Ericsson — in a study with operator BT – has revealed the Capex and Opex related benefits of network slicing for telecom operators.

The network slicing study from Ericsson said when coupled with operational automation, network slicing will be a smart investment to reduce operating expenditures and increase Capex efficiency, while enabling fast implementation and better utilization of devices related to the Internet of Things (IoT).

Incremental revenue generated from new service introduction in the network slicing scenario was 35 percent more than in one big network.

When compared to separate networks, network slicing contributed 15 percent.

When comparing with one big network or separate networks, the potential impact on revenue proved to be the greatest benefit of network slicing, followed by Opex savings.

Shorter service delivery cycles and simplified operations (through automation) mean operators can reduce impacted Opex with network slicing. They also ensure effective design and verification when designing new service types.

However, there is less operational benefit when comparing network slicing and separate networks, as the latter assumes the use of dedicated hardware, as opposed to shared hardware.

Network slicing is Capex neutral compared with other scenarios. Though network slicing is more Capex efficient than other network scenarios as a result of infrastructure efficiency, this benefit is offset by the necessary investment in automation needed to mitigate the resulting additional network complexity.

According to Ericsson Mobility Report, around 18 billion IoT devices are forecast by 2022. Connected IoT devices include connected cars, machines, meters, sensors, point-of-sales terminals, consumer electronics and wearables.

The report said network slicing enables new revenue generation, and lower Opex and greater Capex efficiency, resulting in significantly increased incremental contribution to the bottom line through new service launches.

Opex results are largely coming from the assumption that telecom operators will deploy operational automation when using network slicing, which has not been assumed in the other scenarios.

Network slicing, when cost-effective deployment of operational automation is assumed, is the most economical way of achieving service scalability. The economic benefits are seen even with a small number of service launches.

Network slicing allows operators to segment the network to support particular services and deploy multiple logical networks for different service types over one common infrastructure.  The joint study looked at three ways to introduce new services into a network: via one multi-service network; via individual networks with dedicated resources; or via network slicing including operational automation.

“This study gives us guidance as to where our investments will achieve the best results. The more services we deploy with network slicing, the greater economic benefit we will see, enabling us to better serve our customers,” said Maria Cuevas, head of Mobile Core Networks Research at BT.

The study’s base case was a deployment ramping up to 40 annual service launches over five years. Network slicing resulted in the equivalent of 40 percent reduction in OPEX, 35 percent increase in revenue potential and an overall impact of 150 percent increased economic benefit, under the baseline assumptions made. When scaled up, the gains also increased. All benefits were considered in terms of the core network only.