5G network slicing value hits $19bn but growth stalls

A study from ABI Research is warning that rapidly increasing interest in 5G network slicing will not be matched by rapidly increasing market growth, slowing expectations in the market compared with previous forecasts.

Indeed, ABI’s 5G network slicing and cloud packet core market data report found that growing ecosystem complexity and ongoing challenges with cloud-native tooling adoption have placed increased pressure on new service innovation, meaning the market will continue an upward, albeit slowed, growth trajectory. That said, ABI expects the 5G network slicing market to be worth US$19.5bn in value by 2028.

Considering existing market activities, ABI noted that a growing force behind 5G slicing uptake is enhanced mobile broadband (eMBB) and fixed wireless access (FWA).

With growth in these sectors, the report revealed there was growing market activity and commercial engagements from network equipment suppliers Ericsson, Huawei, Nokia and ZTE, among other suppliers. ABI regards these market engagements as representing a good foundation for the industry to match 5G slicing technology to high-value use cases, such as enhanced machine-type communication and ultra-reliable low-latency communications.

“5G Slicing continues to promise new value creation in the industry,” said ABI Research senior analyst Don Alusha. “However, as reflected in multiple ABI Research market intelligence reports, a solid software and cloud-native foundation must be in place for that promise to materialise. That, in turn, is a prerequisite for a wider diffusion of 5G core adoption, an architecture that provides native support for 5G slicing.”

Looking at how it believes the market will evolve from an architecture perspective, ABI said two modalities are emerging to deploy 5G slicing. The first one is to share the whole infrastructure spanning radio access network (RAN), core, physical devices and physical servers. This, said the analyst, constitutes a unified resource pool, the basis of which can be used to instantiate multiple logical connectivity transmissions.

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A second approach is to provide hardware-based logical slices by slicing the physical equipment. The analyst cautions that this is a time-consuming, resource-intensive endeavour, but said it may be the best option for mission-critical services. It requires slicing the physical transmission network and oftentimes a dedicated user plane.

ABI emphasised that the prevailing approach would be a function of specific country regulations, rules and policies on information and data privacy, as well as technology integration for cross-domain offering interoperability and business model innovation.

End-to-end (E2E) 5G slicing involves different professional categories of the cellular domain, including the bearer network and the core network (CN), as well as the transport network (TN). It will also likely involve different vertical industry applications, so it needs the maturity of the entire ecosystem. In the early stages, the industry can deploy sub-slices of the CN and then gradually expand to E2E 5G slicing.

“Horizontal integration for cross-domain interoperability is critical going forward,” said Alusha. “Equally important is vertical integration for 5G slicing lifecycle management of multi-vendor deployments. There is ongoing market activity for the 5G core network penetration and maturity of 5G slice management functions.

“To that end, enterprises will seek to create and reserve slices statically and on-demand,” he said. “They also want to efficiently integrate with cloud providers through open and programmable application programming interfaces to enable hybrid cloud/cellular slice adoption. NEVs and other suppliers (such as Amdocs and Netcracker) offer solutions enabling CSPs to create fully automated and programmatic slicing capability over access, transport and core network domains.”

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