Communication Service Providers (CSPs) globally continue to push 5G deployments, rolling out 5G non-standalone (5G NSA) networks using existing 4G LTE cores with radio access network (RAN) upgrades, or jumping straight into 5G standalone (5G SA) network builds. The billions of dollars of capital expenditure CSPs spend on 5G buildouts must generate a return on investment (ROI). Yet simple enhanced mobile broadband (eMBB) services have not produced significant results with average revenue per user (ARPU) and average revenue per account (ARPA).
The industry believes that new monetizable services are bound to emerge, just as ride-sharing, real-time mapping, and augmented reality (AR) mobile gaming apps appeared later in the 4G LTE lifecycle. In the meantime, a bright spot emerging in 5G roll-out is fixed wireless access (FWA), which has gained traction across different markets, including the United States.
5G FWA — A Bright Spot in 5G Adoption
Analysts and management consulting firms anticipate a promising outlook for continued FWA growth. Deloitte predicts a 19% CAGR in total FWA connections from 2020 to 2026, with 5G FWA connections growing at 88% CAGR.
And recently, the Global mobile Suppliers Association (GSA) released findings of an annual market survey that show 5G FWA customer premises equipment (CPE) shipments more than doubled to 3.6 million in 2021 (a 162% Y-on-Y increase), and predicts another doubling in 2022.
Network Slicing plus FWA Brings Enterprise Value
FWA enables rapid, cost-effective connectivity for homes and businesses without the need to lay new fiber. FWA also acts as an alternative broadband option for primary or secondary connectivity for businesses. To unlock further value using FWA, CSPs are running trials and developing new services leveraging 5G.
The ongoing digital transformation of businesses, and exploration of new interactive and real-time applications will place more demand on connectivity. To ensure that FWA remains a viable alternative or addition to fiber, improved end-to-end quality of services upon which new business applications can be built will be needed. Network slicing can help with that.
Network Slicing is not a Panacea
There's plenty of hype around network slicing as the answer to all things 5G. Monetization? Consider network slicing. Innovation? Let’s do network slicing. New business services? Of course, network slicing.
To be clear, network slicing is a technology in 5G networks that enables a virtual instance or slice across a common physical infrastructure. Going beyond the 4G QoS Class Identifier (QCI) mechanisms for QoS, 4G Access Point Name (APN) capabilities, and their 5G equivalents (5QI and DNN), network slices span from the User Equipment (UE), through the RAN, to the core. Each slice is isolated from another, separately managed, and can exhibit different performance characteristics.
There are few commercial offerings based on 5G network slicing today, and those that are offered are limited in their scope. To find scalable monetization opportunities, CSPs must continue experimenting and work with partners in the network equipment provider, enterprise, hyperscaler, data center, co-location, and independent software vendor ecosystem.
As sophisticated as network slicing is, it is merely an enabler to new services that build on top of these capabilities. There's plenty of experimentation and ongoing development needed. CSPs must continue building up their capabilities to enable and explore new services to determine traction and product-market fit.
FWA with Slicing — Better Together
Many of the early demonstrations around slicing involve mobile phones as UE (User Equipment). This is unsurprising since Google made progress with improved support in Android 12 and 13 Beta for network slicing. This includes providing operators with the ability to direct UEs to switch between slices per application using a dynamic policy control mechanism — User Equipment Route Selection Policy (URSP). Android 12+ also supports work profiles that allow different slices for professional and personal traffic.
Nevertheless, we are aware of leading CSPs starting the push for network slicing support in their 5G CPE tenders, and we expect this trend to continue. With the rapid uptake of 5G FWA and potential monetization opportunities for the B2B market, carriers should look to partner closely with innovative CPE manufacturers to explore slicing-powered use cases. We know that network slicing alone isn't enough to trigger massive monetization — there are other important components yet to be discovered, which makes starting this journey early even more critical.
