Network edge data centre forecast: Building the base

Our latest iteration of the Network edge data centre forecast shows that deployments are gradually bringing this market to life, despite the first early exits happening in 2024. What impact will 5G SA, data regulation and AI have on development of the network edge landscape? 

This forecast focuses on network edge data centres

Edge computing comprises of a spectrum of locations and technologies that are designed to bring processing power closer to the end-device and source of data, outside of a central data centre or cloud. This report focuses on forecasting capacity at the network edge – i.e., edge computing at edge data centres owned (and usually operated) by telecoms operators. Typically, network edge data centres are deployed at one of three locations in the network: access sites, access aggregation sites, and transport aggregation sites (where the majority of deployments occur).

This forecast models capacity at these sites for non-network workloads. In other words, processing for enterprise or consumer applications.

Spectrum of potential edge computing locations

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The output of the forecast focuses on capacity: Number of edge data centres and servers

STL Partners has always argued that for network edge to take off, developers and enterprises need to see sufficient capacity at the edge to transform their applications to leverage its benefits at scale.

This forecast therefore provides an indication of how this capacity will grow over the next four years, by predicting the number of edge data centres owned by telecoms operators and third parties, and how many servers they plan to fill these up with.

STL Partners forecasts three deployment architecture types at the network edge

The telecoms industry has always been a key part of the buildout of the network edge and pioneered early developments, such as through initiatives like ETSI MEC (multi-access edge computing). However, there are several different scenarios for building out the network edge, all of which are playing out today. This forecast covers all three scenarios for building the network edge, as illustrated in the graph below.

Three scenarios for building the network edge

There are three key factors determining a telco’s approach and timing for its network edge rollout

The number of sites and speed at which a telecoms operator deploys network edge sites is driven by three main factors:

• Factor 1: edge computing strategy
• Factor 2: 5G roadmap (for mobile operators)
• Factor 3: the country’s geographic profile*

Key factors determining network edge build

Table of contents:

• Executive summary
• Introduction to the forecast
• State of the market
• The impact of AI
• Regional deep-dives
• Factors impacting edge build
• Appendix
  • Methodology
  • Detail on three network edge buildout scenarios

Related research:

• Industry survey: Understanding network edge demand
• Network edge data centre forecast: The rise of the non-telco
• Forecasting capacity of network edge computing
• Telco network edge computing: Lessons from early movers

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George Glanville

George Glanville

Research Analyst

George is an analyst at STL Partners, with experience working across a diverse range of topic areas, including 5G, open RAN, telco enablement and gaming. He specialises in consumer services and network innovation, contributing to reports, articles and tools within both of these practice areas. George joined STL Partners after obtaining a BSc in Economics from Bristol University.