Are communications service providers (CSPs) well-placed to seize and monetize new enterprise and consumer edge service opportunities?
On the edge: the challenges facing telcos in delivering new services
Verizon, which is offering MEC and private MEC to enterprises and expanding its fixed wireless access to consumers as well as providing new services such as immersive 5G-based experiences in American football stadiums, is starting to realize both B2B and consumer edge revenues, according to Beth Cohen, SDN Product Strategies, Verizon.
Nonetheless, CSPs face several challenges when it comes to growing new revenues from edge services, according to panelists.
“We really need to separate investments in what telcos have traditionally done … whether it is mass market mobile broadband, or newer areas such as fixed wireless access, and using edge for non-traditional applications and … where [a telco] does not traditionally have core skills,” says Francis Haysom, Principal Analyst, Appledore.
“We still have some way to go in terms of making a clear case for why the telco owns the edge as opposed to … a hyper scalar owning the edge or … a [systems integrator] working directly with a private enterprise owning the edge,” says Haysom.
Haysom also questions whether CSPs’ edge infrastructure build goes far and deep enough to compete with hyperscalers.
“Investment is being done at a level that is not as far-edge as some of the exciting use cases are and the challenge for telcos is that [it] quite often overlaps with where the hyperscalars are,” says Haysom. “Four or five regional data centers [being built by T-Mobile] in Germany isn’t that distinct from Amazon’s presence in Germany.”
When it comes to deploying edge services, enterprises have several choices.
They can do it themselves, says Haysom “which is their traditional model of putting IT in their own in their own data centers or … [they can] put it with the hyper scalars who have become very efficient at delivering very efficient compute and storage, etc.”
“Telcos selling to those enterprises somehow need to sit between [these choices] and make the business case — and it is not a business cases made on low latency,” cautions Haysom.
CSPs should be ready, for example, to demonstrate how they can help enterprises reduce the operational costs of running a data center, or address data sovereignty issues, or the benefits of disaggregating on-site systems and spreading them across the cloud.
They are also in a strong position to offer NaaS Services, which combine, for example, WiFi, 4G and private 5g with slicing capabilities as a bouquet of features that system integrators and B2B customers can easily consume,” says Rolf Eberhardt Head of Orchestration, Communications Technology Group, Hewlett Packard Enterprise
Eberhardt gives the example of CSPs providing NaaS for digital twin deployments, “without all the complexity, without the lock-in without the technical difficulties of having to choose the appropriate connectivity tech.”
Verizon’s Cohen recognizes that work remains to be done on building out a new ecosystem – and notably with hyperscalers.
“The ecosystem is far more complex than a telco building out 5G because we’ve now added the hyper scalars infrastructure as well and … the hyperscalars and telcos don’t traditionally work together very well,” she explains. “We’ve done some work in that area around wavelengths for example, and Microsoft Azure edge, but there’s still work to be done in terms of providing that ecosystem to build out … applications.”
Haysom believes work also needs to be done on ensuring successful iterations of network sliced can be scaled quickly and on demand.
“We need something where we can literally dial up and network slice on demand for a short period, it can be raised it could be it can be torn down, it can be used by an application. We’re not there yet,” says Haysom.
“We don’t have the operational processes or the operational scale in terms of orchestration to support that at the moment, and that that will be a critical thing in terms of telcos taking the value versus somebody else making the value.”