ericsson.

com/
network-slicing

Network slicing:
A go-to-market guide to
capture the high revenue
potential
Based on a study with
Ericsson and Arthur D. Little
2 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

5G and the rising interest

in network slicing
Network slicing provides an enormous business potential for
communication service providers, which opens up many different
opportunities and possible go-to-market roles – especially in the
enterprise segment.

Technological advances across The study came about the acknowledgement Ericsson partnered with Arthur D. Little
large industries are increasing the that there is a gap in the industry in truly to conduct market research on network
demand for high-performance, flexible understanding the potential of slicing. slicing to determine future market
communications services. Network While there are several reports out there, opportunities. This report focuses on the
slicing is emerging as a critical way to few, if any has, the breadth and scope to macro value of network slicing and the
address the service gap between “good- answer the questions a CSP would ask when opportunities for communications service
enough” public networks that cannot considering investing into, deploying and providers (CSPs). This is the first report
meet these demands and specialized monetizing network slicing. of four. In the second, we discuss the
private networks, which requires a higher top 10 industry segments and selected
investment and equipment on-prem. We – What is the revenue potential of use cases. In the third, we cover the
now see a clear business potential for network slicing for CSPs. end-to-end solutions for network slicing
network slicing of USD200 billion in 2030 – What is the potential across industries and in the fourth we outline the network
with strong CAGR. and segments and link specific use slicing deployment journey for the CSPs.
cases that are stronger cases for slicing
3 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

The need for network slicing and

the current challenges
5G comes with a promise to open up new revenue streams from
IoT and enterprise services. Network slicing is the key technology
in 5G to address the full potential .

Figure 1: Network slices enable fit-for-purpose independent virtual networks

Today’s
requirements

Tomorrow’s
requirements

Slice 1 Slice 2 Slice 3 Slice 4 Slice 5

A slicing enabled network

Allocating and isolating network resources where most needed to the right specification

When it comes to wireless cellular The diversity of requirements will only then, expansion won’t fully satisfy every
data, one shared public network has grow more disparate between use cases — use case with the ultra-high reliability,
been the norm. Businesses have relied the one-size-fits all approach to wireless security, ultra-low latency and other
on this network for most non-critical connectivity will no longer suffice. demands that many use cases will require.
work such as conference calls, booking
systems, backup security cameras, digital Deploying new physical networks for all Standalone private 5G networks may be
payments, Intranet and video on demand. services and locations or reconfiguring an attractive option for CSPs to sell or
existing ones for specific use cases is not provide as a managed service to some
However, it’s clear that the one shared a viable solution to this challenge. Doing enterprises, because they provide more
public network cannot meet the needs so would be prohibitively expensive and granular configuration and specification.
of emerging and advanced mobile it limits flexibility for new services or use But it’s not feasible for organizations
connectivity use cases, which have a cases — essentially, this would just create who lack the time required to deploy
diverse array of technical operations the exact same problem five years in the a standalone network, the necessary
and security requirements. Growth in future, while simultaneously hindering capital investment and the capabilities
the Internet of Things (IoT), enhanced innovation with an inflexible network. to manage it. Additionally, standalone
mobile broadband and critical machine- private networks won’t provide wide area
type communications are opening Taking a closer look at current public coverage without integrating them into
up new revenue streams, business networks, the current level of network the public network, in which case, the
partnerships and use cases. These use resources cannot match the increasing organization will only see the benefits of
cases have higher requirements on diversity of demands over time. And their private standalone network locally.
network performance, and if these are not while these networks are expanding,
achievable, the use cases will not function. such as with the current 5G rollout, even
4 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

