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Press Release Category: Internal

STL Partners Forecasts 62% Annual Growth in Private Network Spending, Hitting $21 Billion by 2030

Spending on building, running and maintaining private mobile networks will grow at a compound annual rate of 62% from US$1.2 billion in 2024 to US$21 billion in 2030 worldwide, according to a recent forecast by telecoms research agency STL Partners.

 LONDON, ENGLAND, March 20, 2024 “Enterprises are investing in digital transformation and private networks are seen as important enablers of applications that not only drive productivity and operational efficiency, but fundamentally change the way that operations run,” points out Yesmean Luk, Principal Consultant and Private Networks practice lead.

• Private mobile networks spend to reach US$21 billion by 2030
• Applications to account for over 40% of the value
• 4G will continue to dominate the market until 5G takes its crown in 2028

Growth has been more modest in the last two years, as enterprises needed to be convinced of the return on investment, and the weak macroeconomic outlook did not help. However, things are picking up, and STL Partners expects the three years from 2024 to 2026 to bring more adoption before the market scales up to surpass US$5 billion in 2027.

“The private network market is more than just infrastructure,” explains Ahmed Ali, Senior Analyst. Much of the growth in market value will be driven by the applications layer, which will increase its share from 14% of the total revenue in 2024 to become the biggest part of the value chain, with a 42% share at over US$9 billion in 2030. “This explosive growth will be driven by enterprises utilising their private networks infrastructure more efficiently to run multiple applications and compute-intensive use cases,” continues Ali.

Countries with highly developed industrial sectors are poised to lead the space, with China and the United States projected to command significant shares of the market by 2030, amounting to US$2.4 billion and US$1.8 billion, respectively.

Manufacturing has led the way and will remain the largest spender on private networks for the foreseeable future. In 2024 it will account for almost 50% of the market, but its share will shrink by 2030, as utilities, extractive industries and logistics all see a boom in adoption.

“Despite much talk and hype about 5G in the telecom industry, 4G (LTE) will remain the dominant technology in private mobile networks until 2028, when 5G will take over the pole position,” remarks Luk. This is because for many enterprises 4G is considered sufficient to meet the requirements of most early, tactical use cases, such as reliable connectivity in remote locations. “Still, as more 5G devices come to market, the cost of deployment goes down, and dynamic network slicing and standalone 5G become more widely available, we expect 5G-based deployments to become more widespread among enterprises, including small-to-medium sized companies. Simply put, the barrier to entry will be lower”, concludes Luk.

STL Partners is a leading provider of market analysis and consulting services in private networks. Our research portfolio includes thought leadership reports, market forecasts, deployment database, and use case analysis. More details can be found here: https://stlpartners.com/private-cellular-networks/

STL Partners is a leading, global research and consulting firm that focuses on the telecoms and technology industries. We enable telcos, tech companies, and their partners to make the world run better. More information on our research and services is available at www.stlpartners.com

STL Partners unveils its latest sustainability scorecard update for 2023

STL Partners unveils updated Sustainability Scorecard featuring new criteria and companies: Assessing telecoms & adjacent sectors, promoting cross-industry collaboration, and addressing scope 3 emissions challenges.

 LONDON, ENGLAND, March 22, 2023 — STL Partners, a leading research and consulting firm in the telecoms industry and adjacent markets, has released the latest update to its Sustainability Scorecard. The scorecard provides an independent assessment of the sustainability performance of a selection of companies, including telcos and companies in adjacent industries including tech companies, infrastructure players and streaming companies.

The 2023 update includes 10 new companies, including vendors, and a new criteria for cross-industry collaboration. The scorecard now assesses whether companies are working collaboratively with peers to drive pan-industry change and address the scope 3 emissions challenge.

We added an additional criteria for assessing the sustainability maturity of different companies. We wanted to emphasise the importance of the industry working together to find common solutions to tackle the challenge of sustainability.” said Grace Donnelly, Senior Consultant, STL Partners.

