How Big a Revenue Opportunity for Network Slicing?

As you might expect, telecom infrastructure firms are big believers in the potential for new services such as network slicing. Ericsson, citing Arthur D. Little estimates, has said service provider network slicing revenue upside of as much as $200 billion by 2030. 

Others suspect connectivity revenue will be quite a bit smaller, as little as less than $1 billion in annual revenues by about 2026. The other issue is that the “market” includes both sales of infrastructure to create the service provider capability, and the value of services sold by connectivity providers to customers. 

The infrastructure portion of the market is far larger than the connectivity services segment. Also, we may quibble about what constitutes “network slicing” investments, since that capability is a feature of the 5G core network. 

We might reasonably discount such figures, as those figures represent “potential” opportunities. The only issue is how large a discount is warranted.

Some of us might discount as much as 90 percent of the forecasted revenues, as it is likely mobile service providers will not, in the end, be able to become leading suppliers of most of the ecosystem value or revenue. That suggests a figure more like $20 billion by 2030. 

source: Ericsson 

Healthcare represents 21 percent of service provider addressable revenues; government 17 percent, transportation 15 percent; energy and utilities 14 percent; manufacturing 12 percent and media and entertainment 11 percent. 

Ericsson sees a $23 billion opportunity for connectivity providers, if service providers act as network developers or service creators. As a service creator the CSP would engage in activities like reselling devices, application platform provisioning, data monetization or offering support. 

The network developer role includes the supply of connectivity services and bandwidth.  

source: Ericsson

 

Healthcare represents a $6 billion opportunity for service providers in 2025 and could grow to $23 billion in 2030. 

In the energy segment, typical customers include small and medium-sized energy companies and power plants. By 2030, slicing-enabled revenue is expected to approach $46 billion and the addressable revenue for service providers will approach $20 billion.