The essence of network slicing

Network slicing is a paradigm where CSPs the benefits of both public and private performance and security. But unique
create logical networks or partitions with standalone networks, along with some to network slicing, it’s more flexible
the appropriate isolations, resources and unique characteristics of its own. than either public or private standalone
optimized topology to provide a service to networks, and can be rapidly deployed,
meet the unique requirements of a specific Like a public network, slicing provides the configured, modified and taken down as
use case. It conserves precious network coverage and convenience of a typical needed at a considerably lower cost for the
resources from non-critical use cases and public 4G or 5G subscription, and it’s easy enterprise customer. And it can do all this
activities, so they can be deployed where to purchase and install. Like a private while also providing wide-area coverage.
needed and where someone is willing network, it enables traffic isolation, a high
to pay for it. As a result, slicing provides degree of customization and comparable

Figure 2: The private network slice gives wide-area coverage for dedicated services

Public and Network slice Private and

shared Public and isolated
isolated

Convenience & coverage Flexibility & speed Performance & security

of the public NW unique to slicing of the private NW

Isolation bring functional benefits

Apart from the benefits of dedicated But it may have even larger benefits for hybrid mobile private network, where the
service characteristics also including security, which can be customized per enterprise would have certain resources
granular monetization, the isolation slice to meet unique security requirements. and functions dedicated closer to their
enabled by independent slices has many Additionally, if an attack is successful, premises, but also leverages a public slice
other benefits for customers and CSPs. it will be contained within the slice and to ensure a strong connection for needs
First, it increases robustness, because will be unable to move laterally across that stretch beyond the premises.
faults or outages in one slice have no effect the entire network. And when exposure
on other slices. Additionally, time to market evolves, data isolation between slice With either archetype, slicing enables
can be shorter because there are fewer customers is much easier to maintain. CSPs to manage costs internally through
dependencies on other network functions better utilization of network resources
and organizational teams during the There are two main archetypes of public and customize network resources to meet
integration and testing phase. slicing. The first is a public network slice, specific needs.
which is described above. The other is a
5 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

Challenges to implementing
network slicing
Network slicing is an emerging service, to target will determine the types of
so there are some challenges to network use cases to support, which, in turn, Challenges:
slicing that CSPs will need to overcome. will determine the technical capability
– Tailored pricing
deployment journey for the CSP.
Slicing will enable tailored pricing. Slicing – New sales & deployment
enables customers to have flexibility, There are technical considerations, as processes
security, simplicity and network performance well. CSPs will need to establish cross-
tailored to specific and demanding use case domain coordination, enable performance – Industry vertical expertise
requirements, so pricing and business models guarantees and network isolation, – Enterprise market strategy
will need to be adapted to both articulate and conduct slicing management and end-
capitalize on the value of network slicing. to-end orchestration, and make sure they – Technical considerations
possess the necessary slicing resources – Regulatory considerations
This deep level of customization will also and requirements.
require new sales and service deployment – Privacy rules
processes. Offerings based on network There are also regulatory considerations. Net
slicing can’t easily be categorized in a few neutrality may prevent CSPs from providing
tiers or buckets. different tiers of service optimization in some
on their networks, there are rules and
circumstances. Since slicing isolates data
They will also require CSPs to gain vertical procedures such as take-down processes
traffic in its logical partition, there is traffic
customer domain understanding. With one that must be followed when illegal
discrimination on commercial grounds,
public network for all, CSPs could provide content is reported to the CSPs. These
which may conflict with net neutrality rules
services without having to go deeply into issues will also need to be addressed for
and could limit a CSP’s ability to monetize
their customers’ businesses. But with slicing, and they may need to be dynamic
and optimize the slicing opportunity.
slicing, these resources will be customized to each slice implementation.
for specific use cases, requiring specific As 5G and slicing become widespread,
Finally, the global economy increasingly
knowledge of the vertical to be successful. and service providers are sharing
depends on cross-border data transfers.
To gain this vertical expertise and network resources, the complexity of
International frameworks such as APEC
successfully go to market, CSPs will need the landscape increases, which may in
Cross-Border Privacy Rules have helped
to forge strong partnerships and take part in turn challenge regulations that govern
create some international regulatory
developing ecosystems to support slicing. specific customers’ verticals, especially for
standardization, they may be challenged
mission-critical use cases.
This reinforces the need to have an by local rules, such as those around data
enterprise market strategy in place, Also, while CSPs are generally not liable localization and data sovereignty.
because the choice of industry segments for illegal content that third parties have
6 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

Business models and go-to-market roles

Network slicing opens up for new business models as the network
becomes a platform for other businesses. This will result in new
partnerships and go-to-market models.

