Marek’s Take: Make way for the 'slice economy'

Marek's take

I first wrote about network slicing back in 2016 when 5G networks were still only a concept. At the time, several of the big infrastructure vendors described network slicing as being one of the main benefits of 5G because it allows operators to manipulate the network on the fly and orchestrate certain capabilities, or slices, while still running one common underlying infrastructure. 

At a high level, network slicing makes it possible for operators to provide different “virtual” slices of the network to different customers and each slice will have its own functionality whether that’s a certain bandwidth, latency level or a specific type of security. This is significant because it means operators could dedicate a slice for a low-latency application like cloud gaming, or designate a slice in a certain geographic region for an enterprise or a venue.

Fast-forward five years and today we have three nationwide 5G networks in the U.S. And one operator — T-Mobile — has a nationwide 5G standalone (5G SA) network. 5G SA is important for network slicing because the 5G SA network standard includes a 5G core, which is fundamental to making network slicing work. AT&T and Verizon have both said they are working on 5G SA.

Yet, five years after the buzz about network slicing first started to grow, no U.S. operator has commercially deployed the technology. And that’s important because many experts say that the “slice economy” that is made possible by network slicing is the primary way that operators will make money from 5G.

According to a survey on network slicing that Ericsson conducted late last year with service providers, operators recognized that network slicing is key to helping them increase revenues, tap into new market segments like transportation, healthcare and manufacturing, and meet enterprise customers’ expectations. However, they also said that they are unsure of how much of their network capabilities they should expose and they also said they still need to define underlying business and pricing models before they can move forward.

The study found that the operating model was viewed by more than 20% of those surveyed as being the biggest business challenge to network slicing, followed by pricing and business strategy. Survey participants also said that the biggest technology challenge to deploying network slicing was OSS and orchestration followed by security.

Nevertheless, the experts that I spoke with predicted that we will see some network slicing commercialization in the coming months. The early adopters will start deploying network slicing later this year, according to Paul Challoner, VP of network product solutions for Ericsson North America. More operators will follow in 2022. However, Challoner noted that as the Ericsson survey indicated, there are many elements of the technology that need to come together for network slicing to become a reality.

“Things like having a 5G SA architecture is a pre-requisite to having true end-to-end network slicing,” he said, adding that users also need to have a 5G SA compatible device. Although it is possible to do network slicing with physical hardware, Challoner said that if an operator has Cloud RAN, that means they will have more flexibility and be able to move workloads around.

John Byrne, service director for telecom, technology and software services at GlobalData, noted that while many of the technology challenges with network slicing are being solved, such as having operators migrate to 5G SA and deploy a 5G core, the business model challenges are more difficult to resolve. “The problem is not one size fits all,” he said. “The value of creating a network slice in a factory setting is different from what it is with a utility or a stadium or another network slicing use case.”

However, Byrne added that many vendors are starting to create network slicing templates that operators can follow that will provide the performance characteristics that are needed for a certain type of network slice.

“Once you do it in one situation, then you can tweak it for another customer,” Byrne said. “That’s a long process and that is the part that is tricky.”

While operators like T-Mobile have moved to 5G SA, others like AT&T are still in the process and haven’t committed to a time frame moving to 5G SA. During FierceWireless’ 5G Blitz Week that took place last week, Mazin Gilbert, vice president of network analytics and automation at AT&T Labs, told me that the company has fully virtualized over 75% of its core network and is in the midst of deploying 5G SA. And while he said that 5G SA will bring the operator new capabilities such as network slicing, he wouldn’t provide any details about when that will happen. “We will announce those timelines in due course,” he said.

But Challoner remains optimistic that all the necessary components to make network slicing happen are coming together and he says there are many use cases that will be perfect for the network slicing model. “The ability to offer slices is the underpinning to the success of 5G," he said. "It is a great new opportunity."