Ðиколай ÐаÑаев - st

Enterprise 5G network slicing to carve out $20bn revenues over next five years

Research highlights dedicated network allocation technique as an enabler for new value creation as communications service providers bolster their capabilities to go beyond connectivity revenues

Noting that 5G deployments are now in a state of proliferation, analyst firm ABI Research expects the importance of network slicing for the enterprise domain to grow, with demand for 5G slicing propelled mainly by heavy industry verticals.

ABI says there are three predominant business drivers for 5G slicing. First, it notes that new services can be deployed with little or no disruption to existing services and that with today’s networks, service agility is a challenge because the introduction of new services necessitates reconfiguration of underlying networks.

Second, ABI believes verticals can optimise network efficiency with potentially lower costs, suggesting that a shared network infrastructure used across multiple slices promotes better resource utilisation and can, in theory, reduces integration scope and complexity.

Third, ABI says 5G slicing can enable vertical partners to bring to market a wider range of services based on customised service-level agreements.

As a result, according to ABI Research’s 5G Network slicing and industry verticals market data report, 5G network slicing will generate revenues of more than $20bn by 2026. The analysis says much current discussion focuses on how various industry verticals can alleviate the operational complexity of doing business with 5G network slicing.

Drilling deeper into the value of particular verticals, ABI calculates that 5G-based slicing in industrial manufacturing applications, cellular vehicle-to-everything (C-V2X) and logistics alone could generate cumulative revenues of $12bn by 2026, representing a significant portion of an overall 5G slicing market that is likely to exceed $20bn.

“This research highlights the importance of 5G slicing as an enabler for new value creation, particularly as communications service providers [CSPs] bolster their capabilities to go beyond connectivity revenues,” said Don Alusha, 5G core and edge networks senior analyst at ABI Research.

“The discourse in a post-Covid environment will be to accelerate edge computing deployments to further develop low-latency use cases, extend 5G coverage, and reach industry consensus on how handsets and devices can support 5G slicing. Further, the industry at large now realises that to extract the value at stake, there is a need to enhance the traditional way of doing business and clearly articulate business drivers and commercial utility of slicing to vertical partners.”

Read more about 5G network slicing

Yet despite this clear opportunity, ABI cautions that it will take time for a mature, 5G slice-ready ecosystem to emerge. It adds that with the global economy rebounding from current climate of Covid-exit strategies, it is very likely that new investments will advance existing proofs of concept and trials to commercial deployments. Ultimately, it says, wholesale deployment of public networks (5G slicing) for private use requires more vertical engagement.

To that end, the analyst advises industry to realign existing commercial arrangements to include vertical partners. It says 5G slicing can serve as an enabler towards that change, but first the industry should aim to extend trust and build relationships with vertical partners. This, it adds, will go a long way to better address verticals’ pain points and identify mutually beneficial arrangements for telecoms and industry partners.  

Alusha added: “Reaping full benefits from 5G network slicing is a long-haul endeavour that will need to start small with same-vendor, campus-type deployments. Multi-vendor implementations will materialise with further industry alignments on terminal support, business model and collaboration among system integrators, vendors and CSPs.”

Read more on Telecoms networks and broadband communications

Data Center
Data Management