Network slicing provides an enormous amount of flexibility and potential for

customization. As a consequence, there are many different opportunities and possible
go-to-market roles for CSPs.

CSPs will play a different role in relation to the end-customer depending on the domain:

B2C: In the business-to-consumer B2B/B2G: In the business-to- B2B2(B2)X: Here, the slice buyer is
domain, the CSP charges a premium business or government (B2B/B2G), using the slice to realize a use case for
directly to the consumer for higher the “slice buyer” is the end customer, a customer. The chain could be long
quality or dedicated access to typically a government entity or with the second customer selling slice-
content that is delivered by slicing. business that uses the slice to realize enabled services to yet another entity.
a use case for internal operations. Example:
Examples:
– A customer buys access to low Example: – A cloud service provider buys a
latency mobile gaming on their – A manufacturer buys a service slice to provide dedicated, high-
smartphone or gaming device. that is based on a network slice throughput wireless connectivity
to realize a robotics use case on a for a gaming platform company
– The CSP offers fixed wireless
production line. who then uses the combined
access (FWA) based on a
package to power a premium,
dedicated network slice.
high-performance game
subscription for consumers.
7 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

Big revenue potential with slicing

Industrial digital revenues offer growth Figure 3: A USD 200 billion USD opportunity for CSP network slicing
opportunities for CSPs. The current can be derived from the total global digitalization revenues
CSP business will have a 0.75% CAGR,
compared to 12% for digital industrial. Key modeling steps Key assumptions
Looking at the total digitalization
revenues, Mobile enabled revenues Step 1: Aggregation of external reports on industry digital:
will also grow faster with a 20% CAGR Allocate digital revenue ~3800 – Full ICT value chain (SW, HW, services,...)
compared to 9% for the total. potential across industry – All industrial use cases (B2B, B2G, B2B2X)
segments – Addressable by all ICT players
Cellular connectivity becomes increasingly
relevant for industries with the growth of
IoT and connected objects. Arthur D. Little Step 2: Breakdown of mobile enabled share by use case:
(ADL) estimated the total digital revenue Isolate 5G mobile enabled ~1490 – 5G created (100%)
potential for industries and allocated revenue across segment- – 5G enhanced (75%)
specific use case – 5G independent (0%)
that revenue across industry segments.
It comes to about USD 3.8 trillion for the
total revenue potential for all information Assessment of slicing-enabled share per use case:
and communications technologies Step 3: – Most likely slice (60%)
Isolate slicing enabled ~510
(ICT) companies for the adoption and – Likely slice (30%)
integration of digital technologies to revenue for each use case – Not likely slice (10%)
enable new digital use cases. ADL then – None (0%)
isolated the mobile-enabled revenue from
a 2030 perspective, which is essentially Step 4: Estimated value chain and CSP addressability per 5
5G-enabled revenue for three categories: Isolate CSP addressable ~200 value chain steps, based on 4 categories of use case
slicing enabled revenue for business model archetypes
– 5G created: Required for deployment each use case
– 5G enhanced: 5G is preferred, but
not required
510 billion, or 30% of the mobile-enabled The addressable opportunity for CSPs
– 5G independent: 5G is one of many revenue. The subset of slicing-enabled with network slicing is USD 200 billion.
possible solutions for connectivity revenue that CSPs could address comes to When split by industry, it shows that
roughly USD 200 billion. In 2025, the same the top 6 industries account for 90% of
ADL analyzed more than 400 5G use figure is estimated to be 45 BUSD, which the revenue potential. Healthcare is the
cases, which generated a USD 1.490 implies an annual growth rate of 36% for largest followed by government and
billion figure, roughly 40% of the total slicing enabled use cases addressable by transportation. The CAGR for the top
revenue. From there, ADL isolated the CSPs. Network slicing will power roughly industries ranges from 23-46% during the
slicing-enabled revenue from the mobile- 30% of 5G revenues for CSPs. period 2025 – 2030 which is substantial.
enabled revenue, which is roughly USD See figure 4.

