Network Slicing Will Change How Operators Do Business Featured

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Network Slicing Will Change How Operators Do Business Image Credit: Bigstockphoto.com/panuruangjan

It’s increasingly popular for businesses to own less stuff. This is true whether they are B2B or B2C, but is most obvious in the new gig economy: Airbnb is, in effect, one of the largest hotel chains out there, but doesn’t own any hotels. Uber and its rivals have massive fleets of taxis that deliver food and people around cities - none of them owned by the company itself.

These businesses give consumers that own certain assets, such as cars and homes, the opportunity to use them as part of the business. But we can also see this happen between businesses too. Where we once expected a business to own most of what it provided to its customers, we’re increasingly seeing a value chain of suppliers, corralled together to create a service.

The popular perception of mobile operators is that they provide the masts and other infrastructure that makes mobile communication possible. But operators are, in some cases, already in the process of selling off their infrastructure. This means the perception is less true than ever before - independently-owned masts, network sharing and operators divesting their infrastructure means that fewer and fewer Communication Service Providers (CSPs) own the physical assets that make what they do possible.

For Airbnb, Uber, and CSPs, owning stuff that makes their businesses work is not important. Instead, the business is taking assets owned by other people and using them in a transformative way. 5G - in particular network slicing - has the potential to change how CSPs do business in a similar way, encouraging them to do more and own less.

Network slicing and virtual networks

Network slicing has already been described as a $66bn opportunity by ABI Research. The way it will work will be akin to the way virtualisation works in cloud computing. Before, connecting to a remote server meant just that - connecting to a grey box in a building somewhere. Now, cloud computing and virtualisation means that several virtual machines can run on the same physical machine and runs across several hosts to provide a failsafe. For those using the virtual machine, the experience is the same, but for those providing the service, it means being far more efficient and being able to offer many more services.

With SDN and NFV increasingly commercially deployed, networks now offer far greater flexibility. Traditional network architectures can be partitioned into virtual elements that can be linked together. Network slicing takes this concept one logical step further. With 5G, a single physical network can be “sliced” into multiple virtual networks.

This creates opportunities for the CSP. Previously, the same services all had to exist on the same network, but now they can be separated out on to their own networks. For example, IoT traffic no longer has to co-exist with data used by business customers. Financial services data no longer has to share the same network as streaming media.

The needs of a particular network slice will define how it is configured. So, for example, a slice dedicated for automotive use will need low latency if it’s used for assisted or autonomous driving, as well as continuity of service when moving between different networks, as the device in this case is likely to moving at high speed.

Another slice may be dedicated to the live broadcast of a sports event or a concert, potentially using virtual or augmented reality. This slice would require high bandwidth and very low jitter to guarantee quality of service. Each slice would have specific SLAs, and the operator would need to assure all of these different services in order to guarantee availability and meet these SLAs.

The changing CSP model

We’ve already had a preview of the new CSP model with MVNOs - operators that, to the consumer, are the same as any other mobile operator. MVNOs don’t own any infrastructure, but by buying capacity from those operators that do, they can target a specific market sector - for example those unwilling to be tied to monthly contracts, or those for whom customer service is more important than any other level of service.

Network slicing has the potential to make more operators MVNO-like, but instead of targeting specific consumer segments with unused capacity, the CSP will be targeting a vertical with a virtual network slice that’s been configured to meet their needs exactly. Network slicing means that an operator can do way more than provide connectivity - they can connect their customers to a network that’s tuned and configured exactly as needed. Network slices mean offering a network for automotive, a network for healthcare, a network for VR media, and so on.

This potential doesn’t come without a cost. Tuning these networks to meet specific demands is demanding, and while algorithms and machine learning can do much to help keep pace, operators will be maintaining many more virtual networks than they used to. This then raises the question: should they do this and continue to maintain the physical infrastructure too? We’ve already seen infrastructure sharing deals increase, and more “towercos” emerge, who buy up infrastructure and lease it back to the operator. We expect this trend to continue.

The business of being a mobile network operator is increasingly two businesses - that of maintaining the underlying infrastructure and the business of tuning and configuring the software that makes use of that infrastructure. Network slicing could be the catalyst that will make running these businesses as separate entities far more sensible. We’re used to seeing disruption in other industries - 5G could see operators becoming more like Airbnb and Uber than they now expect.

Yuval Stein is the AVP of Product Management and Service Assurance Products at TEOCO. With more than 15 years of experience in the service assurance domain, Yuval has held key product management positions throughout his career. He brings his knowledge to the fault, performance and service domains, and uses his hands-on experience to adapt service assurance solutions to the industry challenges: digital services and network technologies. In the last years, Yuval participated in various TM Forum standardization activities related to service assurance. He has recently taken part in TM Forum NFV standardization activities, as well as related catalyst projects.

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