Network slicing may create $66b for enterprise verticals by 2026

18 Dec 2018
00:00

As 5G becomes a reality and mobile carriers accelerate the deployment of 5G networks, end-to-end network slicing is set to play a larger role in network transformation. But mobile service providers (MSPs) must change all aspects of their business before they can address it, says ABI Research.

The research firm predicts network slicing will create $66 billion in value for enterprise verticals by 2026, largely driven by the manufacturing, logistics, and transportation sectors.

The adoption of 5G network slicing for manufacturing alone is expected to create $32 billion in value, representing a CAGR of 96% through 2026. The second biggest revenue opportunity lies in the logistics sector, where the market is projected to increase from $65 million in 2019 to $20 billion in 2026, at a CAGR of 127%.

ABI Research senior analyst Don Alusha said 5G network slicing has become the focus of much attention in part due to its intrinsic ability to afford flexibility and dedicated resources tuned to different industrial use cases.

“Industrial segments such as manufacturing, logistics, and automotive are pursuing digitalization and automation with vitality and substantial investments,” he said.

“5G network slicing aims to serve as a stepping stone to drive productivity growth and enable the high-performance connectivity that underpins the dynamic, secure, and reliable interconnection of industrial systems and machinery.”

While network slicing may create $66 billion in revenue by 2026, this will only represent a mere 6% of total mobile service provider consumer revenues in that year. This means there is a larger marketing opportunity for mobile operators to further explore, and operators need to step out of their comfort zone in order to tap the full potential of network slicing, ABI Research hinted.

They need to improve their marketing messages, invest in proof of concepts in new areas, engage in new brand partnerships as well as invest in creating customized solutions, the research firm said.

“Our projections point to a healthy growth outlook but except for Telefonica, BT, and Deutsche Telekom, there is not much market activity of substance. The mobile service provider (MSP) ecosystem extends beyond this trio of operators, so we anticipate the wider community to start addressing enterprise verticals and entering an exploration phase in the coming years,” Alusha concluded.

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