Ericsson and BT highlight network slicing’s economic benefits for MNOs
Written by: Sam Fenwick | Published:

A study performed by Ericsson and BT claims that mobile networks using 5G’s network slicing capabilities are likely to generate more revenue and lower operating costs compared to traditional multi-service networks or the use of multiple networks with dedicated resources.

It claims that network slicing is the fastest, most cost-effective way to achieve service scalability and that investments in network automation payback rapidly.

According to the study’s calculations, network slicing resulted in the equivalent of a 40 per cent reduction in OPEX, a 35 per cent increase in revenue potential and a 150 per cent increase in economic benefit, under its baseline assumptions. The benefits were only assessed from a core network perspective.

Network slicing allows operators to segment the network to support particular services and deploy multiple logical networks for different service types over one common infrastructure.

Marielle Lindgren, head of Ericsson United Kingdom, said: “We found that over a five-year period, introducing new services by using network slicing and operational automation generated 35 per cent more revenue than by using one multi-service network. The revenue increased 15 per cent when compared to several networks with dedicated resources, demonstrating how the technology enables market stimulation, faster time to market, and opportunities from smaller niche services.

Maria Cuevas, head of mobile core networks research at BT, said: “We’re positioned to bring millions of devices onto our networks as the IoT ecosystem grows. This study gives us guidance as to where our investments will achieve the best results. The more services we deploy with network slicing, the greater economic benefit we will see, enabling us to better serve our customers. To achieve this vision, it is important that the industry provides cost-effective solutions to support end-to-end orchestration and adds automation to the operations and management of network slices.”

Lindgren continues: “As applications and use cases for evolving technology become more complex, so will the characteristics of connecting them. Simply put, networks will need to adapt. The findings clearly show that network slicing provides a logical setup that can be tailored to extend into the as-yet undefined services of the future.”

The study can be read here

Study methodology
The study examined capex, impacted opex and revenue consequences of new service introductions across three scenarios. The common baseline for each scenario was a virtualised core network. The study also assumed that a mobile broadband service has 25 million subscribers on the network. It ramped up to 40 unique service type launches per year, each requiring different network design and validation efforts.

This included a steady mix of 60 per cent Critical Machine Type Communication (C-MTC ) and 40 per cent Massive Machine Type Communication ((M-MTC) services. There was also a rough assumption of an automation investment included over three years for network slicing.

According to the study, “C-MTC services, such as remote surgery or cloud controlled robots in a factory, are typically characterised by ultra-low latency, high reliability and high throughput, but are relatively small scale. M-MTC services, such as smart city sensor grids or vehicle tracking fleets, are large scale but have low throughput. These services open new business opportunities for operators and industries, but come with complex and diverse performance challenges.”

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