Figure 4: The industries with the highest revenue potential for network slicing for CSPs.

Retail Agriculture
3% 2%
Financial services

Media and 6%
21%
Healthcare
90%
of industry value in top
entertainment 6 industries
11%

~200 BUSD
12%
23%-46%
Manufacturing 17% Government

CAGR in each industry

14%
15% (2025-2030)

Energy and utilities Transportation

8 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

30% of 5G use cases need network slicing

A lot has been written about 5G use cases. Figure 5: A combination of slice and private network is the most popular.
It’s important to state that not all use
cases will require slicing. That said, we Percentage of respondents
estimate that 25-30% of the potential
Hybrid deployment model 49%
5G use cases will need slicing as an
enabler as derived from figure 3. Many
use cases will also have the potential for
Network slice model 36%
early deployment, including mobile cloud
gaming, mission-critical push-to-talk,
remote broadcast, software over-the-air Private network model 12%
updates, and predictive maintenance of
rail tracks and powerlines. We explore
these use cases in depth in our second Not decided yet 3%
report, which focuses on industry
segments and use cases.
0% 10% 20% 30% 40% 50%

Three ways that network slicing

drives CSP revenues
First, slicing can bring in new customers, Figure 6: Enterprises show high preference for 5G as a connectivity technology
who, for example, may be interested in the
capabilities of 5G. In recent years many Local connectivity technologies Manufacturing Transport Financial svcs. Retail Healthcare Public sector
enterprises have expressed their interest
Wi-Fi 57% 38% 55% 47% 50% 74%
to Ericsson in using 5G as a connectivity
technology as a public network slice, as a Ethernet LAN 57% 38% 55% 47% 50% 74%

private 5G network or as a combination of Optical fiber 53% 38% 56% 47% 63% 65%
both. Below are some findings from a recent
Private LTE (4G) network 45% 31% 25% 27% 33% 61%
study of 200 enterprises from Analysys
Mason in collaboration with Ericsson. Private 5G network 76% 92% 75% 80% 75% 83%

Zigbee 25% 23% 18% 27% 25% 0%

Second, new services can enable CSPs to
capture larger parts of the value chain. In Wide are connectivity technologies Manufacturing Transport Financial svcs. Retail Healthcare Public sector
patient services, for instance, CSPs can
MPLS 35% 38% 20% 42% 33% 13%
not only use network slicing to provide
isolated, low-latency and high-throughput SD-WAN 41% 38% 40% 40% 50% 39%

connectivity for video streaming and Narrowband-IoT (NB-IoT) 37% 46% 25% 40% 42% 30%

assessment of patient conditions in an Satellite 45% 46% 25% 40% 46% 52%

emergency vehicle, but they could also Tetra 6% 8% 9% 11% 17% 4%

partner with software and hardware
developers to sell a complete solution.

Finally, slicing can drive revenue by Figure 7:Drivers of slicing revenues for CSPs
enabling premium pricing and new
business models. Demanding use cases
require tailored services, after all, which can
command a larger fee. A network slice to a
logistics company might provide additional
bandwidth and network isolation to enable
high-quality, secure monitoring for valuable
goods that require a strict cold chain. That
service will command a higher price than
ordinary wireless connectivity from the LTE New customers New services Premium pricing and
or 5G network. Increasing adoption of Possibility to capture new business models
5G among enterprises – larger part of the Demanding use cases
the “5G hype” value chain require tailored
services and pricing
9 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

The CSPs role in the network slicing

value chain
The traditional role for CSPs are in the network connectivity,
management and operations domains. There is a good
opportunity to capture 43% more by addressing the whole value
chain and take the role as service creator.

