5G Network Slicing Market Slows, but Still a US$19 Billion Opportunity to be Seized

A growing ecosystem complexity and ongoing challenges with cloud-native tooling adoption have placed increased pressure on new service innovation, slowing expectations for growth in the 5G network slicing market compared to previous forecasts. Nonetheless, global market technology intelligence firm ABI Research forecasts the market will continue an upward, albeit slowed, growth trajectory to reach US$19.5 billion by 2028. Considering existing market activities, a growing force behind 5G slicing uptake is enhanced mobile broadband (eMBB) and fixed wireless access (FWA). To that end, there is growing market activity and commercial engagements from network equipment vendors (NEVs) Ericsson, Huawei, Nokia, and ZTE, among other vendors.

These market engagements are a good foundation for the industry to match 5G slicing technology to high-value use cases, such as Enhanced Machine-Type Communication (eMTC) and Ultra-Reliable Low Latency Communications (URLLC) URLLC. “5G Slicing continues to promise new value creation in the industry. However, as reflected in multiple ABI Research’s market intelligence reports, a solid software and cloud-native foundation must be in place for that promise to materialize. That, in turn, is a prerequisite for a wider diffusion of 5G core adoption, an architecture that provides native support for 5G slicing,” explains Don Alusha, Senior Analyst at ABI Research.

Beyond that, two modalities are emerging to deploy 5G slicing from an architecture perspective. One, share the whole infrastructure spanning Radio Access Network (RAN), core, physical devices, and physical servers. This constitutes a unified resource pool, the basis of which can be used to instantiate multiple logical connectivity transmissions. A second approach is to provide hardware-based logical slices by slicing the physical equipment. This is a time-consuming, resource-intensive endeavor, but it may be the best option for mission-critical services. It requires slicing the physical transmission network and oftentimes requires a dedicated user plane. 

The prevailing approach is a function of specific country regulations, rules, and policies on information and data privacy, as well as technology integration for cross-domain solution interoperability and business model innovation. End-to-end (E2E) 5G slicing involves different professional categories of the cellular domain, including the bearer network and the Core Network (CN), as well as the Transport Network (TN). It also involves different vertical industry applications, so it needs the maturity of the entire ecosystem. In the early stages, the industry can deploy sub-slices of the CN and then gradually expand to E2E 5G slicing.

“Horizontal integration for cross-domain interoperability is critical going forward. Equally important is vertical integration for 5G slicing lifecycle management of multi-vendor deployments. There is ongoing market activity for the 5G core network penetration and maturity of 5G slice management functions. To that end, enterprises will seek to create and reserve slices statically and on-demand. They also want to efficiently integrate with cloud providers through open and programmable Application Program Interfaces (APIs) to enable hybrid cloud/cellular slice adoption. NEVs and other suppliers (e.g., Amdocs, Netcracker, etc.) offer solutions enabling CSPs to create fully automated and programmatic slicing capability over access, transport, and core network domains,” Alusha concludes.

These findings are from ABI Research’s 5G Network Slicing and Cloud Packet Core market data report. This report is part of the company’s 5G Core & Edge Networks research service, which includes research, data, and analyst insights. Market Data spreadsheets comprise deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.