Network Slicing Might Shift Value of Networks

Network slicing might ultimately be more important driver of business strategy than many expect, with both potential revenue upside and downside for connectivity providers. The upside is the potential ability to create customized wide area networks with features preserved to the radio edge of the network. In principle, that turns a commodity connection into a value-added platform.

The downside is that network slicing also might be used by enterprises and carriers to further commoditize the value of physical networks. `

Consider this diagram from ETSI, explaining the architecture of network slicing, as used by potential customers of network services. The “tenant” is the customer. The network slice provider is an aggregator of network services.

The network slice agents are the sales agents for any network’s slices. The network infrastructure providers are what we now call telcos or service providers.

source: ETSI

It does not take much imagination to predict that some tenants (network service providers, enterprises, app providers, transaction platforms, device providers) can stitch together regional or global networks with assured performance (latency, bandwidth) by buying network slices from many network service providers.

The early analogy is the way Google Fi uses Wi-Fi, Sprint, T-Mobile US and U.S. Cellular networks for access. Where Wi-Fi is available, Google Fi devices default to Wi-Fi. Where not available, devices sense whether Sprint, T-Mobile US or U.S. Cellular have better signal, and default automatically to that network.

In a network slicing environment, a tenant will essentially do the same thing, using network slices to to create a complete network, possibly with performance assurance. Potentially, tenants might also dynamically shift slices, based on any number of potential business rules (cost, quality, bandwidth, congestion).

The bottom line is that the way tenants (enterprises or carriers) build networks could change, in ways that shift value to the integrator of slices, whether that integrator is the enterprise itself or an agent working on behalf of the tenant.