Figure 8:
Revenue The distribution
enabled of the
by network slicing 200 BUSD
– business CSP
value slicing revenue
distribution potentialshare
& CSP addressable

Devices & retrofitting Network mgmt. & operations Apps & value add services
Network deploy & connect. provisioning Platform provisioning

Value enabled
102 94 72 105 142 ~510
by slicing

Addressable
17% 89% 74% 29% 12% ~40%
share CSP

CSP addressable
17 83 53 31 17 ~200
value

CSP traditional markets

CSP extended markets

When it comes to where CSPs can capture 3. Network management and operations: and management parts of the value chain,
part of the value chain, that depends on Ongoing network slice configuration, where they are likely able to capture a
the footprint, vertical domain expertise user and device management, security large share of the revenues. In total, this
and scope of services that the CSP management and support potential for the network developer role
possesses. In network slicing, the basic would be smaller at USD 140 billion.
value chain is as follows: 4. Platform provisioning: Provisioning Acting as a service creator adds an
of platforms such as IoT, streaming, additional 40%, but they must provide
1. Devices and retrofitting: Examples: gaming, AR/VR and remote work. additional services such as reselling
Retrofitting trains and cars, positioning devices, provisioning of platforms such as
of robots, drones, VR/AR glasses, 5. Application and value-added services:
IoT, and packaging and providing on-top
smart meters Enterprise and consumer infotainment
services. Competition for these additional
and entertainment applications; data
services will be high, and CSPs will face
2. Network deployment and connectivity monetization
a wide array of ICT players, including
provisioning: Network slice deployment
The core services for CSPs would typically hyper scalers, application developers and
and configuration, testing, installation
be in the network connectivity, deployment software developers.
of additional hardware
10 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

Strategies to succeed
Working within the ecosystem that relevance to 5G network slicing. Your Determine end-customer demand for
encompasses the targeted use cases ability to win depends on those existing the use case from early slicing trials, test
is critical for CSP success with network customer relationships and reputation, and pilots, actual tenders on slicing, and
slicing. The slicing market is still in the the complexity of the deployment and CSP surveys or statements. Are there
early stages of maturity, so CSPs should integration, as well as synergies with ecosystem partners for whom network
begin by working closely with current existing capabilities and ecosystem slices would make their own products
enterprise customers and partners to partnerships. With the knowledge you and services more appealing to their
better understand their business and gain about the kinds of use cases they are customers? Are there ICTs who could
their needs. Why existing customers interested in pursuing, identify those that help with go-to-market plans and have
and partners? Because it’s far easier to could benefit from a network slice and customers who would derive value from a
make that initial sale of a network slice determine the requirements. network slice?
to customers in an industry with which
you already have some familiarity and Each industry use case will have a unique Assess the regulatory environment. Are
with whom you have already built at least ecosystem that contains a variety of there regulatory barriers or enablers
some degree of trust. different players, each of which plays a for the use case or within its industry
role within the value chain. For example, segment, such as data privacy, security
When selecting industry sub-segments to in broadcasting there are equipment and liability? Regulations don’t have to
target, use the segment’s attractiveness providers, content creators, content be a barrier. There could be policies and
and your ability to win as criteria for distributors, broadcasters and network government programs in place that could
consideration. Attractiveness includes the services providers. CSPs must determine help increase adoption of the use case.
strategic fit or alignment with enterprise the role they can play within the ecosystem
strategy, its overall market potential and identify partners for whom network
from revenue or demand, and the market slicing will add value to their own offerings.

