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Everyone knows service providers can and will successfully execute their 5G network builds once committed, what they really need to nail down are their underlying support systems to support new billing, charging and revenue management models, that in turn support multiple new business models.
Monetization in need of fundamental rethink
Sponsored by: Oracle Communications
Any true explorer knows the feeling. At the beginning of every adventure is the exhilaration of setting sail (metaphorically) followed by the fraught decision to fully commit when reaching that point of no return. As French author André Gide said, “Man cannot discover new oceans unless he has the courage to leave the shore.” Having set sail on the great adventure of 5G, communications service providers (CSPs) are nearing the point of no return in their attempt to discover new blue oceans. They must decide. What if the blue ocean is not there? What if it is and when they find it, someone else has beaten them to it? It has happened before. Perhaps the most painful lesson from CSPs’ last great adventure into 4G, was that although successful at opening new lands of opportunity and changing the way the world communicates, operators let much of the milk and honey flow not to their own coffers but to the coffers of those running services over the top of their networks. CSPs made the investment. They executed magnificently. They delivered on their promise. But they did not ultimately monetize 4G to the maximum extent. As operators untether themselves for the final push into 5G they do not want to experience a déjà vu.
One way to ensure they do not is to give their monetization strategies a fundamental rethink. Everyone knows service providers can and will successfully execute their 5G network builds once committed. What they really need to nail down, to be successful, are their underlying support systems to support new models for billing, charging and revenue management that in turn support multiple new business models.
Edge computing, for example, is shaping up to be one of those promising blue ocean markets enabled by 5G through which CSPs can move up the value chain. But already cloud providers are positioning themselves to lay claim to the most lucrative part of what will be partner-delivered edge services: the applications. Operators will have a hard time making a return on their significant 5G investment if their business model is based on providing increasingly commoditized access and transport services. And it will be a shame if this is the case not because CSPs can’t deliver more lucrative platform services but because they can’t monetize them. Unless operators make the changes necessary to monetize 5G in all its forms—edge computing, slicing, network-as-a-service, ultra-low-latency communications and multiparty services, offering access is what they will be left with.
To monetize 5G, operators need to move from their single-party business models built primarily for consumers to multi-party B2B and B2B2C models. They need to build in the flexibility to support any service for any industry through any business model. CSPs also must be able to build, launch, change and tear down offers quickly. They need to support dynamic pricing and be able to change prices and packages on the fly.
In a session at Digital Transformation World Series in October, speakers discussed the importance of monetizing 5G services and the commercialization challenges for services such as network slicing and NaaS. Dan Warren, Director of Advanced Network Research, Samsung Electronics, said, “Enterprise customers do not care about the various technologies being spliced together – they simply want a service that works and is worth what you’re charging.” Alla Goldner, Chair of the Open Network Automation Platform (ONAP) Use Case Subcommittee, Linux Foundation, expanded on that, saying operators need to be able to charge for network slicing not just by subscription, but also by consumption and the overall service experience, underpinned by the guaranteed services that 5G can deliver. This is easier said than done when delivering industry-specific solutions and enterprise-specific solutions within vertical industries. As Jean Lawrence, Senior Director, Product Marketing at Oracle said, CSPs need the ability to price on far more levers within network slices that can be monetized on multiple different dimensions. These levers include: Lawrence added that a lot of flexibility is required to build offers, including what metrics you rate on and rating on multiple metrics, which allows operators to get creative in building, bundling, evaluating and iterating those offers. “There are so many ways that many different industries will be reimagined and transformed based on 5G. This will result in a lot of opportunities for service providers to partner with folks in these industries to monetize these new business models,” Lawrence said. The following are example of expanding beyond connectivity by offering vertical industries new solutions. They come from former CIO of London Heathrow Airport, Stuart Birrell, who spoke on a masterclass panel at TM Forum’s Digital Transformation World Series in October called How can CSPs help verticals go digital? These and other services were included in a catalyst called The Aviator: Enabling multi-vertical innovation through 5G slicing. The catalyst was championed by AT&T and BT. Oracle Communications contributed service and network orchestration capabilities and, together with partners MYCOM OSI, Wipro, Cango Networks and i2i systems, demonstrated how complex, multi-partner 5G services can be designed and mapped to slice types that can be ordered in a few clicks.
Simplifying what a service or the monetization of a service looks like to the customer does not mean the underlying processes are simple. CSPs need to the ability to assure performance and charge for services at a new scale and speed, one that matches the extreme speed of 5G. And they need to provide the same quality assurances and intent-based delivery not just for smart cities but for all industries and business models.
As an example of the scale and speed demands of the 5G era, Oracle’s Elastic Charging Engine has been architected to support extreme transaction volumes and network grade availability, based on industry leading in-memory grid technology. The ability to monetize 5G services at this scale and higher, the mindset to learn more about what enterprises really need, and the ability to support their business models, will determine whether operators find new blue oceans and thrive or continue to drift.
