Network slicing – a 5G monetization gamechanger?
As part of their 5G network modernization programs, service providers have already spent billions of dollars on new license frequencies and network hardware upgrades. The 5G business case and return on investment are still evolving but it seems that the big change in 5G versus 4G is the paradigm shift from monetizing volume to monetizing quality. This means supporting diverse services, each with specific performance requirements, on a common network platform. With 5G, service providers will have a network that can be tailored or ‘sliced’ to meet the needs of specific use cases, services, applications and customers.
There seems to be general agreement that network slicing is a powerful 5G enabler that brings commercial opportunities whilst delivering optimized return on investment, faster time to market and reduced cost and risk of innovation. But, as discussed at our recent virtual roundtable hosted by Fierce Wireless, does this mean network slicing really is a 5G monetization gamechanger?
When it comes to 5G network slicing use cases, the roundtable participants – Mavenir’s Dejan Leskaroski, Ian Gillott from iGR and Amdocs’ Oren Marmur– couldn’t agree on a single killer use case. However, they were in total agreement about the paradigm shift from 4G to 5G, in particular the part played by network slicing. In the past, the general approach used to be to first build your network and then work on defining the services that run on top of it. With network slicing, this is turned on its head. Now you need first to define the business requirements, and only then configure each network slice with the necessary network capabilities to deliver the specific service requirements. Network capabilities are driven by service requirements and not the other way around.
This clear paradigm shift highlights the gap that exists today between the business enablement layer, which looks after ordering, charging and billing (monetization if you like), and the network layer which is currently being expanded, virtualized and sliced. Closing this gap through integration between the network and the business enablement layers is absolutely key to the successful monetization of slice-based services.
As part of the large investment required to ensure systems are 5G-ready, many service providers are already building a modernized, omni-channel digital front-end, together with a more advanced business enablement layer. However, these changes must be supported by network capabilities if service providers are to create innovative service offerings based on their new business enablement capabilities.
For example, if a service provider decides to offer a new ultra-low latency service, the self-service portal, digital front-end and charging systems can be set up accordingly. But the network itself also needs to be able to deliver the promised SLAs around things like placement, serviceability, latency, etc. And the reverse is true too. What if the network can deliver bandwidth on demand but the charging system isn’t flexible enough to offer real-time charging? While service providers can build an amazing virtualized and software-driven network, if they are unable to expose those network capabilities to the customer-facing business enablement layer, then there is no way of converting these new network capabilities into business revenue-generating service offerings.
In shifting the starting point for monetization from the network to the service, network slicing really is a 5G monetization gamechanger. So, what can service providers do now to prepare for commercially successful 5G network slicing? Well there is one thing our roundtable panel clearly agreed on: 5G network slicing requires a complete shift in the way network is managed, as well as in the way services are deployed and rolled out. Service providers can lay the foundations today by exploring the best way to bridge the gap between the network layer and the business enablement stack. With this as a starting point, service providers will be in a strong position to manage the challenges of 5G deployment and succeed in monetizing 5G slice by slice.
Watch the virtual roundtable discussion to learn more about the panel’s views on laying the foundations for 5G monetization.