Niall Norton, CEO, explores how network embedded services can place service providers centre stage in the 5G value chain

In 2021 we’ll start to see an acceleration of the number of “stand-alone” 5G networks rolled out. This means the 5G radio networks that have been switched on will have the sophisticated back-end software elements plugged in. This will enable the true breadth and value of 5G services to come on line. This is a huge, pivotal moment for global telecom service providers, because the revenue potential from enterprise-grade standalone 5G services far exceeds those of non-standalone (just faster 4G really). Furthermore, unlike so-called OTT services in the past, telecom service providers can provide network embedded services into standalone 5G offers. This is crucial as it means they can’t be disintermediated and relegated to only providing connectivity. It places the service providers centre stage in 5G.

Embedded value

So, what are these embedded network services? Well, at their core, they are services that rely on the technological capabilities within the data and control plane layers of the 5G network. These enable telecoms service providers to offer guaranteed quality of service, strong levels of reliable bandwidth, low latency and optimal levels of security.  As there are potentially billions of devices that can be enabled in the hyper connected world of 2021 and onward, they also require the much higher capacity of the 5G network too. In a true standalone network environment, 5G can achieve download speeds of between 10 Gbit/s and 50 Gbit/s and provide millisecond latency. These powerful capabilities have countless possibilities when it comes to monetisable use cases for telecom service providers. These range from mobile cloud gaming, to remote surgery in hospitals, to autonomous cars, to supporting fully automated robotic production lines in smart manufacturing environments. 

Some of these use cases are mission critical like sensitive manufacturing processes and connected cars. There are others, like remote surgery in hospitals, where guaranteed low latency might be literally a matter of life or death. Required levels of throughput must therefore be guaranteed to enable a viable service. As such, telecom service providers need to assure the network performance to enable these mission critical services to be rolled out with confidence. Manufacturers, insurance companies and healthcare organisations will pay a premium for such assurances.  In the consumer and SMB sectors mobile cloud gaming and virtual conference calling systems are two likely use cases where a premium could be charged to guarantee the quality of service and as such the customer experience. A recent study by Ribbon Communications proved that hard-core gamers would pay more for 5G if it could guarantee a better playing experience. The majority (60%) would pay at least 50% more than they’re paying today. That is a significant increase for telecom service providers to contemplate. And this is likely to evolve to new models as our online presence becomes more and more the norm for how people use and experience services.

Network Monetisation: New use cases, new pricing models

These use cases can mean the introduction of tiered pricing for 5G embedded network services. We’re already seeing some service providers in the UK, Switzerland and Finland sell 5G based on speed tiers. The thinking here is that people may not know how much data they’re using, but they will notice different speeds. In an enterprise setting, this means telecom service providers charging more for premium quality of experience (QoE) courtesy of bespoke SLAs. Tiered pricing for embedded network services brings additional complexity to telecom service providers to not only launch new services, but also charge appropriately for them. We may also see service providers launch specific offers, e.g. a working from home offer with guaranteed quality of service, or a 5G gaming offer with, say, Nintendo or Microsoft, backed by consumer speed guarantees and wholesales (gaming partner) SLAs. While having plenty of addressable use cases to monetise is good in terms of potential ROI, it creates challenges in terms of supporting and launching them all concurrently. Think about this another way; variable broadband in a fibre world is a highly valued service generally enabled by real time, user controlled, SD-WAN functionality. 5G networks can allow for differentiated speed tiers for different services, on different devices, in different places at different times or contexts – and as such is likely to be seen as more valuable.

Making the 5G network a central feature in 5G offers

The 5G service reality facing telecom service providers is that there will be more devices and services to support. These will have new chargeable elements for parts of these services, more network functions to manage, new business models to contemplate and multiple partners to manage as transparently as possible. This requires connecting thousands of offers with countless network functions to offer services on demand. It also needs dynamic capacity allocation on a network slice-by-slice basis. Doing all this seamlessly to effectively monetise each service requires the creation of a 5G value plane. This provides a bridge between the 5G network and the IT and business functions in a service provider. Integrating 5G policy and charging functions in a 5G value plane into the service catalog in BSS, and also the 5G networks, will ensure that service providers can quickly develop, manage and monetise new 5G services. In these services, the 5G network will take centre stage as the quality of the customer experience is a central part of the overall offer. However, in order to enable this the 5G value plane must have a deep understanding of IT and BSS as it needs to be seamlessly integrated with the service catalog.  As well as this there needs to be seamless integration with the 5G networks, which increasingly will mean integrating with OpenRAN, as well as the kit from the traditional network equipment providers.

Finally, the age of hyper connectivity will also require automated service creation, modification and opt-in / opt-out consumption. Monetising tiny business models for a few hours as well as large business models for long periods of time is all possible with the right infrastructure and tooling. And it is available today.

Standalone 5G will herald an unprecedented range of use case and services. Many of these new services will be network embedded services – where the service provider cannot be pushed aside to be a dumb pipe provider but will instead take centre stage in the creation, development, monetisation and management of 5G services.

I wish you all the best for the Holidays and New Year. I can promise you an interesting 2021!

Niall Norton