Network Slicing: A Potential $66 Billion Opportunity for MSPs

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Network slicing, a promising new vehicle that will become a fundamental 5G technology, is paving the way for the creation of new use cases characterized by varied experiences and personalized service level agreements. Network slicing affords the opportunity to be agile and to capture revenue that could otherwise be overlooked, but the utility in question warrants interoperability across multiple technology domains.

According to ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, network slicing stands to create approximately US$66 billion in value coming from the ever-increasing digital requirements of industry verticals.

“Telcos (aka Mobile Service Providers or MSPs) are increasingly seeking to create services that are more differentiated and tap into the growth engine of the future, intrinsically linked to a superior experience for end consumers, and operational simplicity for enterprises and end verticals,” commented Don Alusha, Senior Analyst at ABI Research.

“Network slicing revenues will eventually be on an upward trajectory, driven by digital, cloud, and security requirements of multiple industry verticals, particularly for the trio of manufacturing, logistics, and automotive. Realizing the full revenue potential is dependent on essential slicing infrastructure from vendors, and pertinent applications delivered by MSPs.”

There are some significant PoCs and pertinent commercial activities in the market especially from BT and Swisscom, and more are expected during 2018 and beyond. “This is encouraging and lays the foundation for widespread commercial deployments even before 5G diffusion,” noted Alusha. There are specific vendors in the market who are addressing end-to-end slicing scenarios that pull together a number of technologies, Nokia and Ericsson chief among them.”

At a broad industry level, significant work is taking place to institute best practices around multiple standards and technologies that may need harmonization to enable end to end slice implementations.

“MSPs and vendors are pursuing different models of collaboration with vertical markets and growth for each market will be driven by premium services, revenue potential and ability to address existing challenges in the short and medium term,” concluded Alusha. “Vendors should aim to eliminate complexity through automation and ‘deep’ orchestration, a feat that calls for close collaboration with standard bodies to standardize and achieve alignment apt for commercial deployments and ecosystem integration.”

About ABI Research

ABI Research provides strategic guidance for visionaries needing market foresight on the most compelling transformative technologies, which reshape workforces, identify holes in a market, create new business models and drive new revenue streams. ABI’s own research visionaries take stances early on those technologies, publishing groundbreaking studies often years ahead of other technology advisory firms. ABI analysts deliver their conclusions and recommendations in easily and quickly absorbed formats to ensure proper context. Our analysts strategically guide visionaries to take action now and inspire their business to realize a bigger picture.