As communication service providers deploy 5G, they are looking to use network slicing to push growth opportunities beyond offering simple connectivity to selling value-added digital services.
The advent of 5G networks introduces new network functionality for communication service providers (CSPs), notably including network slicing, which enables them to carve out and create multiple end-to-end networks on a common infrastructure platform. CSPs can automatically configure and optimize each network slice to support performance requirements for a wide variety of customer use cases, applications, and traffic assigned to that network.
Explore the Thinking Fast series library
Subscribe and never miss a charticle
Learn about Deloitte's services
Go straight to smart. Get the Deloitte Insights app
While significant technology and standards-based obstacles remain, network slicing is emerging as a potential source of future revenue growth for communication service providers. CSPs intend to use network slicing to move beyond selling simple connectivity to offering enterprise customers more advanced connectivity options—specifically, guaranteed levels of network performance on a given network slice. It remains to be seen whether (and how much) enterprises will pay for bespoke network connectivity, but CSPs see these types of opportunities as ultimately driving ROI on their 5G infrastructure build, so they are staking much on getting this right.
Enterprises, however, can choose to build and manage their own private network slices, particularly as the United States, Germany, Sweden, the United Kingdom, and other countries plan to allocate spectrum for private 5G networks.
In a recent Deloitte survey of leaders in enterprises on the forefront of adopting 5G, 43% expressed willingness to use a combination of private and public network slices depending on the use case, likely deploying private networks within the four walls of the enterprise environment and public networks for broader WAN connectivity. Faced with the choice, another 25% preferred CSP-managed public network slices, while 24% wanted to own and operate their 5G network outright.1 Ostensibly, enterprises considering private over public networks seek greater control over their networks’ configuration, performance, and security.
Concerns over network security, however, could emerge as a major stumbling block to enterprise adoption of public network slicing. Beyond specific application criteria, network and data security concerns constitute the largest factor influencing enterprise decisions to adopt public network slices, followed by concerns about service quality and reliability.2 In an environment where companies regularly fight data breaches and cyberattacks and where every connected device becomes an access point for nefarious activity, strict control over device authentication and network access is paramount to both enterprises and CSPs. With 43% of enterprises desiring hybrid network structures, where devices will need to seamlessly roam back and forth between private (5G and WiFi) and public networks, who will control device and network access? To what extent should devices be homed to enterprise versus CSP networks? The resolution of these types of questions will determine adoption rates for network slicing.
To avoid missing out on this opportunity, CSPs should step up and take responsibility for positioning carrier-managed network slices as having the benefits of a private network without the cost and complexity of having to manage it themselves. And while public slices are likely to be the more cost-effective solution, they can also be equally if not more secure.