Why agility will be at the heart of 5G monetization
January 22, 2020 - Openet
As the 5G digital services race begins, we now find communication service providers (CSPs) at various stages of planning, designing or deploying new infrastructure. The range of potential 5G use cases are huge. Everything from gaming to smart factories to VR-based entertainment. Unlike in the 4G era, the operators have one asset that can help establish their place at the center of the 5G value chain. That asset is the 5G network itself, or more specifically the opportunity to manage network performance down to individual application level using network slicing.
Network slicing has emerged as a leading technology that will unlock the true value of 5G for enterprises and industries. It is expected to change the economics of the connectivity business by enabling new providers to enter the market—for example web-scale players—and allowing vendors to offer competitive ‘networks-as-a-platform’ services.
But this new technology, cannot be truly be successful if it is run on legacy monetization tools still used by many CSPs. These outdated systems are likely incapable of supporting the complex use cases network slicing will enable. In fact, CSPs will likely have to adopt a ‘trial and error’ approach when it comes to launching these new use cases and understanding appropriate revenue models. This calls for an extremely agile monetization platform that is both configurable and scalable.
Monetization of the future
Traditionally, CSP monetization systems have been highly customized for specific requirements and use cases. While this has worked for previous wireless generations that have come with their dedicated use cases—3G was all about voice, while 4G was focused on video—this approach will not work in a 5G age. Indeed, future monetization platforms must be agile and configurable to meet the dynamic requirements of 5G and support the lack of clarity regarding its use cases. This will require CSPs to embrace modular and scalable approaches that allow for monetization platforms to be customized in real-time, according to individual use case requirements.
What’s more, CSPs should embrace cloud-based delivery models, doing away with legacy deployment models, requiring high levels of support and integration. By leveraging cloud-based models, CSPs will be able to upgrade solutions seamlessly and quickly, thus futureproofing CSP monetization for the long-term. In addition, CSPs will be able to leverage cloud capabilities to drive automation, for example by enabling automated slice creation and application allocation and eventually application automation whereby slice selection or instantiation can be called up by the application itself.
5G is creating a paradigm shift for CSPs that is prompting them to think differently about monetization. It is driving them to embrace new business models that can support a variety of anticipated—yet undefined—use cases and to cater to new customer profiles—namely the enterprise. But their monetization success will be heavily reliant on their ability to build monetization tools that enable them to cope with the demands of network slicing. So what do those requirement look like when thinking about monetization?
Network slicing prowess
Network slicing will enable a number of exciting use cases. Importantly, it will allow CSPs to monetize their network assets in a way that has never otherwise been possible. By leveraging network slicing, CSPs will be able to set dedicated SLAs for specific applications, and finally put a price on network performance guarantee.
Monetization will therefore need to move away from a ‘one size fits all’ approach. Indeed, CSPs leveraging network slicing may consider three different approaches to monetization. First, cross-slice charging whereby a single, centralized charging engine is used to charge for all services across all slices. Second, in-slice charging, whereby each slice will have its own charging engine, with each responsible for charging for all services occurring within the slice. Third, hybrid slice charging whereby CSPs choose to use a combination of cross-slice and in-slice charging, for example in-slice charging systems may be selected for ultra-low latency use cases, while cross-slice charging can be deployed across all other slices.
When thinking about their approach to monetization, CSPs must take into consideration how new phases of 5G deployment will drive the evolution of network slicing, going from capacity-based slices to service-specific slices, and ultimately, to application-driven slices. This evolution will have a knock-on effect on monetization; we’ll see CSPs go from requiring only near real-time charging to being reliant on fully cloud-based monetization systems.
5G and network slicing will create new, exciting opportunities for CSPs to rethink how they monetize their network, and how they create new revenue streams. But doing so will require fresh thinking and new approaches, it will force them to unshackle themselves from the burden of legacy software and look towards agile ways of working, such as open source and DevOps. It will prompt a change in CSP culture and finally give them the ability to be bold, and brave, and will ultimately dictate their success in a 5G era.
Read the original coverage on RCR Wireless.