This article was first published in Connect-World North America.
With the rollout of stand-alone 5G, many of the 5G use cases and new business models that the industry has been waiting for will become a reality. At last, the ability for service providers to go ‘beyond connectivity’ will be here.
Unlike 4G where, it could be argued that service providers watched, with perhaps just a little envy, as many of the OTTs took a leading role in the value chain, 5G is different for service providers. The reason: in 5G the network becomes a key component of the service and not just a ‘best effort’ means of delivering connectivity.
5G services will build on connectivity with capabilities such as guaranteed latency and bandwidth, network slices, and edge computing resources to support much more complex use cases and business models. Being able to manage and control these resources can place the service providers centre stage in the 5G value chain.
This is best illustrated by an example. According to a report by Accenture, Gaming: the next super platform (April 2021), the gaming market is worth US$300 billion with 2.7 billion gamers worldwide. One of the fastest-growing sectors in the gaming industry is cloud-based gaming with an increasing number of gamers moving to online games as opposed to physical games consoles.
What if service providers could establish themselves as players in the gaming market? With stand-alone 5G, this opportunity can become reality. Anyone who has ever shared a house with a hard-core online gamer, will have heard shouts of ‘why is the wi-fi so rubbish?’ The enhanced experience that 5G provides offers a solution to this, and it’s one that gamers would pay a premium for.
In 2020, consumer research firm Sapio surveyed over 5,000 gamers and the results showed that 79% would seriously consider switching their existing home broadband and mobile services for a 5G offer that delivered a better gaming experience. What’s more, they’d pay a premium for this improved gaming experience. A staggering 95% said that they’d pay more for the better gaming experience, with 60% saying they’d be happy to pay 50% more.
What’s key here is that the customers, in this case gamers, would pay a premium for the gaming experience - not the connectivity or the games, but the experience. With stand-alone 5G, service providers can set up specific 5G network slices for gaming with a quality of service that delivers the gaming experience that people want as well as enable the next stage in gaming where AR / VR and mixed reality games will be delivered over 5G networks.
So how will 5G gaming offers be packaged, bundled, and sold? Will it
be a B2B2X model where the service provider is the middle B in the
value chain, and they are selling, a gaming offer from, say, Nintendo, as part of a 5G service direct to the consumer. Or will it be the case where the service provider is the first B in the B2B2X value chain and they are selling 5G connectivity on-demand to Nintendo, who sells a 5G gaming offer to the consumer?
This offer could come with a gaming handset, which has an eSIM
associated with it and every time the handset is switched on, the service provider supplies, on-demand, the required 5G connectivity, with guaranteed quality of service on the 5G gaming slice. In this case the service provider bills Nintendo or has a revenue-sharing model. Then there may be in-game purchases that the service provider and /or gaming company wants to offer.
If we think of all the different pricing, network, packaging, ordering,
delivery options for the above 5G gaming scenarios we can see that the traditional approach to service monetisation (charging for GB of data), ordering, delivery, and packaging used for traditional telecoms services won’t work. Then there’s the question of how do you market and upsell gaming offers to existing customers? How do you manage the care process for gaming offers, the retention process, the partnering process as well as customer and partner service level agreement management?
Traditional monetisation systems and BSS will struggle in the new world of 5G, and the example above is just for one 5G use case. The beauty of 5G is that it can enable thousands of use cases covering B2C, B2B and B2B2X and so opens up many, many new opportunities. But that could also be a problem. If service providers try to monetise 5G services and run the order management, care, marketing, and partner management processes using systems that were originally designed for billing and managing voice minutes and GB of data bundles then there could be trouble ahead.
The sheer volume of new offers, new processes, and the number of
variables in these offers and processes, as well as the new business
models enabled by 5G means that a new approach to monetisation and BSS is needed for 5G. It’s not just about adding new functionality to an existing BSS stack or billing system. Stand-alone 5G represents the next level of evolution of telecoms and, as such, needs to be supported by the next stage of evolution in BSS and monetisation.
No-code BSS represents the next stage in the evolution of BSS. In fact,
no-code is currently seen as the hottest topic in the software industry
not just in BSS, but across all applications. It can be viewed as a major
industry milestone. PCs changed how people use software, APIs
changed software connectivity, and the cloud changed the purchase and deployment of software.
No-code will change how people can manage software configuration
by providing a graphical user interface that non-technical people can
use to change rules and processes. Gartner predicts that low-code / no-code will represent 65% of all app development by 2024.
Applying a no-code approach to BSS gives control back to the service
provider. It democratises BSS and lets business users build and
launch new BSS features. Stakeholders from the operator’s core business units of marketing, commerce, business lines, sales, or customer service operations will become the primary user group of BSS.
We will see a new breed of BSS users who are able to quickly design and launch new commercial offerings across channels and segments and experiment with commercial conditions such as customer eligibilities or discounts and promotions. Just as we have seen the emergence of DevOps to ensure continuous integration and continuous deployment (CI/CD) of new software features, we are now starting to see the introduction of BizOps where new business functions and processes can be rolled out by business users.
Democratising the use of BSS and providing no-code systems that can
be used by business teams in a service provider can help reduce the
strain on operators’ IT teams. IT teams are flooded with work and often backlogs and fire-fighting means that strategic projects get pushed out or even cancelled due to lack of resources.
This no-code approach to BSS will provide the level of agility that service providers need to be able to manage and change offers, processes, and business rules in order to compete and win in the 5G economy.
Just as service providers will need to examine their BSS to see if it
provides them with the level of agility that no-code BSS enables, the
question of monetisation needs to be addressed. Data, on its own, is
largely viewed as a commodity by mobile customers. 1GB of data from
service provider X isn’t very different from 1GB of data from service
provider Y. The main difference consumers often see is just the price.
With most 5G services being offered with ‘all you can eat’ data, service
providers need systems that go beyond monetising data usage and
enable monetisation of the experience.
The gaming example mentioned previously is a good example of
monetising the 5G experience. By using a combination of 5G policy (PCF) to guarantee quality of service on a network slice, and 5G charging (CHF) to allocate pricing rules for that service, service providers can monetise the gaming experience. It is this ability to control and monetise the 5G experience that can put service providers centre stage in the 5G value chain.
For B2B2C use cases, service providers can monetise slices provided to specific gaming companies, and even the SLA performance of the slice, through integrations of the CHF with the Network Slice Management Function (NSMF) and the Network Data Analytics Function (NWDAF). As discussed with the advent of 5G, the very nature of the services being monetised is changing dramatically. 5G services will be more complex than 4G services, with more components making up each service. A greater volume of service usage is also expected across all three 5G service families (extreme mobile broadband services, massive machine communication services, and critical machine communication services). As a result, the volume of transactions to be handled by the monetisation platform is expected to be orders of magnitude greater than what is currently handled by legacy systems.
In addition, many 5G services will be delivered in conjunction with
partners and many services will require service providers to extend
beyond their normal connectivity provider role. Both scenarios will place significant new requirements on the revenue management system. Unlike previous “Gs,” no single service is the driving force behind 5G. We know that 5G will feature a plethora of new services, each of which will place different requirements on the monetisation platform.
In summary, the agility and performance offered by no-code BSS and
5G monetisation platforms can put the service provider in control. By
managing and monetising the customer experience they can take their place centre stage in the 5G value chain.
Head of Digital Portfolio PLM, Nokia