How 5G Network Slicing Can Increase Monetization
How can telecommunications companies find ways to monetize new wireless technologies and gain the types of profits that have been enjoyed in recent years by service providers? Sean Gardner, Head of Video Strategy & Market Development at AMD, and Harjinder Sandhu, Director of Business Development, Evertz discuss the ways that 5G network slicing has the potential to offer multiple networks which can create unique monetized tiers of service.
Gardner cites a recent report by the European Telecommunications Network Operators’ Association which noted that despite the industry spending 500 billion euros over the past decade, it has seen very little profit. “It's all going to the likes of Netflix and Google and all of the IT companies who are driving the services,” Gardner says. “Their average revenue per user is flat and their costs are going up. So, they're asking, how do we monetize all this money that we spent?”
Network slicing has the potential to be a very profitable solution. Gardner says that with network slicing there is the powerful ability to take a portion of your spectrum and isolate it to essentially give a customer a guaranteed quality of service. This enables live contribution at low latency and the ability to make edge computing centers. He highlights the use case of ShotTracker – a sports statistics and analytics company that is tied to Verizon and AWS – as a great example of a service that well utilizes 5G network edge computing. “You look at what's going on there, and now you can see how interactivity and all this comes together,” Gardner says. “And network slicing becomes a big chunk of that mechanism to enable a lot of these use cases.”
Sandhu notes that in the days of physical networks and wired connectivity, there were public internet connections and telco lines that offered users dedicated connections at upwards of 500 times the cost, with no packet recovery required. He believes that 5G will offer all these advantages in a more streamlined and affordable fashion. “It’s going to offer a very low cost, extremely mobile space with connectivity over public internet 5G,” he says. “This is a carved-out piece where they're going to make 70% of their revenue by providing this wireless but still dedicated connectivity that is going to offer lower latency with no congestion, so you potentially don't need any ARQ mechanisms.”
Ultimately, Sandhu says, these new applications for 5G network slicing will bring telecommunications companies higher profits. But he also emphasizes that the industry should begin shifting their marketing focus away from simply touting the widespread availability of 5G and towards marketing different tiers of 5G service, divided into regular versus premium. “Like AWS Direct Connect,” he says. “That’s part of the public internet, but carved out, so that you can have dedicated bandwidths going into the cloud.”
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