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In the wake of the pandemic, a global surge in broadband network demand has spurred growth in the networking slicing market.

Recognized as a fundamental component of 5G, network slicing is a network architecture that allows slices of a network to be allocated for specific applications to deliver a specific performance. It leverages network functions virtualization (NFV) and software-defined networking (SDN) to create multiple virtual networks on a common physical infrastructure to cater to different scenarios.

Led by 5G forerunners such as China, Japan, and South Korea, Asia Pacific has been projected by the GSMA to become the world’s largest 5G region by 2025. Estimated to grow from $2.13 billion in 2020 to $13.90 billion in 2025, the region will amass 675 million connections to account for more than half of the world’s volume. By then, network slicing will play a key role in supporting many enterprise and industrial use cases.

Through network slicing, operators can assign slices to individual services within a network to meet the varied requirements from customers or use cases. A departure from the traditional one-size-fits-all approach to networks, network slicing as a service allows operators to provide differentiated services at scale, improve network efficiency to reduce both Opex and Capex, and create new revenue opportunities. For instance, operators can leverage on network slicing capabilities to provide slicing at differentiated pricing based on customers’ requirements on bandwidth, latency, security, and type of connection.

Industries to benefit from network slicing

5G is impacting a number of industries that are taking inventive approaches in a digital age. As industries accelerate digitalization, applications of 5G and IoT will lead to a hike in demand for faster connectivity and wider network coverage, as well as virtualization of networks. These are drivers that will boost network slicing as operators tap on the potential of new business models. Within the ecosystem, strategic partnerships forged to advance network slicing will also propel the growth of this market. This will in turn spur progress in new technologies such as artificial intelligence, machine learning, cloudification, and edge computing.

According to Research and Markets, the global 5G network slicing market will reach $4.3 billion by 2026. Of which, Asia-Pacific represents the second largest region after North America. By 2026, global 5G slicing professional services is forecasted to reach $245.8 million.

Viewed as the technical foundation for the future 5G evolution, network slicing can be applied in scenarios such as real-time streaming, supply chain management, and remote monitoring. According to Research Dive, real-time surveillance will be the fastest-growing area, estimated to reach $832 million by 2027.

In Asia, a global manufacturing superpower where manufacturing is critical to the socio-economic development of many economies, network slicing is a fundamental feature in smart factories to enable real-time remote control of factory devices. For instance, O&M can be carried out using augmented reality, with real-time videos of the plant being saved to the cloud, processed and analyzed. Robotics used in plants is another example that requires high bandwidth, low-latency network slicing.

Network slicing will also play an important role in transportation as the automotive industry moves forward with vehicle-to-everything (V2X) for ultra-reliable and ultra-low latency communications between autonomous vehicles on roads. In China, for instance, smart 5G ports rely on network slicing and edge computing to support smart container trucks to replace labor-intensive work with unmanned and intelligent operations.

In the government sector, where reliable and secure data is critical to public safety services, network slicing can be used to support robust and ultra-high security data sharing across departments and agencies to facilitate better responses.

Network slicing is also important in the healthcare sector, especially in this climate, where widespread adoption of telemedicine or remote healthcare services will require lower latency, higher bandwidth, and faster speed. Smart grid and smart agriculture are other areas where network slicing will be deployed.

Accelerated digital transformation, compounded by advances in 5G technologies will add pressure on existing networks and challenge operators to address more exacting demands from industry verticals. As networks become more complex, operators should look into optimizing network management and explore network slicing as an enabler for new value creation. Beyond connectivity revenues, operators are well-positioned to offer flexible, agile and scalable solutions for tomorrow’s industrial applications.

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