The scorecard benchmarks the performance of companies against eight sustainability-related criteria, including holistic sustainability reporting, sustainability commitments and incentives, public reporting on scope 1, 2 and 3 emissions, green finance, commitment and progress against diversity and inclusion targets, commitment to biodiversity, enablement and collaboration.

The scorecard is designed to support telcos and their partners to benchmark their sustainability performance against competitors, identify areas of relative strength, and identify specific actions they can take to embed sustainability more effectively across their organisations.

STL Partners’ Sustainability practice is committed to sharing best practice, insights and, supporting rationale for the industry to accelerate its transition towards a more sustainable future. The practice provides off the shelf research and bespoke consulting engagements to support the industry’s sustainability agenda.

US$8 billion invested in edge since 2020 – new research from STL Partners

STL Partners’ report reveals nearly US$8 billion invested in edge computing since 2020, with a shift towards mature, scale-up investments and significant growth in later-stage VC funding, marking industry resilience and investor confidence.

LONDON, ENGLAND, January 18, 2024 – STL Partners, a leading analyst firm in technology and market leader in edge computing insights, today released their latest report, “Analysing Edge Computing M&A Trends”. This study provides a detailed analysis of the investment landscape and market evolution in edge computing over the last four years.

Key findings:

• Nearly US$8 billion has been invested in the edge ecosystem since 2020
• Investments have predominantly targeted edge software companies, with US$3 billion invested, followed closely by edge data centre operators with US$2.3 billion
• Venture capital has been the primary investment source, totaling US$4.1 billion over the four-year period
• The edge investments market is maturing. In 2020, 39% of venture capital investments in edge were pre-Series A. By 2023, this number dropped to 20% being pre-Series A
• The two largest disclosed investments in Edge to date were recorded in 2023 – the US$790 million private credit secured by AtlasEdge from investors led by ING Bank and the US$500 million private equity investment by I Squared Capital to establish nLighten

Edge computing investments were resilient to the general cooling in the technology markets that were experienced in 2023. This resilience is a testament to the sector’s unique value proposition and its critical role in the future of digital infrastructure. Our report highlights the robustness of edge computing as an investment area, with a shift towards more mature, scale-up investments. These trends not only signify the growing maturity of the market but also underscore the confidence investors have in the potential of edge technology” said Tilly Gilbert, Director and Edge Practice Lead, STL Partners.

Growth in Later-Stage VC Funding

A significant trend identified in the report is the notable increase in later-stage VC funding within the edge computing sector. This shift marks a maturation in the market, with investors showing confidence in established edge companies. In 2023, the proportion of later-stage investments hit 80%, reflecting a transition from funding early-stage startups to scaling up more mature enterprises. This trend suggests a robust and healthy ecosystem. 

Biggest Investments to Date Recorded in 2023

The report also sheds light on the value and volume of transactions in edge computing over the past four years. While the initial years saw a diverse range of investments with a mix of smaller, speculative bets and larger, strategic investments, the trend shifted noticeably by 2023. The sector began attracting larger, more substantial investments, indicative of growing market confidence and recognition of edge computing’s long-term value. 2023 saw the two largest disclosed deals in the industry, signaling an increasing interest in high-potential edge computing ventures and sending a positive signal for investors as we enter 2024.

About the Report’s Methodology

STL compiled the data set from publicly available information, investor resources and our proprietary edge insights service. Please get in touch if you would like to discuss access to the underlying data.

STL Partners is a leading research and consulting firm that focuses on the telecoms industry and adjacent markets, by supporting telcos and their partners innovate, grow and stay ahead of the competition. STL’s Edge Insights Service provides a combination of tools to support telecoms operators and technology companies in developing their edge computing strategies.

STL Partners to attend MWC Barcelona 2024 and host exclusive roundtable on sustainability in the telecom sector

During MWC 2024, STL Partners and Red Hat will host a key roundtable on “Realising Value from Enterprise Net Zero Ambitions,” focusing on telecom sector sustainability.

