As service providers (SPs) continue to invest heavily in rolling out 5G networks around the world, significant technology advancements and changing consumer expectations are emerging. As a result, there have been massive shifts in the way that the 5G economy works, creating an influx of new and booming revenue opportunities.
However, according to Nokia’s Head of Digital Business Udi Israel, legacy monetization systems are putting many SPs at risk of failing to tap into these new opportunities. In order to truly maximize returns on the substantial investments they’ve made, he stated, SPs need to migrate to modern, flexible cloud-native monetization systems in order to keep up with the pace of innovation and to monetize every revenue opportunity of the 5G economy.
Taking a step back, Israel explained that there are four main areas that the 5G economy shift has happened across: user experience, service offerings, the network, and communications technology.
When it comes to user experience, Israel described how the relationship between service provider and consumer has gone from the facilitation of a single transaction to a full-user experience, and further, one that is expected to be “simple, transparent and personal.”
“The Amazon experience is like the holy grail,” he continued, “It’s what consumers are looking for and what service providers need to keep up with.”
One way to do this is to focus on the digital user experience, and more specifically, a digital-first buying experience that allows customers to easily onboard and that offers payment flexibility and accuracy in quotation and billing. Other ways include offering personalized and real-time contextual offers, as well as fully automated and optimized delivery of complex services.
Related to complex services, Israel stated that providers are moving beyond familiar commodity offerings like voice and data to more disruptive offerings around digital services, such as video and entertainment services and financial and lifestyle services.
In addition, both the network itself and the technology running on the network are transforming.
“The network is going from a static network to a dynamic, virtual 5G network, creating new use cases and service offerings at the touch of a button around things like network slicing,” said Israel. “And then you have the technology that underpins that, which has moved from this on-premise, monothetic architecture to a cloud-based, microservices-basedarchitecture.”
All of these shifts mean new revenue opportunities; but those opportunities become meaningless for SPs if they can’t adequately capitalize on them. In order to capture these revenue opportunities, argued Israel, SPs need to upgrade their monetization systems.
“We see this as the missing piece of the puzzle for service providers,” he said, adding that, from Nokia’s perspective, monetization systems in the 5G era need to provide four key capabilities:
1. Support for new revenue opportunities
5G was architected to support high data rates, low latency and massive connectivity required for IoT applications, making it capable of much more than what we are using mobile networks for today. 5G has made a number of new revenue stream possible. When used inside of an enterprise’s facility, for example, it can be an extremely reliable and secure solution to connect critical IoT assets if it is deployed and managed correctly.
Further, as 5G networks evolve, new features like network slicing are on the horizon. In simplest terms, network slicing is a virtual networking architecture that allows for the creation of multiple virtual networks within a shared physical infrastructure, improving throughput and performance for certain applications.
Modern monetization systems, therefore, need to provide SPs with a flexible and dynamic path to monetizing these new 5G services so that they can do things like provide an enterprise customer with a specific slice for services such as IoT, and choose an appropriate pricing structure and SLA, such as one that is dictated by the number of IoT connections and the QoS of the network services provided.
Other potential revenue opportunities include differentiated pricing, B2B2X, flexible product offerings for enterprise and an open partner ecosystem.
2. Enable business agility
Due to the number of new services emerging as a result of 5G, it is critical that SPs be able to create new offers quickly. A modern monetization system can support a faster time to market by enabling more rapid offer creation and even leveraging artificial intelligence (AI) for dynamic pricing and offerings.
“The main limitation of legacy systems,” said Israel, “is around business agility. It used to be that when a SP wanted to create a new offer, it could take days or weeks to do that. What these new, cloud-based systems enable is for SPs to be able to create these offers at the touch of a button without support from the IT department.”
The result is a provider that can better meet new and changing consumer expectations, ultimately making them more competitive in the market.
3. Support for digital practices and expectations
As mentioned previously, consumers are coming to expect a different level of user experience, primary one that is personalized, simple, transparent and fair. Consumers no longer accept the old model of waiting in line at a store or on the phone with a call center when making changes to their mobile service plan. Instead, they are looking for the ability to quickly and easily change plans, see real-time updates on their usage and charges and avoid overcharges.
Modern, real-time monetization systems utilize open APIs that make it easier to use digital channels to provide that digital experience and transparency that consumers have come to expect, as well as payment flexibility, quotation accuracy and transparency models including the ability to change plans retroactively.
Further, using Artificial Intelligence (AI) and analytics, these systems can enable real-time, personalized interactions with consumers.
4. Improved operational efficiency
The 5G economy is expected to bring massive increases in both the number and usage of connections. All links in the chain of delivering quality service — from the network to the IT systems — have to scale in order to meet that demand.
Old methods of scaling linearly and with peak capacity planning, however, are antithetical to the principles of cloud native computing that relies on containerized microservices, which scale in and out independently and efficiently. Even the way these systems are delivered and updated is more efficient using agile, continuous integration and continuous deployment (CI/CD) methodologies that ensure a system is always evolving and most importantly, always on.
Unfortunately for service providers, most of their legacy monetization systems were developed and deployed before these concepts were commonplace, making them unable to benefit from these technological advances.
Therefore, transitioning to a modern system that is built with principals like cloud native computing and continuous integration and deployment in mind is essential to the success of SPs going forward.
Failure to implement an advanced monetizing system that addresses the shift in how cellular networks are being used and what is expected of them means that service providers are leaving the door wide open for players like over-the-top service providers to come in and, using the very networks in which the service providers have invested, secure the new revenue streams themselves.
For Israel, it’s quite simple: “SPs didn’t have much of choice when it came to building out these 5G networks. They need to be able to monetize [the network’s new capabilities] to make the money back that they invested.”