The mobile services landscape is being transformed by 5G, which is bringing new capabilities and opportunities for communication service providers. But it also brings challenges in how to deliver these new services and profit from 5G network investment — often because these services take providers into environments that differ from the tried and tested “device plus connectivity” subscription template. The business model needs to change the more the service provider moves toward emerging domains such as the Internet of things (IoT) and automotive.
The foundation for 5G profitability isn’t built on just one service environment, but many — a diversity of services will be critical. Standalone 5G supports experimentation with service and business models, based on network performance characteristics such as bandwidth, latency, mobility, location and reliability, to enhance the quality of experience for specific applications, such as data localization with network slicing for private networking. This allows service providers to go beyond volume-based traffic and subscription models to offer a broader range of innovative services, targeting traditional and new markets.
Potential New Uses
The standalone 5G core is cloud-native and designed as a service-based architecture, using edge computing and software-defined networking principles to provide an extended range of 5G capabilities. These include more responsive, automated and reliable networks and better security, as a 5G core network can offer advanced end-to-end encryption and improved security software. Standalone 5G is also designed to connect more devices simultaneously, so it can support services requiring mass-scale device connectivity. These characteristics mean upgrading to standalone 5G could open a range of new uses and service environments, such as:
- Wireless Ethernet, using time-sensitive communications and deterministic networking to enable wireless Ethernet networks in many industrial locations to be integrated with and extended by 5G networks.
- Wide-area IoT at scale, harnessing the efficiency of reduced capability 5G NR-Light to streamline 5G device requirements and support mass-scale industrial applications.
- Private networks, supporting a private connectivity platform over 5G, allowing a sector to deploy, control and manage its application environment.
- Precise positioning, using the low latency of standalone 5G to support latency-sensitive applications like spatial positioning, with uses often demanding centimetric precision.
- Low-latency experiences, enabling delay-sensitive applications such as extended reality and cloud gaming using edge computing resources.
- Voice over 5G.
Standalone 5G is needed to support new 5G uses such as mass-scale IoT, extended reality and automotive, but it also supports network slicing, a capability that potentially runs through many of these new service environments.
Network slicing allows multiple logical networks to be created on top of a common shared infrastructure, which may consist of purpose-built hardware performing physical network functions, or virtualized off-the-shelf hardware performing virtualized network functions. In effect, this “slices” the network so that different services can run across a single physical network and enable different service-level agreements or quality of service without compromise.
This has transformative potential. Network slicing is a cost-effective mechanism to deliver differentiated connectivity, customized to the needs of customers, applications, service environments and devices, and also maximizes the network’s operational efficiency.
It will play a crucial role in delivering differentiated connectivity for the full range of mobile network users and services, be this in a smart factory, a drone system or real-time gaming or video streaming, because it can support many new services with customized quality of service, based on connectivity performance characteristics.
These requirements could be based on characteristics such as speed, latency, prioritization, cost or even the location to which traffic is routed, to suit different traffic or application types. Essentially, network slicing is a dedicated service over non-dedicated infrastructure.
This has numerous benefits. Network resources are shared by different slices, reducing hardware and energy costs; in traditional dedicated networks, each would need its own dedicated network equipment. Each slice is independent and can’t interfere with the traffic in another slice. Also, a slice can have its own physical and digital security requirements: if one slice is breached by a cyberattack, security postures contain the breach to stop it from spreading to another slice.
From a network management perspective, not only can slices be initiated and terminated on demand within minutes, but the risk of introducing and running new services or migrating existing services is lowered because new technologies or architectures can be launched on isolated slices.
For example, network slices for voice applications would be engineered to minimize latency and prioritized over best-effort video traffic from sources like YouTube and TikTok for access to radio network capacity, whereas video stream slices would accommodate larger packets, allow buffering and so on. An autonomous car would need vehicle-to-network connectivity with low latency but not necessarily a high throughput. Watching a streaming service while the car is moving would require high throughput and is susceptible to latency. Both would be able to be delivered over the same common physical network but on separate virtual network slices, optimizing use of the physical network.
Considerations for Standalone 5G Services
Identifying a strong business case and clear technical and commercial road maps for new services is vital. One major consideration in service creation is the role of the provider in the value chain, with different approaches affecting the profit potential of the application. These roles include:
- Service creator, creating the service, possibly as a managed offering. It can add value through ecosystem partners’ products.
- Service enabler, enabling the service, exposing portions of its operations and business support systems and sharing revenue with a third-party content provider.
- Network provider, supporting the service by providing connectivity, with revenue based on usage or subscription.
Another important consideration for successful service modelling is having a dynamic and responsive service creation environment, one in which the provider can operate on a trial-and-error basis, allowing it to experiment, fail and switch direction without delay, reacting to new 5G service demands and surges in activity.
The models mentioned above may be comprised of complex interactions with partners and new experiences for customers, so agility and flexibility are vital. This puts new demands on business support systems to simplify and manage new complexities — in customer experience, service creation, charging and settlement and partner management.
The service design process starts with defining business scenarios and building engagement models with relevant partners. This should clarify the provider’s role, business models and profit opportunities in the service ecosystem. Co-creation of new services in a partner ecosystem, including opportunities such as network slicing, calls for flexibility, agility and integration across the network.
The evolution of 5G networks to standalone 5G provides new service options for turning investment into revenue. Standalone 5G can enable new uses and business models beyond mobile broadband; network slicing can make sure these new services work together, tailored for each application.
Network slicing is a critical component in delivering differentiated connectivity — the new uses and services that 5G can potentially support have varying and specific connectivity performance needs. But sliced connectivity services also require providers to rethink how they create services and the role they take in the value chain, a mind-set entailing new skill sets and ways of collaborating.
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