LONDON, ENGLAND, January 19, 2024  As the world’s largest and most influential connectivity event, Mobile World Congress (MWC) Barcelona 2024 is set to be a pivotal platform for industry leaders and innovators. Scheduled from February 26 to 29, 2024, at Fira Gran Via, Barcelona, this event promises an unparalleled opportunity for networking, envisioning future technologies, and sharing groundbreaking ideas. MWC Barcelona 2024 will feature an array of themes, including the transformative power of AI, growth strategies for startups, insights into corporate innovation, the art of innovation, and the implications of decentralisation technologies like blockchain.

This year, STL Partners, in partnership with Red Hat, will host an exclusive roundtable centered on the theme of “Realising Value from Enterprise Net Zero Ambitions.” Scheduled for February 27th, from 9:00 AM to 10:30 AM CET at the Eurohotel Gran Via Fira, this invite-only event will offer a unique blend of expert insights and interactive discussions, focused on the intersection of telecommunications and sustainability.

STL Partners and Red Hat’s roundtable will specifically address the burgeoning need for sustainable practices within the telecom sector. The roundtable will delve into critical aspects of sustainability in the telecom industry, exploring how companies can drive green revenues by supporting enterprises in their sustainability efforts. It will leverage STL Partners’ extensive B2B and sustainability research, providing a platform for thought leaders and decision-makers to exchange ideas and strategies.

Key discussion points will include the types of sustainability enablement services that telecom companies can offer, factors impacting enterprise demand for sustainable products and services, and the steps telecom companies should take to tailor their offerings to maximize green revenue potentials.

With limited seats available, the roundtable promises to be an insightful and engaging session for all participants. Interested attendees are encouraged to RSVP as soon as possible to secure a spot at this exclusive event, which includes a complimentary breakfast. MWC Barcelona 2024, with over 88,500 attendees from 202 countries, provides the perfect backdrop for this important discussion.

For more information and to register for the roundtable, please visit STL Partners website.

STL Partners is a leading research and consulting firm that focuses on the telecoms industry and adjacent markets, by supporting telcos and their partners innovate, grow and stay ahead of the competition. STL Partners’ Sustainability practice is committed to sharing best practice, insights and supporting rationale for the industry to accelerate its transition towards a more sustainable future. The practice provides off the shelf research and bespoke consulting engagements to support the industry’s sustainability agenda.

Research Highlights How Changing Approach to Monetisation Can Unlock BSS Transformation and Save Millions Annually

STL Partners, in partnership with MATRIXX Software, releases a new report focused on the impact of transforming revenue management systems

LONDON, ENGLAND, February 20, 2024  STL Partners, a leading analyst firm in technology, today released their latest report, “Why legacy billing restricts telco growth,” commissioned by MATRIXX Software, a global leader in 5G and digital monetisation solutions. The report highlights insights from a recent research programme aimed at understanding CSPs’ current revenue management operations and transformation approach.

“Telcos are investing heavily to make their networks more flexible and agile and seeking to use APIs to unlock network capabilities for third-party developers. However, all of this is useless if they cannot realise value due to limitations with legacy billing systems. A focus on billing consolidation is not enough – there is a need to replicate network improvements in billing and embrace flexible and agile monetisation systems,” said Chris Barraclough, CEO, STL Partners.

Key findings:

• Traditional billing and charging systems, tailored for basic connectivity, are proving inadequate for the fundamentally different business models of 5G services.
• For a typical Tier-1 operator, shedding legacy architecture can unlock an estimated 20% greater efficiency in billing operations and deliver up to $13 million in annual cost savings.
• Embracing transformation enhances operational efficiency and delivers innovative and personalised services.

“We have worked with telcos who have tried, and invested significantly in, IT simplification programs that attempt to consolidate multiple billing streams into a single legacy platform,” said Jennifer Kyriakakis, founder and CMO, MATRIXX Software. “What they realise every time is that legacy platforms struggle to deliver the flexibility and efficiency required to innovate and cannot adapt to new multi-party business models across consumers, enterprises and partners without significant investment and customisation.”

