Network analytics with NWDAF: A new revenue opportunity for CSPs?

This article was contributed by Nokia, a member company of TM Forum. Communications service providers (CSPs) are starting to use the network data analytics function to drive automation in the 5G network. That will bring internal efficiencies, but could it bring revenue opportunities too? Entrepreneurial CSPs have long sought to monetize the data their operations generate. In recent years, operators like A1 in Austria and O2 in the UK have built successful mobility insights units, creating new revenue streams by providing demographic data to governments and businesses. Now, as 5G makes it possible to connect billions of sensors and devices, the volume of data generated across the network is set to explode – to a mind-blowing 79.4 zettabytes by 2025, according to IDC.

Could NWDAF be the key to monetizing 5G network data?

CSPs are looking to a new 3GPP standard, the network data analytics function (NWDAF), to harness the network-related aspects of that data. Its standardized approach to collecting and analyzing 5G network data will enable CSPs to monitor, manage, automate, and optimize their network operations much more efficiently. So far, so good – but could NWDAF do more than that? In the same way as Amazon turned its internal compute infrastructure into the external revenue juggernaut that is AWS, could CSPs leverage NWDAF to create external revenue opportunities? And if so, where might they lie?

Cloud gaming and Industry 4.0 present opportunities

One potential opportunity is cloud gaming, which requires low and consistent latency for a smooth user experience. If a player sitting in a cafe shoots the in-game character of a player riding on a bus, that interaction has to be instantaneous for both players. If a building in the game world collapses, it has to collapse at exactly the same time for every player. For CSPs, that means using real-time and predictive analytics to ensure network performance meets players’ expectations. And as eSports become more competitive and professionalized, those expectations are increasing – to the point where players may be prepared to pay a premium for a subscription that promises a glitch-free experience driven by real-time network optimization.

While cloud gaming could be a way to monetize network analytics on the consumer side, bigger opportunities are likely to come from the enterprise. Network performance and reliability will be a critical consideration in a huge range of Industry 4.0 use cases, from autonomous vehicles to augmented reality (AR) mediated remote operations.

An inspection drone, for example, will rely on 5G connectivity and low latency not just to livestream video, but also to calculate its position, understand its surroundings, avoid collisions, and receive instructions from a remote operator. Real-time and predictive insight into network performance will be essential to ensuring the drone can operate safely and as expected.

An ecosystem model will deliver the most customer value

Realistically, CSPs will have limited opportunity to sell NWDAF-powered insights as standalone services. The real value to the end-customer will come when those insights are available as part of a wider set of AI and analytics services, targeted at specific use cases or vertical sectors. That will mean forging partnerships with ISVs, systems integrators, IoT platform vendors, and even existing enterprise customers who want to move into smart, connected products. Open APIs such as those certified by TM Forum could also play a role in exposing data and connecting this ecosystem of partners. According to a recent Decoder podcast, for example, AT&T evolved from being John Deere’s internal connectivity supplier to become a go-to-market partner for the tractor manufacturer’s real-time data services. In the case of the inspection drone mentioned earlier, it’s possible to imagine a CSP partnering with providers of other data-driven services to create a bundle that includes real-time collision warnings, adverse weather warnings, and 5G and GPS reliability forecasts. As an integrated suite, this would provide a high level of actionable situational awareness for the drone and its operators.

A $0.9 trillion opportunity to move ‘beyond connectivity’

Whichever route to market CSPs find most appealing, the more insights they can bring to the party, the more value they’ll be able to capture – and the more commanding a position they’ll be able to occupy in the ecosystem. For example, CSPs may see opportunities to combine NWDAF outputs with other internal and external data sources – such as subscriber demographics or mobility data – to create unique and valuable propositions.

Admittedly, it’s very early to be thinking about NWDAF monetization. The CSPs including it in their RFPs today are primarily interested in the potential for network automation. But it’s definitely an opportunity to keep in mind – particularly as Bell Labs Consulting estimates that AI and ML services for 5G-enabled ICT will be worth $0.9 trillion by 2030.

That’s a market segment that has to go somewhere, and as guardians of a vast and mushrooming volume of data, CSPs are better placed than many to capitalize on it. Thinking about the possibilities today, and starting to forge relevant partnerships, will set CSPs in good stead to become more than just connectivity providers for the emerging hyperconnected era.