How Big a Revenue Stream is Network Slicing?

Rarely in the networking or computing businesses is there but one solution for any given problem. And that almost certainly applies to 5G network slicing as well. There are many other alternatives offering functionality that is comparable or better, with costs that might also be lower.

The issue is whether there are use cases where a 5G slice is the best-performing or only solution for a particular application and use case.

One of the unknowns about 5G network slicing is the number of slices that can be created at any single base station. The number might be far more restrictive than some might suspect.

Depending on the amount of bandwidth used by each virtual private network, as few as 10 or as many as 100 network slices might be supported at any single base station.

The 3GPP (3rd Generation Partnership Project) standard does not formally limit the  number of slices that can be supported at any base station. However, capacity is limited in practice by the hardware and software resources available, and the need to respect a few requirements including::

• Each slice must be isolated from other slices to prevent interference.

• Each slice must have its own dedicated resources, such as bandwidth and processing power.

• Each slice must be able to be scaled up or down independently of other slices.

In addition,  the number of slices that can be supported is affected by

• Some slices, such as those used for mission-critical applications, may require more resources than other slices.

• The more isolated the slices are, the more resources may be required.

• The heavier the traffic load on a slice, the more resources it may require.

For such reasons, it is possible–and perhaps likely–that many enterprise customers would choose some other method of assuring features touted for 5G network slicing.

Just how much revenue mobile and other service providers could earn supplying network slicing is somewhat hard to forecast at the moment, since most enterprises still do not have the option to buy it. But most forecasts seem reasonable, putting network slicing revenue somewhere between three percent and 5.5 percent of total mobile service provider revenue by 2026 to 2030 or so.

At least in principle, those sums should not include infrastructure revenues earned by the likes of Nokia, Ericsson and others selling gear to enterprises to run their own private networks, or revenues earned by system integrators operating such networks on behalf of enterprises.