5G(Ex) Wholesale Service Categories and Pricing

Highlights

• 5GEx proposes a classification of 5G wholesale services over multiple-administrative domains
• The wholesale services are orchestrated and traded among infrastructure and service providers, so that end-to-end 5G services can be efficiently orchestrated and provisioned
• A modular pricing framework and candidate pricing schemes for 5G wholesale services. This work is to be extended taking into account price dynamicity and 5G verticals  ecosystem aspects.

Introduction

5G integrates connectivity and managed services with cloud and Internet of Things, (virtual) network functions, applications and Slice and Anything as a Service offerings in an all-IP ubiquitous-access service model. This requires in addition to the technical network transformation a radical revisit of the business models: Moving from the traditional single-provider service model to a partly collaborative where infrastructure is opened to the competition with quality as a major value creation driver is a big challenge for network operators. There is a trade-off between the new opportunities and value to be acquired from the new services and the risk of becoming a low-margin replaceable stakeholder in a multi-stakeholder service value chain. Multiple Network (including 5G radio access), Cloud and Online Service Providers constitute the multi-actor value chain of 5G services.
5GEx is an open multi-operator exchange framework enabling Cloud and Network Service Providers to trade, orchestrate and manage services on the fly, so as to meet end user demand for 5G services. Specifying the 5G wholesale services and their respective pricing schemes is of high value for both 5GEx and 5G. The 5G wholesale services are the foundation of 5G high-level services and verticals by composing lower-level 5GEx fundamental services that are dynamically orchestrated and managed over standard interfaces, also ensuring that 5GEx works over multiple administrative and technology network and cloud domains.

5G Wholesale Service Categories

There are many classifications of 5G services; our novelty is that we focus on the wholesale services needed to support the end-to-end services mentioned. We identify three families of 5G wholesale services:

  • Connectivity, supporting rich communication, VPN, content streaming and broadcast services. Connectivity services are classified as Core Assured Service Quality (ASQ) services, which constitute the communication backbone of connectivity among 5G network providers, and Value Added Connectivity Services (VACS) targeting the needs of specific services and enterprise customers, including Online Service Providers.
  • Virtual Network Function as a Service (VNFaaS) enabling specific service features and functions such as caching for a content distribution service.
  • Slice as a Service, a managed set of Connectivity and VNFaaS services, additionally providing to the customer full control and management access to the virtual infrastructure and service elements, thus supporting the most demanding verticals such as industrial automation and remote control.

The envisioned hierarchy of sample 5GEx resources and services of the three categories, as well as their potential monetization, is depicted below.

fig1_wholesale

Fig.1. Hierarchy of sample 5GEx resources and services

Lower-level resources are the low-margin commodity building blocks of differentiated higher-level services.  Virtual resources and Network Functions are composed into slices and infrastructure services, such as assured quality connectivity services (ASQ) enabling custom Value-Added Connectivity Services (VACS) for the support of verticals such as rich communication and media. This is similar to the cloud in terms of layered service provisioning and value proposition: The 5G wholesale service layers are similar to the cloud layers from e.g. low-layer Amazon’s S3 and EC2 to the AWS CloudFront high-level streaming service. The higher the service layer is, the higher are the technical complexity, the customer value and monetization potential for that service.

5G and Internet services pertain to two different layers and corresponding markets with different stakeholders and business relationships: The Core Assured Service Quality Services (ASQ paths, ASQ traffic exchange), which are set up and traded among NSPs, over a multi-operator backbone network supporting 5G/Internet. The Value Added Connectivity Services (VACS) are instantiated on top, supporting on-demand and real-time end-to-end quality management of the end-user connectivity, by coordinating the policy control and enforcement at the service nodes of the network providers that serve the end-points that take part in the VACS. By these policies, the VACS traffic is steered onto the Assured Service Quality (ASQ) paths for carrying the traffic across network domains. This separation has also been accepted by multiple 5G and Internet related initiatives in the communities, such as [NW].

A detailed service catalogue is under way in 5GEx. Sample services include Core ASQ Connectivity Infrastructure services (NSP-to-NSP), Core ASQ Path Information services (NSP-to-NSP), Enterprise ASQ Connectivity Infrastructure services (NSP-to-Enterprise), Value Added Connectivity Session (VACS) services, ASQ Connectivity Supporting Information services, Telco Cloud Infrastructure services and Virtual Network Function services. A detailed presentation of these services is to be provided as future information capsule.

Pricing

5G multi-provider service orchestration calls for pricing schemes should be able to work both in an independent and combined fashion under all the service models in a multi-provider context, without complex accounting and billing. For instance, a VNF forwarding graph translated to multiple links, VMs, connectivity services and VNFs will result in a total charge that will be the sum of the individual service elements composing the service. Each such element (VNF, connectivity service) will be priced according to the schemes specified below. Modularity and layering of the pricing schemes is needed for a generic and functional pricing framework.

