ABI Research says the demand for 5G slicing will be propelled primarily by heavy industry verticals. Industrial manufacturing, C-V2X, and logistics alone will potentially generate cumulative revenues of US$12 billion by 2026, representing a significant portion of an overall 5G slicing market that will likely exceed the US$20 billion mark.
Much of the discussion at present focuses on how various industry verticals can alleviate the operational complexity of doing business with 5G Network Slicing.
Don Alusha, 5G Core & Edge Networks Senior Analyst at ABI Research, says value creation will be a key factor towards the success of 5G and hope is being pinned on 5G slicing to do that.
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 realizes 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”
Don Alusha
Business drivers for 5G slicing
One, new services can be deployed with little or no disruption to existing services. With today’s networks, service agility is a challenge because the introduction of new services necessitates reconfiguration of underlying networks.
Two, verticals can optimize network efficiency with potentially lower costs. A shared network infrastructure used across multiple slices promotes better resource utilization and can, in theory, reduces integration scope and complexity.
Three, 5G slicing enables vertical partners to bring to market a wider range of services based on customized service level agreements (SLAs).
It will take time for a mature, 5G slice-ready ecosystem to emerge. With the global economy rebounding from the current climate with COVID-exit strategies, it is likely that new investments advance existing proof of concepts (PoCs) and trials to commercial deployments.
Ultimately, wholesale deployment of public networks (5G slicing) for private use requires more vertical engagement. To that end, the industry should realign existing commercial arrangements to include vertical partners. 5G slicing serves as an enabler towards that change, but first, the industry should aim to extend trust and build relationships with vertical partners.
That will go a long way to better address end verticals’ pain points and identify mutually beneficial arrangements for both telecoms and industry partners.
“Lastly, 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 materialize with further industry alignments on terminal support, business model, and collaboration among system integrators, vendors, and CSPs,” Alusha concludes.
