In Business Model, Internet Access, Mobile

The business model for 5G network slicing could, in principle, take two different paths. It could be a way for service providers to create customized private networks for their customers. It might also become a wholesale product used by customers to create and control their own services, sort of on the model of enterprises buying computing instances and storage from Amazon Web Service. 

The former path will likely be the preferred model, as it tends to preserve more of the value of the connectivity role. The latter role will appeal to potential competitors who want to use network slicing the way they have purchased wholesale services to create mobile virtual network operator businesses, with the added ability, using network slicing, to customize experience. 

According to 3GPP  [TR23.501], “a network slice is defined as an end to end logical communication network, within a Public Land Mobile Network (PLMN) and includes the Core Network (CN) Control Plane, User Plane Network Functions and 5G Access Network (AN).”

The 3GPP sees a network slice as controlled by the network services provider, and used to create customized and virtualized services for customers. 

Others, including the IETF, see a broader application where end-to-end network slicing can be used by mobile networks and others.

The former view is a standard view of how telecom networks create services and features sold to customers. The latter view might be more akin to the way enterprises buy capabilities from Amazon Web Services. The former is more closed; the latter is more open. 

source: Ericsson

At a practical level, implementing the former means retail tariffs are created. The latter view implies that wholesale access is possible. 

Service providers will tend to resist the latter, as it further extends the “dumb pipe” business model, allowing wholesale customers to use connectivity features to create their own services, as do AWS cloud customers. In principle, they would rather create vertical market solutions with higher value on behalf of enterprise customers, or at the very least be the creators of customized connectivity solutions for those customers. 

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