Drawing from the experience of Lumen, SK Telecom, Telefónica, Verizon and Vodafone, this report identifies the steps, partnerships and expectations of a successful telco edge strategy.
Network edge computing is still nascent
Market demand for network edge computing has been slower than expected and the market was still nascent in 2023: most edge customers (51%) have small (two to three servers) deployments, and 34% are on freemium models. Despite this, we expect deployments to gain momentum in the future, as we already see 24% of edge customers with small deployments across multiple data centres.
Q: To what extent are customers deploying multiple network edge data centres?
Q: To what extent are customers paying for network edge?
Source: STL Partners survey, 100 respondents
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Most telcos have not taken edge deep in their networks yet, typically one node per urban area of 2+ million population
Telco edge nodes are typically located at core network locations serving populations of over 1 million. This is enough to market test and serve existing demand, but it is evident telcos are not yet scaling their edge computing deployments. This is true across different markets – while it’s tempting, for instance, to see Verizon Wavelength deployments to be more successful than Vodafone’s (with 19 nodes in the US in comparison to Vodafone’s 6 across its European footprint), the reality is that this trend is in line with the higher numbers of US urban areas with over 2 million inhabitants.
Deployments completed in collaboration with hyperscalers typically are less deeply distributed than those undertaken by the telcos themselves – in the US Lumen has about the same number of edge computing sites as there are urban areas over 1 million, while Verizon with AWS has less than half the sites, mapping more closely to urban areas that have double the number of inhabitants.
Telcos are yet to scale network edge deployments
Source: citypopulation.de, STL Partners
Table of contents
- Executive summary
- Analysis of lessons from early movers
- SK Telecom
- Conclusions for the industry
- Analysing edge computing M&A trends
- Edge computing market sizing forecast: Third release
- Network edge data centre forecast: The rise of the non-telco