Network Slicing Value Can be Achieved Other Ways

Mobile network operator network slicing services might be more important as a way of shifting revenue from fixed to "mobile" networks than creating net new revenues similar to virtual private networks or MPLS.

If enterprises buy network slicing services, they might do so while replacing older services such as MPLS, for example. That could shift revenue from "fixed network" to "mobile network" ledgers.

Also, network slicing could shift revenue from inrastructure suppleirs to managed service providers.

The issue is that it is not clear whether 5G core network network slicing will create a big new revenue opportunity for mobile operators on a net basis, as other managed service spending might decrease.

On the other hand, it does not seem that rival infrastructure deployments (enterprises deploying their own appliance-based networks) will be easy to create.

Also, ways of satisfying the need for ultra-low latency performance can be achieved other ways, such as by using edge computing, especially on the premises, or by deploying a private 5G network on the premises.

ABI Research forecasts predict $34 billion in slicing revenue by 2028. 

Research and Markets 

Existing virtual and other private networks generated something on the order of $38 billion in 2021, according to analysts at Research and Markets. But most of that revenue was earned by appliance and software  suppliers, just as most Wi-Fi revenue is similarly earned by device and software suppliers, not “service” suppliers.  

That is true fo the software-defined wide area network market, for example.  

Some managed services are provided by service providers of one sort or another, to be sure, of which MPLS is arguably the most-important carrier-provided service, followed by SD-WAN. 

It also is fair to say that network slicing could wind up largely displacing other quality-assured networking alternatives, such as MPLS, for example. In that case the issue is the net change in revenue, not so much the gross revenue network slicing generates. 

The point is that it is unclear how much net revenue network slicing might generate for mobile operators. To the extent that revenue is shifted from one supplier to another, or one industry segment to another, there could be important net gains. 

Still, at least so far, network slicing promises incremental revenue that is helpful, but unlikely to change the macro revenue picture all that much.