Are Value-added Services the Key to Operators’ Success in the 5G Market?

November 2022

Telecoms & Connectivity

Sam Barker

VP of Telecoms Market Research

Amid an expected decline in ARPC (Average Revenue per Connection) over the next five years, primarily driven by an industrywide ‘race to the bottom’ in terms of 5G pricing, network operators are looking to value-added services as a means of enhancing revenue streams and the end-user experience. Indeed, the value-added service aspect of 5G can contribute more to revenue generation than their core business of providing the underlying connectivity.
 
The most popular value-added services being explored by operators, as identified in our latest research, include:

AI-based Analytics

 
AI (Artificial Intelligence) can be used in 5G to increase the accuracy of user experience-based network planning to improve agility and add intelligence to solving experience issues.

AI and ML (Machine Learning) will assist wireless operators in deploying, operating and managing 5G networks with the spread of IoT devices. Huawei, for instance, applies AI to each phase of 5G network construction, increasing network planning accuracy and making roll-out more efficient.
 
Juniper Research believes that 5G will also significantly change the future of AI. While 5G enhances the speed and integration of other technologies, AI allows machines and systems to operate with intelligence similar to humans. 5G provides enhanced speeds for cloud services and AI analysis, and learns from the same data faster.

Network Slicing

Network slicing can be defined as a mechanism to create and dynamically manage logical, functionally discrete, end-to-end networks over common physical infrastructure.

Theoretically, operators can offer several networks customised to customer needs to be deployed, managed and retired as required on the same shared hardware. Network slicing adds value to 5G through service agility, flexibility, and customisation, which overall enhances the end-user experience.
 
Network slicing in 5G allows multiple networks to be formed on top of standard physical infrastructure. Each network portion is allocated based on the application's particular requirements, use case or customer. Network slicing in 5G supports services like smart parking meters and driverless cars.
 
Juniper Research believes that network slicing will empower operators to maximise ROI through clever use and management of network resources and provide distinguished services at scale and across a variety of industry verticals.

Scalable Networks

 
The secret to delivering the true potential of 5G in the network infrastructure that sits behind it is to deliver superfast speeds and ultra­low latencies; 5G base stations must be congestion-free.

5G network scalability will ensure that customers' increased demands are met effectively. Businesses risk low ROI when their growth outpaces the network capacity because clients will face disruptions and opt for other platforms.

Virtualisation of Network Functions

 
Virtualisation enables organisations to provide a better customer experience through continuous integration, delivery, and fully automated self-provisioning and self-optimising network functions.

To obtain the benefits of network virtualisation, operators must rethink sourcing models, deployment models and organisational setups - or risk falling behind the growing demand for coverage, capacity and user experience.

Juniper Research believes that with NFV (Network Function Virtualisation), enterprise customers can simplify a wide range of functions, maximise efficiencies and present new revenue-generating services faster.

Additional Network Security Requirements

 
With the scale provided by 5G, the risk of cyberattacks on all networks will increase significantly, especially with the growing network capacity and the unprecedented number of devices that can be attached to these networks.

Traditional security solutions for 3G and 4G will not be suitable for 5G. Additional security requirements can stop the disruption of critical services and the destruction of industrial assets, costing users downtime and revenue, and tarnishing brands.
 
Juniper Research believes additional security measures will be a unique offering that will add value, especially to enterprises on the 5G network.

Related Reading

Our complimentary whitepaper, 5G: Where is the Money?, provides an evaluation of the market outlook for 5G services and how operators can best monetise the growth in 5G-based solutions. It also includes a summary of our latest forecast for total operator-billed 5G revenue in 2023.

"Operator‑billed 5G service revenue will reach $315 billion in 2023; rising from $195 billion in 2022. This represents growth of over 60% in a single year. The research predicts this increase in revenue will be driven by the accelerating migration of cellular subscriptions to 5G networks; owing to operator strategies that minimise or remove any premium over existing 4G subscription offerings. It forecasts that over 600 million new 5G subscriptions will be created next year, despite the anticipated economic downturn in 2023."