5G and Network Data Analytics Function (NWDAF) to Fuel Growth for CSPs in the Digital Economy

23 Mar 2022

Data is the fuel that feeds algorithms and decision-making to drive growth in the digital economy. According to global technology intelligence firm ABI Research, data & analytics services revenue is expected to grow from US$140 million in 2021 to US$6.4 billion in 2026, at a CAGR of 115%.

“Data is becoming a crucial production element, data collection, storage, processing, and an understanding of the economic specifics of data are key strands that provide both challenges and opportunities. With data and analytics key to value creation, CSPs should adopt standards-based analytics functions to drive actionable insights in their operations,” states Don Alusha, Senior Analyst 5G Core & Edge Networks at ABI Research.

Network Data Analytics Function (NWDAF), for example, is an analytics function that provides operational intelligence, streaming, and data collection. Guavus and Sandvine are two vendors, among others, that offer full-featured and vendor-agnostic NWDAF capabilities that enable CSPs to place data and analytics at the heart of their innovation model. Also, NWDAF functionality is a stepping-stone for CSPs to build analytics functions that propel them forward in the digital economy. “In a digital economy where applications and APIs rule supreme, CSPs seek to become data-driven organizations. They should apply analytics at multiple ‘stations’ of the network spanning core, transport, and edge locations,” Alusha advises.

Orange, for example, claims that by the end of its Engage2025 strategic plan, most of its employees will have undergone Data and Artificial Intelligence (AI) awareness training. Every CSP will have a different foundation to build from and a different strategy. However, a common denominator among them is to leverage analytics functions, such as NWDAF, to change the structure of current systems and processes to produce more of what is desirable and less of that which is undesirable. There are challenges, particularly around best practices and obtaining the relevant human capital. But CSPs that rise to these challenges first may well gain a competitive advantage in the market.

CSPs do not seek a one-time attempt at innovation but rather sustainable productivity growth as a source of competitive advantage. With 5G, cloud, and big data analytics, the industry has the external catalysts that can drive new growth and innovation. But CSPs, and the broader industry, must realize that growth will come from combining and rearranging existing (cellular) technologies with big data and analytics solutions. New use cases need to be assessed on business impact and complexity in terms of skills required to deliver them. In addition to having the right tools and analytics functions (e.g., NWDAF), success for CSPs will come from how they use those tools. Orange, Telefonica, Vodafone, and Verizon are among the many CSPs investing to obtain the right know-how.  

If CSPs are to be effective at using 5G big data and analytics, they should pursue a path that aligns with their unique circumstances. “It will not be so much about a 5G data platform and analytics as it will be about establishing the right operational context, for example, a fitting culture where everyone in the company seeks for ways for big data and analytics to enhance operations. At present, CSPs’ investments fall under two categories: one, buy out of the box models that improve execution and results of their product logic and operations; and two, buy analytics functions and big data models that have a positive impact on business results, for example, improve market share, improve revenue and sales, and explore new revenue streams,” Alusha concludes.

These findings are from ABI Research’s 5G Network Analytics and Network Data Analytics Function application analysis report. This report is part of the company’s 5G Core & Edge Networks research service, which includes research, data, and analyst insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific technology.

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