Connectivity

The connectivity pricing proposals take as a starting point the general concept of Sending Party Network Pays (SPNP), widely used in other contexts such as the postal service. SPNP specifies that the sending party of the traffic should compensate for the assured quality provided for the respective services traffic. SPNP is applicable at the wholesale core connectivity services, enabling two networks to exchange assured quality traffic over Assured Service Quality paths (ASQs) towards specific regions according to agreed SLAs.

fig2_wholesale

Fig. 2.  The Sending Party Network Pays principle.

SPNP applies between NSPs. NSP offerings to the Application Service Provider is a different issue, depending on the service type and should not be confused with the end-customer application service. We foresee for 5GEx the following two schemes:

(I) Nominal capacity-based SPNP, where the charge equals the requested nominal capacity C times the unit price p. This is not a usage-based pricing scheme, used in various exchange peering and its major advantage is simplicity, due to the lack of monitoring and metering and thus minimal accounting and billing overhead. The unit price p is expected to be region-dependent and also reflecting the quality assurance requested.

(II) 95th percentile-based SPNP, which is similar to the previous scheme but instead of the nominal capacity, the value of the 95th percentile is used to compute the total charge. This scheme the traffic to be metered, typically over 5-min intervals to compute the 95th percentile. The 95th percentile is the industry de-facto transit pricing and provides incentives for efficient network usage since it penalizes traffic peaks and incentivizes traffic shaping when possible, increasing the network infrastructure multiplexing gains.

Our SPNP-based pricing proposals may be differentiated in terms of quality parameters such as delay, time duration, bandwidth, jitter, packet loss, and availability. Especially availability is considered to be extremely important in order to be able to offer connectivity services that are robust, fault-tolerant and carry sensitive 5G traffic such as signaling. Different values of the availability parameter are expected to correspond to different unary prices for the proposed pricing schemes.

For multi-provider VPN and VACS services, the IPNP layer becomes relevant: For instance in a VPN or a two-way streaming/teleconference service there can be one party paying for the entire service. This means that the IPNP layer will pay for the service and also compensate for the underlying ASQ wholesale SPNP charge. We anticipate VACS services to be mainly instantiated on top of the backbone wholesale (long-lived) ASQ services, thus comprising an additional service-pricing layer. At the application layer there may be additional charging schemes, such as session-based or monthly subscription for a video streaming service.

Virtual Network Functions as a Service (VNFaaS)

We propose pricing schemes for VNFaaS, inspired by Software as a Service pricing for popular software ranging from desktop applications to elementary cloud functions such as AWS Lambdas:

(I) Pay per time duration per VNF instance: Customer is priced a unary price p times the (up to a fixed) n number of instances times a pre-specified amount of time t.

(II) Pay per request and execution time duration: This is the scheme also used for AWS Lambdas, computed as the sum of the Request charge and Compute charge, where the Request charge is the number of function requests r times the unary price and the Compute charge is specified as the VNF execution time t times the respective unit price.

Piecewise functions over multiple ranges of number of instances and time durations are relevant here and proven to be profitable by means of simulations.

Slice as a Service (SlaaS)

The multi-domain service setup in 5GEx, especially for non-commodity connectivity resources and services, entails a significant amount of signaling, orchestration and business coordination process and can potentially involve the reservation of a significant amount of resources. It is thus proposed that for the pricing of connectivity services and slices when usage-based pricing schemes are applied, they are combined with an initial service set up cost, while the respective charge for the included resources and services is defined elsewhere in this capsule.

Resources

Pricing of storage and compute resources is expected to be according to the current cloud market status quo where a predefined ontology of virtual compute and storage nodes of standard types are offered for a price for a given amount of time typically under a piece-wise constant pricing scheme: There are multiple quantity levels with a different unary price, which may also depend on the physical location of the resources, reflecting the different resource costs and availabilities over different regions.

Next steps

A detailed presentation of the 5GEx wholesale service catalogue is to be provided. Elaborating on the VACS layer, taken into account the 5G verticals and the respective service and ecosystem peculiarities in on-going work. Price dynamicity is an additional important factor that needs to be considered in the following ways: Pricing schemes where prices are set dynamically according to multiple factors (e.g., utilization) or create markets that can generate the values of the parameters of the pricing schemes. Examples of the latter include negotiation frameworks (or spot markets) where a unary price for a certain resource or service is the outcome of negotiation. These issues are not addressed here but they have been considered in the specification of the pricing schemes and will be provided in the future as a complementary information capsule.

Related material

A complete description of 5GEx service categories and the proposed pricing schemes and formulae can be found in 5GEx deliverable 2.1 [D2.1].

References

[NW] NetWorld2020 Whitepaper on Service Level Awareness, http://networld2020.eu/sria-and-whitepapers/

[D2.1] 5GEx Deliverable 2.1, “5GEx Initial System Requirements and Architecture”, 2016.