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Growth in edge computing could generate new revenue opportunities for operators

Growth in edge computing could generate new revenue opportunities for operators, according to new research.

Critical digital infrastructure and continuity solutions provider Vertiv, together with technology analyst firm Omdia, has released 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? reveals network operators will play a pivotal role in the creation of new revenue services from edge computing.

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.

“The growth at the edge opens opportunities for telecom providers to develop new services related to 5G, IoT and other innovative technologies,” explains Gary Niederpruem, chief strategy and development officer of Vertiv.

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

The Omdia  report also reveals 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.

“Communications service providers (CSPs) 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,” says Julian Bright, senior telecoms analyst, Omdia and author of the research. 

“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.”

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 $1.2 billion in 2018 to $4.3 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 network operators. In a recently published update to a landmark 2019 survey commissioned by Vertiv – 2020: Same Hopes, More Fears – technology analyst firm 451 Research 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,” adds Brian Partridge, vice president, 451 Research. 

“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.”