Figure 9: The overall strategy and deployment journey for network slicing

1 2 3 2
Identify and prioritize near-term
Select target Identify and close opportunites (segments and use caeses)
industry and capability gaps Deploy, replicate
ecosystem role for early slicing Customer Local and scale
to pursue developments Use case Business
maturity market
maturity potential
& interest condition

Build commercial and technical The network slicing enablement

capabilities
consists of three main blocks:

1. The network slicing enablement

consists of three main blocks:
New processes and operational roles will users. Slice-based services will require Network slice management and
need to be defined, given the commercial new pricing models based on value. orchestration
requirements on slicing enablement,
service design, service deployment, Technical capabilities will be built on 2. Management of services,
assignment and operations. Roles will the foundation of NFVI and VNFs/ revenue, customer and partners,
be needed for slice design based on CNFs like 5G Core and network resource resources, etc.
templates and use-case design to make management.
3. Market storefront, customer
up a service model that can be life cycle The deployment of network slices is a channel and journey, sales and
managed. Later slice-based services will journey over several years and the buildup marketing.
be possible to self manage by enterprise will take place in a few waves.
11 Ericsson  |  Network slicing: A go-to-market guide to capture the high revenue potential

The network slicing deployment journey

The deployment of network slices is a simple, fairly static slice can satisfy, the extremely demanding requirements. But
journey over several years and the buildup organization must identify ecosystem those days are yet to come. Right now,
will take place in a few waves. partners and a go-to-market strategy, CSPs need to focus on enabling the very
and then learn as you grow. Build a plan first, basic proof-of-concept slices to gain
Near-term, slices will be basic and limited for the ecosystem to pursue, depending the market and technical experience
in number. Costs will be high; slices will be on the competitive landscape. Will required to lay the foundation for more
fairly static and most use cases will include the CSP act as a network developer, a advanced slices.
shared and isolated traffic. Customization service creator or a hybrid of the two?
will be limited to derivations of the generic What capabilities does the organization Long-term, however, the slicing market
slice types and use case requirements will possess, and what roles will need to be will change dramatically. Over time,
not be especially demanding. Slicing will filled by partners? prices will fall, while the slices themselves
initially appeal to large customers with big become dynamic, with a high degree
budgets who are in most need of slicing Over time, slices will become more of resource allocation and isolation.
capabilities to solve immediate pain points. dynamic and the cost of operating them Many cases will include very demanding
will decline. Slices will become much requirements, and slices will be adapted
Once CSPs have identified one or more more customized and completely isolated for niche segments with smaller
use cases with requirements that a from one another, with the ability to meet customers that have specific needs.

– Enable basic slicing functionality in the CSP networks

Wave 1 – Focus on network slicing manager, template management, domain

Basic slicing orchestration and repositories
functionalities
– Deploy few static slices only (<20) with basic level of automation or manual for
simple connectivity centric use-cases

– Development of slicing automation across network domains

Wave 2
End-to-end slicing – Deploy E2E orchestration, resource-, product and revenue management
automation and scale
– Scale to deploy hundreds of slices within the network

– Enhance CSP capabilities by business- and customer enablement functions

Wave 3 – Focus on channel- and partner management, sales- and marketing and a
Advanced slicing marketplace
business models
– CSPs to deploy hundreds of dynamic slices with back-end system functionalities
to enable advanced slicing use-cases

Conclusion
To capture the USD 200 billion market potential for CSP it will be key to establish an
enterprise go-to-market strategy and to build out commercial and technical capabilities.

Identifying scalable, replicable use cases and develop relationships with strong
ecosystem partners who can help bring the solutions to market will be the keys
to success.

Network slicing will provide substantial opportunities for CSP growth over the next
decade, and to take advantage of this opportunity as the market and technology
matures, the journey needs to start now.
Ericsson enables communications service providers
to capture the full value of connectivity. The company’s
portfolio spans Networks, Digital Services, Managed
Services, and Emerging Business and is designed to
help our customers go digital, increase efficiency and
find new revenue streams. Ericsson’s investments in
innovation have delivered the benefits of telephony
and mobile broadband to billions of people around
the world. The Ericsson stock is listed on Nasdaq
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