Network slicing refers to essentially individual, virtual networks built on top of a shared infrastructure and designed to serve a defined business purpose.

Guest author

September 6, 2021

5 Min Read
concept of future technology 5G network wireless systems and internet of things periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Arvinder Anand, VP Architecture, Technology & E2E Solutioning, North America Digital Services at Ericsson, examines the central role network slicing will play in the success of 5G.

Technological advances across industries are increasing the demand for high-performance, flexible communications services. Network slicing is emerging as a way to address the service gap between public networks that cannot meet these demands and specialized private networks, which requires a higher investment and more equipment on premises.

It’s also an area that offers tremendous growth opportunity. A new study from Ericsson and Arthur D. Little, analyzing more than 400 5G use cases, found that for communication service providers (CSPs) the addressable network slicing revenue alone is $200 billion. In 2025, that number is estimated to be $45 billion, implying that network slicing’s potential is massive. In fact, it will be a critical technology for addressing the full potential of 5G moving forward. The study estimates that 25-30% of potential 5G use cases will need slicing as an enabler.

Three waves of deployment – and opportunity

Network slicing refers to essentially individual, virtual networks built on top of a shared infrastructure and designed to serve a defined business purpose. It provides the benefits of both public and private standalone networks: Like a public network, it’s easy to install and set up. Like a private network, it enables traffic isolation, a high degree of customization, and comparable performance and security. But network slicing is more flexible than either, and can be rapidly deployed, configured, and modified — all while providing wide-area coverage.

Network slicing can be guided by the CSP’s business strategy, current market reality, and customer base as it provides an enormous amount of flexibility and potential for customization, and is still in the early stages of maturity as a technology. CSPs can expect to see three distinct waves roll out over the next several years, each one an opportunity to build capabilities and expertise. The initial phase will focus on basic slicing functionalities, slices will be fairly static and most use cases will include shared and isolated traffic. The second wave will bring end-to-end slicing automation and scale as slices become more dynamic.

Eventually, advanced business models will be built upon slicing capabilities, things like channel and partner management, sales databases and digital marketplaces. A high degree of resource allocation and isolation in mature slicing technology will enable niche segments with smaller customers that have specific needs.

Complex landscape will require deeper understanding from CSPs

As 5G and slicing become widespread, and service providers are sharing network resources, the complexity of the landscape will increase.

They will also require CSPs to change the depth at which they engage with specific verticals. With one public network for all, CSPs could provide services without having to be deeply ingrained into the nuances of specific businesses, like manufacturing, energy or public safety. But with slicing, these resources will be customized for specific use cases, meaning CSPs will need to forge strong partnerships and take part in developing ecosystems to support slicing. The upside is that this will also allow them to capture a larger part of the value chain.

Future-proof networks for future 5G use cases

Growth in the Internet of Things (IoT), enhanced mobile broadband and critical machine-type communications are opening up use cases and potential growth for network slicing applications. The current level of public network resources cannot match the increasing diversity of demands over time.

Examples of uses cases that will benefit include mobile cloud gaming, mission critical push-to-talk, remote broadcast, software over-the-air updates for things like connected cars, and predictive maintenance of utilities like railroads and powerlines. And CSPs can start to address that $200 billion in slicing-specific revenue by bringing in new customers, capturing a larger part of the value chain, and enabling premium pricing and new business models through tailored services.

Importantly, development of network slicing will be critical for future-proofing networks. Deploying new physical networks for new use cases, or reconfiguring existing ones, would be prohibitively expensive and it limits flexibility for new services — essentially, it’s kicking the can five years down the road while simultaneously holding back innovation with an inflexible network.

The future of network slicing

New 5G use cases have higher requirements on network performance, and it’s becoming more and more apparent that a one-size-fits-all approach to wireless connectivity is not sustainable.

Network slicing will be more and more critical to meet the increasingly complex requirements of developing and future use cases. As 5G brings new technologies and creates new business opportunities across all industries, enterprises are looking for innovative solutions to meet their needs. This will also be an important opportunity for CSPs to expand beyond their traditional roles in network connectivity, management and operations domains and capture more of the value chain. In fact, there is a good opportunity to capture 43% more value, according to the study, by addressing the whole value chain and taking on a broader role as service creator.

With network slicing, communication service providers can meet the needs from new, complex use cases, reinforce their networks and future-proof systems to be ready for what comes next.


Arvinder-Anand_Ericsson_Headshot-150x150.jpgArvinder is VP, Head of Ericsson Arch, E2E Sol & Device Verification and Digital Services at Ericsson. Arvinder’s division provides customers with end-to-end solutions on the transformation and adoption of 5G.

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