Now in a post "basic smartphone service" industry, telcos need to move into value added services. Facilitated by telecom networks becoming software-defined, managed by AI, and delivered in 5G and soon 6G air interfaces, the next set of opportunities are around differentiated services and premium networks. What are the associated services and apps. How will telcos manage to bill for these differentiated service levels? This lunchtime session includes an interactive discussion around the topic and will introduce a few startups innovating in this segment.
Silicon Valley, California, Nov 15, 2023/Meeting Recap/ The Telecom Council convened at our host Mayfield Fund’s Palo Alto offices to discuss the potential of network operators to use their 5G networks to offer Differentiated Services to customers, which could offer increased customer value, and thus command an additional fee or revenue stream. Each generation of cellular networks has offered something extra to the users, often content, apps, or services created by third parties on top of the data platforms provided by the carrier. These network were designed in a one-size-fits-all manner, which was starting to constrain some innovation that would require some customizations on the network.
But with 5G, the carriers and major vendors designed the standards to leverage end-to-end digital transformation to enable a more flexible network, where an IoT sensor could be connected as effectively as a smartphone or streaming camera. So what additional features, or differentiated services can networks provide with 5G? Well, I’ll provide a list at the end of this article.
Our meeting included several startups with specific ideas and solutions to leverage the 5G platform, and upsell corporate customers on higher levels of service, tighter SLAs, lower latencies, bigger data flows, more security, or other things that a 4G network cannot provide as flexibly. We also had a group discussion where these topics were discussed, and the group pondered the idea of whether the consumers even cared about 5G and DiffServ, or whether they would be fully satisfied with a strong 4G signal. The conclusion was that, not only is there something to offer to enterprise customers, but consumers can be attracted to low-latency for gaming, IoT products that are connected and provisioned easily out of the box, 5G FWA, prosumer work-from-anywhere higher SLAs, and dual network redundancy services. There seems to be a lot that 5G can offer to drive additional revenues. Now, the carrier challenge is to be agile, offer it quickly, and capitalize on their investment.
Here's a list of some sample 5G network Differentiated Services that offer value:
Network Slicing:
Network slicing is a concept in 5G that allows the creation of multiple virtual networks on a shared physical infrastructure. Each slice can be tailored to specific use cases, such as enhanced mobile broadband, massive IoT (Internet of Things), or ultra-reliable low latency communications (URLLC).
Revenue Generation: Telcos can offer specialized slices to enterprises and industries with unique requirements, such as automotive, manufacturing, healthcare, or smart cities.
Quality of Service (QoS):
QoS mechanisms in 5G enable the prioritization of different types of traffic based on factors like latency, throughput, and reliability.
Revenue Generation: Telcos can offer premium QoS packages to businesses and consumers for applications that require low latency or high bandwidth, such as augmented reality/virtual reality (AR/VR) experiences, gaming, or mission-critical enterprise applications.
Edge Computing:
Edge computing brings computing resources closer to the end-users, reducing latency and improving the performance of applications.
Revenue Generation: Telecom operators can provide edge computing services to businesses, enabling them to run applications with low latency requirements at the edge of the network.
IoT Connectivity Services:
With 5G, there's a significant focus on supporting massive IoT deployments with improved connectivity and energy efficiency.
Revenue Generation: Telcos can offer IoT connectivity services for smart homes, smart cities, and industrial IoT applications, catering to the growing demand for connected devices. eSIMs and 5G lowers the network’s cost-per-connection so that a host of new IoT solutions can make their economics work.
Network Function Virtualization (NFV):
NFV and SDN enable the virtualization of network functions and the dynamic allocation of network resources.
Revenue Generation: Telcos can offer on-demand network services, allowing customers to scale resources based on their needs, leading to more flexible and cost-effective solutions. New customized network functions can be added for enterprise customers, designed by the telco or the customer.
Thank you to Mayfield for hosting and to all our speakers and attendees that contributed to the lively discussion. Presentations from this meeting are available to members in the Library.