Embracing Transformation for Operational Efficiency

The report highlights that many operators are currently focusing on consolidating legacy billing systems. However, even if legacy systems are reduced in number, the inherent complexity continues to pose challenges and hinder innovation. Overcoming challenges related to customer adoption and payment for new services is crucial for achieving a robust return on investment. Therefore, telcos need to adopt a transformative strategy to revolutionise core processes and achieve greater operational efficiency. The business case for this should be built around cost savings from reducing operating expenses and infrastructure capital expenditure.

Innovative Architectures for 5G Evolution

In addition, operators can enhance efficiency by adopting converged architectures, offering a unified view of customer interactions and reducing maintenance costs. Prioritising low-code/no-code solutions can empower non-IT teams to make changes to products and services without depending on specialised BSS engineers. Embracing open and scalable architectures is essential for quick adaptation to the increasing number of devices associated with 5G and evolving service portfolios.

Download the full report here.

About the Report’s Methodology

STL compiled the insights from an interview programme with senior decision makers in CSPs and a focused survey with individuals from CSPs worldwide. STL also evaluated the financial value through cost savings of transforming billing and charging across telcos’ operations. Please get in touch if you would like to discuss access to the underlying data.

About STL Partners:

STL Partners is a leading research and consulting firm that focuses on the telecoms industry and adjacent markets, by supporting telcos and their partners innovate, grow and stay ahead of the competition.

About MATRIXX Software:

MATRIXX Software delivers a modern converged charging and digital monetisation solution proven at scale. MATRIXX enables commercial innovation and real-time customer experiences that drive revenue and growth opportunities across multiple markets.

Telcos Lag Six Years Behind Hyperscalers in Key Tech Skills, Jeopardizing Future Growth

Telcos are more than six years behind hyperscalers like Microsoft, Google or Meta when it comes to building strategic capabilities in the workforce for success in the future, according to the latest research by technology analyst firm STL Partners.

LONDON, ENGLAND, April 10, 2024 

• Telcos lag behind hyperscalers and similar tech companies in acquiring skills such as AI, innovation and user experience that will help to secure their futures.

• Building key tech capabilities is of strategic importance for telcos to realise their ambitions.

“The ‘telco-to-techco’ ambition is shared by many telecom operators who want to operate and be valued in a similar way to tech giants. To achieve such a challenging transformation, telcos need access to certain critical skills. Our research has identified nine categories of skills, ranging from software, cloud and cyber security to AI and innovation, that prepare telcos to take advantage of the growth opportunities that open, software-based networks will allow in the future.” says Nicola Warren, Senior Analyst, STL Partners

In a sample of 19 telecom operators and nine tech companies from around the world, it was revealed that an average of 14% of the telco jobs were focused on these future skills categories. This compares to 31% for the techcos. Among the telcos in the study, Swisscom, Singtel and Telstra are frontrunners and see the largest share – over 20% – of their workforce in jobs that relate to future capabilities.

Further findings suggest that telcos have extended their focus on future capabilities, with almost all telcos accelerating the acquisition of such skills over a 12-month period. “Software and data analytics roles assumed a higher share of telco recruitment than network roles in the last year. Telcos’ investment in cyber security and automation was also more aggressive than that of techcos in this period. However, automation and user experience investment and acquisition of artificial intelligence expertise is still not strong enough” continues Warren.

“Bringing in the right capabilities, and doing it quickly, is so critical for telcos’ future success that achieving this goal should be elevated to the highest level in the organisations”, observes Marina Koytcheva, research director at STL Partners. “Competition for the best tech talent is fierce in many countries, so telcos need to rapidly upskill their current workforce if they want to be equipped for growth in the future.”

STL Partners is a leading, global research and consulting firm that focuses on the telecoms and technology industries. We enable telcos, tech companies, and their partners to make the world run better. More information on our research and services is available at www.stlpartners.com