Why network slicing is the 5G differentiator telcos have been craving

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, John Lenns, VP Product Management at Oracle Communications, explores why network slicing could be the differentiator UK telcos are searching for in the 5G arms race.

When it comes to 5G, most UK telcos are still aggressively jostling for pole position. But, with EE the first out of the starting blocks at the end of May – closely followed by Vodafone rolling out its network to seven UK cities a few days later – the marker has well and truly been laid down.

Around five million Brits switch mobile provider each year, so establishing themselves as an efficient and reliable provider of 5G will be critical for telcos looking to both retain existing and attract new customers over the coming years.

Cutting through the noise with network slicing

One way providers can steal a march on competitors is through the emergence of network slicing, a technology that allows telcos to offer differentiated services with tailored connectivity and potentially specific applications for a specific enterprise segment. Service providers need to play more of a central role in smart ecosystems and digital marketplaces to grow revenues and profitability and compete with digital innovators. To that end they should also consider non-traditional business models such as new SaaS and managed service models to reduce costs and share risks/rewards. Network slicing is a key enabler towards this goal.

With 5G unlocking the potential to launch services and products previously unimaginable on 4G, performance and functionality requirements are bound to differ enormously. Network slicing essentially subverts the one-size-fits all approach, providing the opportunity for carriers to tailor connectivity services to the precise requirements of particular applications, users, or devices.

The concept of a dedicated core network is not new, first introduced in 4G as a DECOR feature. 5G, however, bakes network slicing into its core service and extends it to be end to end.

For telcos, the opportunities are limitless. Want to stream virtual reality at a sports event, or 3D video at a music concert? Before 5G, these experiences were tantalisingly out of reach, limited to stadiums and arenas with only the strongest WiFi connection. But network slicing will make them a mainstay of how people experience brands and events.

This freedom to launch and evolve custom-fit network slices rapidly – with lower capital and operating costs – will provide huge opportunities for telcos as they create increasingly sophisticated and lucrative digital services.

Telcos in pole position to take advantage

While we’re still scratching the surface of what 5G can deliver, it’s safe to say that telcos occupy one of the strongest market positions when it comes to exploiting this new network’s vast potential. Nearly every vertical imaginable relies on communications services to not only operate on a daily basis, but also accelerate innovation.

One such example is in the highly-competitive live-game streaming world, where pioneering platform Twitch boasts 3.3 million unique broadcasters per month and a staggering 560 billion minutes watched in 2018. There’s real potential here for providers to adopt greater integration into an ecosystem, with specific slices and integration into customer experience (CX) and applications meaning a specialised version of a game streaming platform could be offered under a telco’s very own brand.

In this scenario, telcos would provide much of the experience, including the basic portals for users and game providers, as well as own-branded monetisation for the latter. The service would operate from multiple cloud environments, with third parties supplying various aspects of the streaming platform, back office, CX, slicing, and edge. The mobile network operator would provide the access and other technologies.

This is just one of the many exciting opportunities for telcos to personalise network ‘slices’ to match the specific requirements of industry-vertical applications with customer segments. All service environments worth their salt will, at the very least, provide the basic ‘5G building blocks’ to help service providers move forward with both traditional mobile and enterprise services.

But the ultimate goal for telcos should be to add value to core services with good margins and operational efficiencies—something that will come with more automation in Cloud native technology and business practices, and with a willingness to explore outside comfort zones to tap into and capitalise on the expertise of people outside the industry. In other words, telcos must focus on creating exceptional experiences for their customers. 5G – along with network slicing – has the potential to make this a reality.

John LennsJohn Lenns, VP Product Management, Oracle Communications As VP of Product Management at Oracle Communications, John is responsible for leading product management, product marketing, business development and strategy teams that help telecoms companies develop and manage all aspects of their 4G and 5G networks, business operations and customer relationships. John joined Oracle Communications as part of the acquisition of Tekelec in 2013, having spent 15 years leading product, technical and business development teams for the company. Today, John is focused on helping telecoms companies make the most of the cloud to deliver 5G networks successfully and securely.

Diameter signalling traffic will grow at over 20% per year for a while – Oracle

Oracle Communications has published its latest LTE Diameter Signalling Index and it expects global LTE traffic to grow by at least 20% every year until 2021.

This year Oracle expectDiameter signalling traffic to hit 289 million messages per second globally and by 2021 this should have doubled to 595 million. This is mainly down to smartphone use these days but is expected to be increasingly derived from IoT uses such as connected cars.

Oracle diameter siangalling table

“With consumer expectations at an all-time high, it’s more critical than ever that CSPs innovate and plan for continued diameter signalling growth in order to stay relevant,” said Doug Suriano, SVP and GM of Oracle Communications. “The cloud continues to offer one of the clearest avenues for CSPs to accelerate and achieve these goals.”

Here’s what the report has to say about the regional breakdown.

Latin America and the Caribbean continues to show accelerated growth in Diameter networks. The region will generate 52 million MPS by 2021, a CAGR of 34 percent. Brazil is the largest contributor of Diameter signaling, followed by Mexico.

The Middle East will reach 27.9 million MPS of Diameter signaling by 2021, a CAGR of 23 percent. Turkey and Iran are the largest generators in the region.

Africa continues to show strong growth in Diameter signaling. The region will generate 20 million MPS by 2021, a CAGR of 63 percent. Egypt is the top generator, followed by Nigeria and South Africa.

Central and Southern Asia will account for 10 percent of the world’s Diameter signaling, reaching 62.4 million MPS, a CAGR of 38 percent, by 2021. Policy management is the largest generator of Diameter signaling in the region, generating 10.4 percent of the world’s policy-related Diameter signaling. Pakistan, followed by India, is the largest generators.

Oceania, Eastern and South-Eastern Asia generates nearly half of the world’s Diameter signaling (45 percent). By 2021, the region will generate 265 million MPS of Diameter signaling, a CAGR of 18 percent. The region is also responsible for 44 percent of the world’s policy Diameter signaling, generating 131 million MPS by 2021. China alone will generate 83.5 million MPS of policy generated Diameter signaling by 2021. Indonesia is also showing strong growth.

North America leads the world in LTE penetration as service providers move aggressively to sunset 2G and 3G services in favor of 4G/5G. The region will show moderate growth in the coming year, generating 59.3 million MPS by 2021, a CAGR of 12 percent.

Eastern and Western Europe. Eastern Europe will generate 48 million MPS of Diameter signaling, a CAGR of 46 percent by 2021. Russia, followed by Poland, are the strongest generators in the region. In comparison, Western Europe will generate 61 million MPS, a CAGR of 23 percent. The United Kingdom generates the most Diameter signaling in the region today, but Germany will surpass the UK generating 6.4 million MPS of Diameter signaling by 2021.