Telcos Can Create New Revenue Streams at The Edge

Telcos Can Create New Revenue Streams at The Edge

June 10, 2020

According to the latest Vertiv and Omdia sponsored report, growth at the edge opens opportunities for Telcos to develop new service offerings with over a third of those surveyed believing that network operators will be crucial in creating new revenue streams from the edge.

Vertiv, together with technology analyst firm Omdia, releases a new report on the implications of the shift to edge computing for telecom operators and the best tactics and strategies for capitalising on edge growth.

The report, ‘Telcos and Edge Computing: Opportunity, Threat or Distraction?’ claims that growth in edge computing could generate new revenue opportunities for operators.

Omdia, formerly Ovum, says specifically that mobile and wireline operators can build a platform for the development of edge services while saving massively on costs by combining existing cell tower networks with central offices and aggregation points such as edge data centres.

According to Vertiv Chief Strategy Development Officer Gary Niederpruem, the growth at the edge opens major opportunities for telco networks to develop new services related to 5G, IoT and other innovative technologies.

“Operators will need partners with international reach, as well as a breadth of solutions and services, to support them on their edge journey,” says Niederpruem.

The Omdia report also claims that edge growth should open up new areas of competition, with 36% of those surveyed believing that network operators will be most important in the creation of new revenue services from edge. Application developers (30%) and public cloud providers (25%) are also seen as key edge players.

According to Omdia Senior Telecoms Analyst Julian Bright, communications service providers believe they see a clear opportunity in the emerging edge computing market, but other potential players including public cloud providers and over-the-top (OTT) content players, are equally attracted by the prospect of delivering the edge.

“The size of share that service providers can expect to capture in the market for edge computing will depend on several factors. These include how successfully they can evolve their networks to support edge computing paradigms and avoid becoming mere connectivity providers,” says Bright.

The Omdia report specifically addresses the role prefabricated modular data centres (PFM) will likely play in helping telecoms operators deliver future edge infrastructure, with the PFM market forecast to grow from USD1.2 billion in 2018 to USD4.3 billion in 2023. This projected growth is driven by Telcos and the growth of edge computing, as well as overall growth by cloud service providers, the report highlights.

Alongside rapid deployment, energy efficiency is also a key concern for Telcos. In a recently published update to a landmark 2019 survey commissioned by Vertiv, ‘2020: Same Hopes, More Fears’, technology analyst firm 451 Research Vice President Brian Partridge identified that the energy costs associated with edge and 5G connectivity remain a serious concern for operators.

“Energy consumption is a major concern for 5G network owners as it constitutes between 20-40% of network OPEX.  Analysis conducted by Vertiv estimates 5G will likely increase total network energy consumption of 150-170% by 2026. The industry desperately needs energy efficient 5G solutions, especially for power-hungry tech like MIMO antennas, and data centre specific countermeasures,” says Partridge.

To address these evolving needs, Vertiv is constantly developing new infrastructure, software and services to optimise energy use across the network together with telco partners and customers. The company’s efforts in this area have been recognized by the GSMA through a verified case study of Vertiv’s work with Telefónica, allowing both companies to be shortlisted as finalists for Best Mobile Innovation for Climate Action at the GSMA Global Mobile Awards.

(Ed. For further details on the latest Telco research by Vertiv, click here. Omdia Senior Telecoms Analyst Julian Bright is the author of Telcos and Edge Computing: Opportunity, Threat, or Distraction?

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