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Edge computing has sparked significant interest from telcos
Edge computing brings cloud capabilities such as data processing and storage closer to the end user, device, or the source of data. There are two main opportunity areas for telcos in edge computing. Firstly, telcos have an opportunity to provide edge computing via edge data centres at sites on the telecoms network – network edge, sometimes referred to as multi-access edge computing. Secondly, telcos can offer edge-enabled services through compute platforms at the customer premises – on-premise edge.
Although there is an opportunity for telcos to offer new services and an enhanced customer experience to their consumer customer base, much of the edge computing opportunity for telcos is in the B2B segment. We have covered the general strategy operators are taking for edge computing in our previous report Telco edge computing: What’s the operator strategy? and through insights on our Edge Hub. Within enterprise, edge offers a chance for operators to move beyond offering connectivity services and extend into the platform and application space.
However, the market is still young; enterprises are still at an early stage of understanding the potential benefits of edge computing. There is limited availability of network edges; telcos are still deploying sites and few have begun to offer mechanisms to access the edge compute infrastructure within them. As a result, developers are only just starting to build applications to leverage this new infrastructure.
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Telcos are still grappling with defining the opportunity. Since adoption is so nascent, many feel that they are not able to prove the commercial case to unlock significant investment. Some operators are pushing ahead by building out edge infrastructure, securing partnerships and launching edge computing services. Nonetheless, even these operators are keeping an open mind to edge and waiting to see what unfolds as the market matures. What is clear is that, with the hyperscalers and others moving into the edge, telcos are increasingly keen to capitalise on the edge opportunity and solidify their position in the market before it’s too late.The sweet spot opportunity for edge is highly dependent on telcos’ starting points: some have existing capabilities within B2B networking and cloud, partnerships, and strong customer relationships. But for other telcos, the B2B business is at a very early stage. Meanwhile, edge infrastructure build differs across telcos, with some choosing to partner with hyperscalers to create the hardware and software stack within edge data centres while others are opting to build their own stack.
It is therefore critical for telcos to:
- Assess whether they can leverage existing B2Bservices, customers and partners versus where they need to invest to fill the gaps
- Understand which factors may affect how successful they are in offering new edgeservices
- Prioritise which servicesthey could offer to B2B customers
In this report, we focus on answering the following questions:
Which B2B services can edge computing add value to? And how ready are telcos to take new edge services to market?
In order to better understand how operators are thinking about edge services and what they are looking to offer today, we interviewed eight technology and strategy leaders working in operators primarily across Europe.
To ensure an open and candid dialogue, we have anonymised their contributions. We would like to take the opportunity to thank those who participated in this research. A summary of the interviewee profiles is provided in the Appendix.
Telcos’ B2B businesses today
As consumer revenues come under increasing pressure, operators are looking to their B2B businesses to provide a new source of revenue growth. The maturity of their B2B businesses today varies from those who have a limited offering focussed primarily on phones, SIMs and basic connectivity (particularly mobile-only telcos, e.g. Three UK), to those who are providing full vertical applications or taking on the role of systems integrator (often incumbents or telcos with fixed networks, e.g. DTAG, Vodafone). Many telcos are looking for opportunities to take on more of the latter role, by expanding their B2B offerings and increasing their foothold in the value chain e.g. by offering managed services. Particularly with the arrival of 5G, they see greater potential to grow revenues through B2B services compared with B2C.
Maturity levels of telcos’ B2B business
Table of content
- Executive Summary
- Strategic principles for B2B telco edge
- Telcos’ B2B businesses today
- Three telco strategies for B2B edge
- On-premise edge and network edge are separate opportunities
- Telcos are open to partnering with the hyperscalers for edge
- Five types of B2B edge services
- Edge-to-cloud networking
- Private edge infrastructure
- Network edge platforms
- Multi-edge and cloud orchestration
- Vertical solutions
- Evaluating the opportunity: How should telcos prioritise?
- It’s not just about technology
- However, significant value creation does not come easy
- Telcos should consider new business models to ensure success
- Next steps for telcos in building B2B edge services
- Prioritise services to monetise edge
- Evaluate the role of partners
- Work closely with customers given that edge is still nascent
- Interviewee overview