How to Monetize 5G with Network Slicing?

Telenity
Published

Network Slicing Technique in 5G Telecommunication Systems

The arrival of the 5G telecommunication system as a commercial network is the talk of the town. The mobile operators and consumers of the telecommunication networks are equally excited about the prospect. The most unique and distinctive feature of the 5G architecture that separates it from all the previous network architecture is the 5G network slicing. Please continue reading to know what network slicing is, to learn about its benefits, and how to monetize it. 

How Does Network Slicing Work? 

To put it simply, network slicing is the process of cutting bandwidth based on the user's requirements. Each user will receive an exclusive set of customized resources and the relative network topology based on their use case. For example, think of two users: user A and user B. The network use case for user A is texting, and the use case for user B is 4K game streaming. Due to their different preferences, both users do not require the same amount of network bandwidth. User A will only require a tiny portion of what user B requires to execute his function without any glitches. Thus, with network slicing, the bandwidth of both users A and B is sliced to match their use cases. 

What is 5G Network Slicing? 

Network slicing, up until now, was not practical because the past networks used dedicated network cores to enable connectivity. However, the network core is made of network virtualization technology in the case of 5G telecommunications systems. These virtualizations are called Network Functions Virtualization (NFV) and Software-defined Networking (SDN). These two methods of software-based automation enable network operators to partition the network into virtual elements. 

How to Monetize 5G with Network Slicing? 

Network slicing offers new revenue opportunities for mobile operators. As the users are given optimized networks, there are several opportunities for the price markup due to increased bandwidth deployment. The users will be ready to pay for the enhanced competency regarding performance and security. This way of monetization is a game-changer for telco operators. They can establish the foundation by bringing the business enablement stack and network layers closer. On the other hand, the following 5G monetization models can be applied. 

5G Monetization Models 

Model 1: As Connectivity Provider 

The typical 4G pricing is extrapolated through the additional innovations and elements. In this model, the layered connectivity is offered to the B2B and B2C customers as per their selected package. 

Model 2: As Solution Enabler 

A third-party buys a slice of the operator's network and provides the network as a part of its offering. In this monetization model, the telecom company receives a network charge or the revenue share from the third-party who originally got their customers' money. 

Model 3: Solution Creator 

The 5G connectivity is bundled up with the third-party product and/or services. Then, the bundled solution is directly sold to the customers. Through this model, telecom companies can create vertically integrated third-party solutions. 

Business Model of Network Slicing 

Network slicing enables mobile operators to customize various parameters of the network delivery. In this business model, the operator can provide a selected package that specifies a definite rate of bandwidth and latency without affecting the network's overall performance. Thus, network slicing is qualified to be monetized by operators as "Network Slice as a Service," which is then suitable to be bundled into offers for customers and third-parties. 

Regardless of 5G network’s efficiency, its true potential can not be realized without sizzling the network. With network slicing, the operator can partition the network into discrete virtual elements to fit the users' requirements. Thus, they are quintessential in creating incremental progress towards a completely automated on-demand network. 

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