BT and Ericsson are suggesting network slicing, one of the key components of 5G, could boost operators' revenues by more than a third; but the stars need to align first.
Trials are underway exploring how network slicing will fit into the operator of the future. Swisscom recently told Mobile Europe network slicing would afford it greater flexibility in how it can deliver services.
Today (20 September) BT and Ericsson released a report arguing the technology could lead to higher sales and lower operating costs through operators offering different services across dedicated slices.
Speaking to Mobile Europe, Jan Häglund, Head of Architecture and Solutions at Ericsson, says the technology is one that can meet a changing connectivity landscape.
"With the Internet of Things being introduced we see a whole new scale of the number of devices, 18 billion by 2022, but those devices will be of very many different types,” he explains. “They will range from a device sending data every month, say in massive machine type communications, a sensor network, agriculture, parking meters or whatever your imagination comes up with.
"Or it could be ranging all the way up to very critical machine type communication that maybe isn't even possible in today's networks - very low latency for consumers like in virtual reality or in gaming, or in the industrial segment like robotics control or automotive.
"All in all, the requirements are growing so it begs the question of what enabling technology you need to cater for this."
BT and Ericsson found service delivery through network slicing, or dedicated functional layers hosted on shared physical resources, would generate 35 percent more revenue and a 40 percent reduction in opex than a conventional telco network delivering a multiple of services.
Häglund says what network slicing affords operators is the opportunity to deliver cultivated services in a way that they are not capable of currently. He says:
"In the study, there are up to 40 [services] but it will be difficult to do that with only manual operation. Just the sheer amount of different slices, provisioning and customer care is probably not realistic."
The report listed the now familiar list of IoT possibilities that could, or should, be controlled through slicing, from cloud robotics and remote surgery to vehicle tracking and smart city sensor grids.
Other advantages include faster time to market for new services, more efficient use of resources, as slices are scaled up or down according to demand, and more tailored services for enterprises or other customers.
As ever, there are caveats. Central to this is automation; if you can exponentially increase the number of tailor-made services an operator can offer, you need to be able to handle it but this is something that requires expenditure.
Häglund says: "That's why we modelled in an investment of automation [into the report's findings] so the effort to instantiate a new slice is minimal, and the modification of the characteristics of the slice, for example the scale or capacity, should not pass by the operator or service provider; you should be able to do it directly by the tenant, such as the car manufacturer."
Also required are large overheads, the report claims, although it is quick to note the investment pays itself back within two years, if the operator is offering 40 new automated services during that time.
However, even at five new services launched, the report found an operator will start paying off the investment in network slicing three years after deployment.
But does that heavy investment not close the door to network slicing on cash-strapped operators with nervous investors or board members keen to see quicker returns? Häglund responds: "With the trend of digitalisation of many industries, everything from manufacturing and transport to public safety or infrastructure, a significant part of that will require support, not only from connectivity but also the way services are enabled through networks. That lends itself towards service providers. They could take a significant part of that digitalisation trend.
"If you do that calculation...we have seen there will be growth opportunities if we can capture them in the right way.
He adds: "If you are struggling with growth in the consumer segment, which is very big but very challenged in terms of competitiveness, I think many of our customers could broaden their addressable market by looking to adjacent industries."
Readers will notice another "if" and that's before the issue of building the correct ecosystem of partners and customers is thrown into the mix. Are there too many variables, between investment decisions, ensuring the right kind of automation, and ensuring demand is actually there, for network slicing to work in the right way?
Häglund says: "The current paradigm is one big network with one operation but different subscribers. You're not really able to tailor the service to a new sort of industry. If you want to react to something new, then you will always have to ask whether it's worth it to upgrade your network for this opportunity. In many case, you'll come to the conclusion 'nah, let's wait and see'.
"If you introduce network slices, whereby you can logically introduce a potentially small new network, you can go for that new opportunity. We feel it is possible to do that without introducing new complexity but you need to think through your management system before doing that."
Given the wealth of research and trials, operators seem convinced that the obstacles are worth overcoming. BT is already researching the technology in partnership with Huawei. Speaking to coincide with today's report, Maria Cuevas, Head of Mobile Core Networks Research at BT, says: “The more services we deploy with network slicing, the greater economic benefit we will see, enabling us to better serve our customers. In order to achieve this vision, it is important that the industry provides cost-effective solutions to support end-to-end orchestration and adds automation to the operations and management of network slices.”