How Telcos are Mining Rich New Revenue Streams Thanks to Network Slicing

One of the most promising potential sources of new revenue offered by 5G is network slicing – the ability of telecommunications operators to create and deliver secure, individual networks for different customers, using the same physical infrastructure. There has already been a great deal of progress in this field, with rollouts in various business sectors such as IoT, smart cities, healthcare and industry, and this is only expected to continue in 2025 and beyond.

The benefits of network slicing

Telcos are keen to embrace the concept of network slicing (and private 5G networks) for several reasons. Investment in this technology paves the way for greater efficiency, which benefits both the operator and their clients. It also means services can be customized in line with the precise requirements of any given business. And, of course, it means that operators are better placed to offer high-performance solutions. So where is network slicing making an impact?

Which sectors use network slicing?

In the smart cities sector, Verizon in the United States has partnered with cities such Los Angeles to deploy 5G network slicing for smart city applications, including autonomous vehicles and smart traffic management. The $150 million project aims to use customized network slices specifically built for speed, reliability and security to generate $30 million annually.

Meanwhile, in China, one operator has been focusing successfully on industrial IoT. In fact, China Mobile is a pioneer in the deployment of network slicing for this particular vertical. In 2021, the organization deployed 5G slicing tailored for low latency in order to optimize smart manufacturing and logistics. Its $200 million project in partnership with an automotive manufacturer is expected to generate over $50 million annually by 2025.

Healthcare, too, is seeing the benefits of 5G network slicing. In 2023, Etisalat launched a private 5G network slice for hospitals and healthcare providers to support telemedicine and remote surgeries in the Middle East. Again, the benefits can be measured in numbers; an initial $100 million investment in the project is expected to generate $25 million annually as the network slice helps meet demand for high-quality, low-latency networks in the region.

Finally, let’s look to Saudi Arabia and a sector not often associated with cutting edge technology – agriculture. STC has introduced a 5G network slice for agricultural IoT applications, helping farmers monitor irrigation, crop health, and machinery. The initial investment in this project was $80 million, and this is expected to generate $20 million annually by 2025.

The future of network slicing – onwards and upwards

There is no doubt that operators globally understand the value of investment in network slicing, and are keen to explore new avenues of cooperation that will drive business with diverse verticals. By targeting specialized sectors with tailored network solutions, operators can unlock significant new revenue streams and meet the evolving demands of the digital economy.

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Sources:

1. Verizon is using 5G network slicing to offer better video calling — for a price; Allison Johnson; December 12, 2024
2. China Mobile CMIOT Collaborates with Huawei to Enable Thousands of Industries and Drive Intelligent Connectivity of Everything; Telecoms.com; October 30, 2024
3. etisalat by e& Capitalizes on 5G Network for UAE Healthcare Services; TelecomReview; November 17, 2022
4. stc's Journey: Pioneering Innovations in Telecom with 5G Advancements; TelecomReview; February 29, 2024