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Can slicing finally enable CSPs to monetize QoS?
The industry is united in its belief that slicing will usher in a host of new service monetization opportunities, with QoS-based control to deliver premium experiences – for B2B and B2C cases alike. But, if you sell something as a premium, you must be able to deliver. Pitfalls are in store without the right approach.
Is a new generation of premium services on the horizon?
Network slicing has long been heralded as a key breakthrough that will enable CSPs to monetize complex services delivered across 5G SA public and private networks. While the concept has been around for some time, commercialization has been contingent on more widespread availability of 5G SA networks. With slicing, service consumers can be given connectivity that meets selected performance criteria, backed by SLAs to guarantee delivery.
So, that raises the question – what exactly can be monetized here? While much attention is (rightly) focused on enterprise and B2B use cases (that may need to meet challenging performance requirements and the most stringent criteria), the ability to control QoS for specific users could also be beneficial for consumer applications.
This ability is really about optimization to meet the demands of individual services – and to improve the experience delivered beyond what can be achieved with a standard, vanilla service. It is this improvement that presents, in theory, the opportunity for monetization, by charging a premium. But which services could benefit from such performance levels?
Premium performance adds value across multiple applications
To understand the opportunity, we need to think about services for which performance is a key contributor to the experience. One promising candidate is gaming. With mobile devices increasingly used as an interface for online gaming – growing in both terms of users and revenue, according to Statista. While some games are asynchronous, or do not have demanding performance requirements, many others do.
And that’s the opportunity. Of course, it’s not new – there have been several efforts to provide premium connectivity packages to gamers over the last decade or so – but given the potential to offer make a real difference, it’s unsurprising that this has attracted renewed attention. Indeed, it’s become something of a poster child for consumer-based slice use cases.
Another area that seems rife with potential is video streaming. Not streaming in general, but rather that offered by specific content providers. The idea is that a CSP might partner with a content provider and then offer a package to its consumers that provides a guaranteed performance. Connectivity to that content partner would be enabled via a dedicated slice, so when a consumer seeks to access the service, they would be connected to the appropriate network slice.
Perfect for ensuring no disruption when watching a penalty shoot-out at the end of extra time, or to watch that critical episode in your favorite series. Such offers could be add-ons to existing user bundles or offered via vouchers. In either case, there’s the attractive scent of new revenue in the air (not to say, the potential for dynamic offers to be made, based on observed network conditions – “bandwidth is limited in your area, due to increased demand. Want an instant upgrade to continue watching?”).
A new focus on service assurance and experience is essential
The thing is, though, all these offers require two things. First, proof. Second, assurance. Consumers – particularly those that are already facing rising costs – simply won’t buy into such offers unless they really believe that they will receive the promised experience. People need to validate the experience – and then tell their friends, so others are attracted.
CSPs then face the challenge of maintaining that experience. After all, any such offer must be backed by guarantees (“you’ll get x for y% of the time”). Otherwise, regulators might want to have a word or two – and social media will annihilate the provider (“don’t believe what CSP x says; it doesn’t work!”). Clearly, this also requires assurance – and not just assurance that tells you what performance is being delivered, performance that’s integrated with dynamic orchestration platforms so that observed and predicted issues can be addressed, ideally before subscribers start to complain.
So, what do you need to ensure you can meet both requirements? A customer experience assurance solution. You need to be able to verify performance through time, proving that you meet your SLA for delivery in any given time period— not just to your customers, but also for any regulatory interventions. And you need to be able to take the appropriate action to ensure business as usual for your customers.
Guarantees cut both ways – your B2B partners need it too
The thing is, though, that it’s not just your consumer customers that need these guarantees and assurance. It’s also the B2B partnerships you build who need to be certain that partnering with you to provide premium content or gaming experiences is worthwhile – they will be expecting a share of that revenue too – and will likely look elsewhere if you cannot deliver or sustain the performance as user volumes ramp up.
It’s a two-sided game and everyone loses if there isn’t an effective customer experience assurance solution in place to ensure that services perform smoothly, at scale, and continuously – regardless of the demand at any one time.
5G slicing presents many opportunities. However, even a brief look at two of the likely candidates for consumer markets highlights the pitfalls. In truth, all slicing use cases demand experience management, across a wide range of different criteria and requirements (massive online gaming being rather different from an autonomous vehicle in a warehouse, or a remotely operated tower crane).
In the end, the question is, will users actually pay a premium for such services? The jury’s out, but one thing’s for certain: they won’t unless they get what they actually pay for. In other words, CSPs need to be certain that they back any QoS-based offers with the ability to prove that the service delivers the promised benefits – and to assure them while they are being consumed. Sure, there appear to be monetization opportunities aplenty – but there are risks. For CSPs to win with slicing, new levels of assurance are required, for what could be a diverse portfolio of services.
Are you ready? If not, talk to Elisa Polystar and find out how we can help you monetize slice-based services, across all your offers and segments.
