Enterprise decision-makers are evaluating the optimal deployment models for trial private cellular wireless networks as they plan 5G infrastructure investments. Many CIOs and CTOs at innovative companies and forward-looking public sector organizations are already defining their requirements for fifth-generation (5G) networks.
As 5G rollouts accelerate, network slicing is becoming increasingly important for enterprise use cases. A recent global market study by ABI Research indicates that demand for 5G slicing will be driven mainly by heavy industry verticals.
Industrial manufacturing, cellular vehicle-to-everything (C-V2X), and logistics alone could generate cumulative revenues of roughly $12 billion by 2026, forming a significant portion of an overall 5G slicing market that is expected to surpass $20 billion.
5G network slicing market development
Current discussions about market growth increasingly focus on how industry verticals can simplify the operational complexity associated with 5G network slicing.
Analysts emphasize that 5G slicing is a key enabler for new value creation as communications service providers (CSPs) expand beyond basic connectivity services. In a post-COVID environment, organizations are expected to accelerate edge computing deployments to support low-latency applications, broaden 5G coverage, and reach consensus on how smartphones and other devices will support network slicing.
The telecom sector now recognizes that realizing the full value of network slicing requires changing traditional business approaches and clearly articulating commercial value and business drivers to vertical partners.
There are three primary business drivers for 5G slicing:
- Service introduction with minimal disruption. With 5G slicing, new services can be deployed without extensive reconfiguration of existing networks, improving service agility compared with current architectures.
- Improved network efficiency and potential cost savings. Sharing infrastructure across multiple slices can enhance resource utilization and reduce integration scope and complexity.
- Customized service offerings. 5G slicing allows vertical partners to bring a broader range of services to market backed by tailored service level agreements (SLAs).
ABI Research notes that it will take time for a mature, slice-ready ecosystem to develop. As the global economy recovers and organizations shift from proofs of concept to commercial rollouts, investments are likely to progress from trials to broader deployments.
Widespread use of public 5G networks for private applications will require deeper vertical engagement. Telecom operators should realign commercial models to include strategic partnerships with industry verticals, enabling better-aligned offerings and shared business goals.
Outlook for 5G network slicing applications growth
5G slicing can drive this transformation, but incumbents must first build trust and strong relationships with value-added vertical partners. Doing so will help address industry-specific challenges and identify mutually beneficial commercial arrangements for both telecom providers and industry customers.
Adopting a pragmatic approach is essential. Early deployments are likely to be small and vendor-homogeneous—campus-style implementations where the same vendor supplies the end-to-end solution. Over time, as terminals gain broader support and business models mature, multi-vendor implementations will emerge through deeper alignment on device support and collaboration among system integrators, vendors, and CSPs.
Conclusion
The potential for new revenue from private 5G networks is substantial, but telecom service providers will need to expand and enhance their pre-sales professional services. Prospective customers seeking private 5G deployments require guidance from trusted, qualified advisors throughout planning and deployment. For CSPs and solution providers, this represents a significant opportunity to capture new business by helping enterprises and public sector organizations realize practical, value-driven 5G slicing solutions.
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