to roll these out until standalone 5G has been deployed. The current pandemic has created some issues around this, however it does not mean that CSPs should be deterred from testing and planning ahead.
There are a number of CSPs successfully testing slicing capabilities in the hope that, a year from now, they will be successfully delivering and managing new slice-based services to companies across a plethora verticals. A recent Amdocs survey found that 84% of the 50+ CSPs surveyed claimed to be involved in trials this year. Those that wait too long will be left behind.
The author is Tim McElligott, senior analyst at TM Forum
About the author
The author is Tim McElligott, senior analyst at TM Forum. McElligott joined TM Forum in January 2019, after working as Senior Analyst at Frost & Sullivan, Editor in chief of Billing & OSS World (B/OSS magazine), and Senior Editor at Telephony. He is currently focused on: industry transformation and collaboration, open architectures, digital service delivery and monetisation, automated service development and assurance, and network, customer, and business intelligence.
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