Ever reluctant to bandy war metaphors about, what at once looked to be a mere silver bullet for mobile operators is today looking more like a silver smart bomb capable of meeting multiple, unique challenges in a single shot.
Welcome all of you to 2019, and this, our first post of what promises to be a banner year for telecom. As always, our focus is squarely on the prize of Network Slicing; that general purpose technology that will put the next generation of telecom in direct alignment with the demands and promise of the 4th Industrial revolution.
In this short, opening salvo, we wanted to re-state the case as succinctly as possible, and take the opportunity to invite you all to our first Webinar of the year, Making Money with Network Slicing, a co-production of Cloudstreet and Light Reading, Hosted by Heavy Ready Lead Analyst Rosalyn Roseboro.
Network Slicing: Telecom’s Silver Smart Bomb
Network Slicing has been forecast to deliver over 30% growth on mobile operator top line revenues by 2026. For an industry that has suffered a decade of but 1% growth, this represents a major opportunity for the industry. But even more compellingly, this growth will not come from the core business, nor be dependent on subscriber growth (that will remain flat in most mature markets). Rather, it will be drawn from add-on opportunities that are only now beginning to take shape. Further buoying this uplift will be a steady, continued growth in the demand for Internet capacity. While this may sound too good to be true, we can say this: not only do good things come to those who wait, but also those who innovate.
To understand Network Slicing, it is critical to see it not as a singularity; one prevailing use case, but rather several points on a long tail of use cases. And so, as its revenue and growth potential is high, this will be distributed over hundreds, even thousands of use cases in multiple industries. Cloudstreet is a forerunner in providing solutions based on Network Slicing. We’ve built Local Control solution for public safety and Advanced Fixed Wireless Access solutions. These deployments solve tangible problems and have clear value propositions that customers are willing to pay for. That said, there are some considerable challenges. Both are fairly difficult to implement and the additional revenues from them only provide a couple of percentages on the top line. Thus, it can be fairly difficult to defend these business cases.
Now imagine the prospect of having to go through the same hassle and retooling for every use case. If this were the path, one could hardly blame the operator for taking, low, predictable road, however flat. Luckily, and most importantly for the bright future of telecom, this is very much not a case.
Hans on the Wheel: The 8 Currencies of 5G
At opening gun of 2019, the tech mecca of CES, Verizon CEO Hans Vestberg laid out a clear vision for 5G with the help of conceptual model featuring 8 currencies upon which mobile carrier operate. One may argue the true number, but not the argument itself, nor certainly the very apropos use of the term “currency”.
Hans Vestberg’s 8 Currencies of 5G Include:
Peak Data Rate
Mobile Data Volume
We see this modalities of connectivity, (and perhaps a few more) in the recipe of any slice. But most importantly, and to the challenges outlined above, the wonder of Network Slicing, and soon 5G, will be the ability of carriers to near instantly move themselves up the value chain, and integrate directly to the nee4ds of the vertical and businesses they serve. Rather than building the long tail themselves, cutting each slice or subslice from whole cloth, operators like Verizon will be able to simply open up an API that allows customers to build their own solutions. This will not only make the operator’s life easier, but also make it possible to develop tens or hundreds of use cases simultaneously. In this way, and to quote the title of an earlier Cloudstreet Whitepaper, this means that top line growth won’t be driven by operator capabilities by User Defined demand.
We will talk about this in up coming webinar, Making Money with Network (drawn out in full in our companion whitepaper sharing the title. We also look forward to the opportunity to continue the dialogue with with in Barcelona at MWC19, that promises to be an eye opener.