Network Slicing Market Statistics: 2027
The global network slicing market size was valued at $172.56 million in 2019 and is projected to reach $921.02 million by 2027, registering a CAGR of 23.7% from 2020 to 2027. Network slicing is a process of creating multiple unique virtualized and logical networks over a common multi-domain infrastructure. With the use of network functions virtualization (NFV), software-defined networking (SDN), orchestration, automation, and analytics, mobile network operators can quickly create network slices to support a specific application, set of users, service, or network. The use of network slicing enables a single network to offer various services based on the requirements of the user as well as various use cases. Also, it helps network operators to reduce operating expenses (OPEX) and capital expenditure (CAPEX) along with the improved operational efficiency and time to market for the delivery of network services.
On the basis of component, the solution segment exhibited the highest growth in the network slicing market in 2019 and is expected to maintain its dominance in the upcoming years, due to the increase in adoption of network slicing solutions by communication service providers to significantly accelerate the time for delivering new applications and services. In addition, the market players are introducing advanced network slicing solutions to serve various needs of their customers. However, the services segment is expected to witness the highest growth, due to extensive adoption of deployment and integration services among end-users, as it ensures the effective functioning of network slicing solution throughout the process.
By end-user, the global network slicing market share was dominated by the telecom operators segment in 2019 and is expected to maintain its dominance in the upcoming years, due to the increasing demand for better speed as well as bandwidth connectivity to serve customer needs. In addition, the leading telecom operators across the globe are actively partnering with network solution providers to test the network slicing technology capabilities. However, the enterprise segment is expected to witness the highest growth, owing to the demand for robust network solutions to enhance productivity among enterprises.
North America dominates the network slicing market, as the region is early adopter of 5G services in areas such as autonomous driving, augmented reality (AR), virtual reality (VR), and artificial intelligence (AI). In addition to this, government initiatives for the development of 5G telecom infrastructure in the region are significantly fueling the growth of the market. For instance, in February 2019, the Federal Communication Commission (FCC) announced a strategy to facilitate 5G technology in America. This strategy included key components upgrading the existing telecom network infrastructure, forwarding more spectrum into the market, and modernizing the outdated regulations and laws. However, Asia-Pacific is expected to observe the highest growth rate during the forecast period, owing to the extensive adoption of mobile devices across developing countries such as China and India.
The report focuses on the growth prospects, restraints, and network slicing market analysis. The study provides Porter’s five forces analysis of the network slicing industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, the threat of new entrants, the threat of substitutes, and bargaining power of buyers on the network slicing market trends.
The network slicing market is segmented on the basis of component, type, application, end-user, industry vertical, and region. On the basis of component, it is categorized into solution and services. Depending on end-user, it is divided into telecom operators and enterprises. On the basis of industry vertical, it is categorized into manufacturing, healthcare, automotive, media & entertainment, transport & logistic, BFSI, government and others. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
COVID Impact Analysis
The COVID-19 pandemic has significantly pushed demands for broadband services with the help of growing mobile networking and remote access services in several industries such as retail, telecom, IT, and healthcare. As businesses around the globe have started to reopen, communications service providers are shifting their focus to 5G rollouts, and are accelerating investments in network slicing. In addition, COVID-19 has driven the demand for 5G use cases such as remote office, telemedicine, remote education, and robotics, which further boost the growth of the network slicing market. In addition, the market players have introduced innovative network slicing products during the pandemic to ensure better network slicing services. This factor drives market growth. For instance, in October 2020, Nokia announced the solution to offer automation of 4G & 5G network slicing across all network domains, including RAN, core, and transport. It has introduced new network management, orchestration, and controller capabilities to its solution, enabling mobile operators to deliver and assure network slicing services.
Network Slicing Market By Component
Top impacting factors
The growth of the global network slicing market is mainly driven by factors such as an increase in demand for next-generation 5G network to enable better speed and bandwidth capabilities; rise in use cases of network slicing for Industry 4.0, and development of smart cities and smart services. In addition, the rise in demand for network performance due to growth in mobile data-traffic volumes fuels demands network slicing. Moreover, the proliferation of software-defined networking (SDN) and network function virtualization (NFV) is projected to drive market growth. However, security concerns associated with network slicing are expected to hamper the market growth to some extent. On the other hand, emerging applications across government, industrial, and enterprises sectors expected to provide lucrative opportunities for the network slicing market growth during the forecast period. Also, the rise in adoption for remote surgery and the autonomous vehicle is anticipated to be opportunistic for the market growth during the network slicing market forecast period.
Increase in demand for next-generation 5G network to enable better speed and bandwidth capabilities
5G has brought better speed and bandwidth capabilities as compared to the previous generation mobile networks. In addition, it has also brought the ability to create isolated virtual networks. The virtual networks can have different design parameters for bandwidth, latency, security, reliability, coverage, and service levels and thus be designed to serve specific solution/application needs optimally over the 5G physical radio and core infrastructure. Network slicing is projected to play a pivotal role in the enablement of 5G. Hence, this factor significantly drives the growth of the network slicing market.
Network Slicing Market By Industry Vertical
The proliferation of software-defined networking (SDN) and network function virtualization (NFV)
SDN and NFV are network virtualization technologies that are moving modern networks to software-based automation. These technologies are leading the digital transformation of network infrastructure across the telecom industry. With NFV, network functions such as load balancing, routing, and firewalls are delivered by virtual machines. While SDN enables network administrators to provide services throughout the network irrespective of the hardware components. Both SDN and NFV provide the ingredients required for network slicing.
In addition, NFV and SDN serving as a basis for network slicing, allowing network slicing to provide agile installations of networks to meet the requests of various services and applications.