Why 5G network slicing means big business for telecom providers

Healthcare, smart cities and VR entertainment are just some of the industries 5G network slicing can transform

By | 7 minute read | March 11, 2021

With network slicing, a world of possibilities—and revenue—awaits.

When the Swiss Army first developed its signature knives in the 1880s, it was to help soldiers do many things at once in one small package: cut and slash, open cans, fix rifles, even uncork wine and clean fingernails.

Today’s telecommunications networks must take on a similarly broad and efficient balancing act—one that’s likewise growing more complex and pivotal with each passing year. More consumers and especially enterprises now depend on wireless hotspots and fiber-optic cables to connect almost every aspect of life and business.

Thanks to the emerging ability of network slicing that cloud-based networks offer, telecom carriers have found their do-anything-anywhere Swiss Army knife.

Crucially, network slicing is also the tool that helps carriers unlock countless new revenue opportunities, particularly in the lucrative enterprise space. It’s these network innovations that will help pay for innovation in the broader network. With the rise of 5G and edge computing combined with AI integration, it’s bound to be the biggest boom since mobile.

“Enterprise is where the immediate opportunity is,” Bill Lambertson, IBM’s vice president for cloud, 5G and edge solution for the Telecommunications, Media and Entertainment sector, told Industrious.

While many technology providers may be promoting edge solutions that could be attractive to industry, Lambertson argues that it’s the telecom operators whose networks and data centers “are the most attractive locations for edge solutions. Essentially, it’s the beachfront property.” Enterprises can’t get any closer to the source of connectivity than with a telecom carrier.

And these communication service providers, or CSPs, will need their business. While the World Economic Forum predicts a USD 13.2 trillion in global economic value from 5G over the next 15 years, carriers are anticipated to pay in excess of USD 1 trillion in building these new networks.

Network slicing, with all the choice it offers, will be a key way to win and retain customers and cover the investments that make these modern networks possible. Just like the unbundling of entertainment over the past decade, carriers can now unbundle their bandwidth, too, allowing customers to choose among different service agreements, including “slices” of different services within those agreements. Built on a single physical infrastructure, each slice is a single, virtual end-to-end network of its own, and operators can reserve a slice for a certain customer or application at a specific level of service.

Network slicing will become a powerful new tool on the factory floor.

A manufacturing customer, for example, might need one feature, like ultra-reliable low-latency services for a fleet of autonomous forklifts in a factory; the connection must be super responsive to protect workers and equipment. But for the factory’s other operations, the customer doesn’t have that particular requirement. As with our Swiss Army knife, that customer can prioritize certain needs, while freeing up the network for its own uses, or for carriers to offer those services to others. The result is more value out of the same bandwidth. Carriers can also charge different prices for each of these slices depending on demand.

At a time when relentless competition has squeezed margins at the same time that data usage by customers has skyrocketed, operators are looking for just this sort of catalyst for generating revenue from new service offerings. Here’s a look at just three areas where network slicing could transform both telecommunications and the industries carriers support.

Healthcare

A surgeon carefully maneuvers his hands to make a tiny incision. Sounds like a typical day in the OR, but actually the patient is hundreds of miles away from where the surgeon is “operating.” The surgeon is looking inside his patient on a high definition video monitor as his hands control robotic arms that perform the actual surgery on site. Another doctor and nurse there are connected to the remote surgeon via video chat and are updating him in real time on the progress of the surgery.

Having the skilled hands of a faraway expert at their fingertips has long been a dream of physicians, and the network capabilities required to stage remote surgery are finally becoming widely available. But with a life often literally on the line, remote surgery requires a low latency, high reliability environment that is also highly secured.

surgeon performin telemedicine with network slicing

5G greatly advances telemedicine and remote surgery.

For Utpal Mangla, a vice president for IBM’s Telecom, Media and Entertainment Center of Competency, remote surgery is “the classic example” of the value of network slicing. In the past, too much bandwidth would have to be dedicated on physical lines to sustain remote surgery.

Now, with 5G, the slices can be shifted and reconfigured to meet the demands of remote surgery only during the limited window in which the procedure is taking place  “Because 5G is a predominantly virtualized and containerized software-driven network, slicing is dynamic and can be done in minutes,” Mangla explains. “And it’s no longer manual but can be handled with the aid of automation.”

Both elective and emergency surgery are a competitive field within healthcare, accounting for tens of billions of dollars in hospital revenue in the United States alone. The ability to tap experts anywhere without forcing patients to board a plane could prove quite lucrative both for medical and network providers.

Smart Cities

The city of the future—aware, responsive, self-regulating—can particularly benefit from network slicing. Take autonomous municipal drones that might respond to an emergency or monitor traffic.

These will require low latency to ensure real-time responsiveness; they need near-instant response times but not necessarily fast data rates. The city’s more traditional cloud-based needs, like providing portals for a range of social services, will rely on fast data rates, however, without necessarily needing low latency.

A drone flies in a city on a 5G connection

City life takes on a whole new meaning in the 5G era.

As an enterprise telecom customer, the smart city, the smart world and smart government, can all benefit from the selectivity and adaptability of network slicing, and the operator can generate revenue for each of these slices. They’re essential in fast-moving municipal environments and emergencies.

“Look at the wildfires in California,” Mangla said. “The firefighting teams could quickly look at the data, and their devices and apps could prioritize their needs on the fly through all the 5G slices available. They could communicate with the operations center, get data and directions immediately back, and then be communicating with the teams, even drones, to helpm fight the fire and prevent its spread.

Smart cities also create new opportunities for further partnerships beyond carriers and municipalities. For example, Telefonica is working with Spanish automaker Seat on 5G-connected car use cases for safer driving in cities, leading to a multi-party public-private partnership.

Augmented entertainment

Imagine what a sports league like the NFL could offer fans if it could take advantage of network slicing to provide VR and AR capabilities. Michael Haynes, who is IBM’s Telco Network Cloud global sales leader for the Telecommunications, Media and Entertainment sector, is already cheering on the possibilities.

“You’re standing on the sideline or field level at the Super Bowl or World Series,” Haynes suggests, “or walking the links at the Masters, or sitting in the front row at a stadium concert, broadcast live through augmented or virtual reality technology.”

A couple uses VR gaming over network slicing

Network slicing can be all kinds of fun—like VR entertainment.

Pulling off such an offering requires coordination and specialization to rival that seen on the field. It’s requires such diverse technical features as varied IP multicast deployment, high-density computing for processing the AR/VR video and specific bandwidth and latency so the whole experience doesn’t lag and make users feel nauseous.

Without network slicing, it’s almost impossible to balance and adjust all these needs in real time. It’s also one of the most promising ways to get added value out of the otherwise low-margin consumer space.

“If you’re a gamer, maybe in some new VR league out in the real world, you might want to be able to have ultra-reliable low latency services as you move—if the game freezes, you’re gone,” Lambertson said. “And that might be a slice you pay a premium for, even a premium above what you would pay for just enhanced mobile broadband.”

He sees opportunities everywhere, especially for those willing to invest.

“As our networking capabilities continue to grow,” Lambertson said, “so will the business opportunities. We just have to keep investing to find them and unlock them.”