Where are dedicated radios the best choice for a private network? And where will network slicing be a better choice? This is not an easy question to answer….but it’s an important question, as the market for both approaches is growing.
According to the latest Mobile Experts forecast, network slicing revenue will grow more than 60% each year through 2030, as mobile operators learn to use the technology and guarantee service level agreements (SLAs). In theory, this sounds pretty simple, as the network reserves resources to guarantee minimum throughput or maximum latency requirements.
But it’s not so simple. The real world involves a complex radio environment, where changing conditions can affect the radio link. And yes, you can build digital twins to simulate the world at high resolution, but a truck driving by can cause signal fading, so digital twins can only take you so far.
What is the network slicing reality?
The reality is that network slicing is growing fast, but its rapid-growth phase has been delayed by a few years because of this kind of real-world practical consideration.
Operators have been trying to figure out how to offer a guaranteed SLA, when the radio environment remains a highly variable roadblock. One answer is to set a geofence around the user: you can have 50 Mbps guaranteed uplink, but only if you stay within 50 feet of your current location. Another dimension is to offer the network slice only to a specific class of devices: automotive modems can get 10 Mbps guaranteed latency on the road, because the roadways are well mapped and covered by multiple frequency bands. Still, the operator needs to clarify that the guarantee doesn’t apply in the basement of the parking garage.
Of course, the ultimate answer is for the operator to deploy dedicated radios in the building. This may be the genesis of a new era in the small cell market with operators deploying small cells to be able to guarantee bulletproof local coverage inside a building. In some cases, this could still be sold as a service on a network slice. In other cases, it will be sold as a private cellular network.
CSP network slicing service revenue
The competition is already starting and it will heat up as this market grows. Mobile Experts has wrung the truth out of 13 different vertical markets, as we studied industrial private cellular and business in carpeted enterprises. (See chart.)
Operators can address some of these verticals (transportation, utilities), where wide-area networks are needed and the devices are in well-understood locations. Operators won’t be as good in vertical markets like healthcare, where doctors and nurses need their apps to work, even in the elevator or the stairwell where coverage is poor.
What are the issues with 5G network slicing vs. private cellular?
There are plenty of other issues for operators to consider. Many enterprises need their data to stay on-premises. Other enterprises have local edge computing to tie in. We’re watching new service providers emerge with neutral host services and we expect significant growth in selected vertical markets where public access is key.
In short, private cellular is a smallish market starting tremendous growth. It’s complex, both in the technical area and in the business model. It’s easy for any venture in this area to be blindsided.
My team has drilled down to the bedrock on this and we’ve mapped dedicated private cellular vs. network slicing in 13 different vertical markets, plus a few consumer scenarios. Bottom line: Both approaches will grow pretty fast but with different customers.
It’s incorrect to say that the network slicing market is simply waiting for operators to invest in standalone networks. Yes, that’s an important element. But the complexities of coverage mapping and guaranteed SLAs are weighing on the concept as well. We’re starting to see the solutions come together and we expect big things in network slicing.
Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets.
Op-eds from industry experts, analysts or our editorial staff are opinion pieces that do not represent the opinions of Fierce Network.