Telco industry is focused on overcoming monetization challenges as service providers face reality of complex network environments

This year’s Future Enterprise Networks event brought together major telecoms companies, system integrators (SIs), and vendors offering services related to edge computing and private networks. The event’s presentations, roundtables, panels, and other discussions provided opportunities for decision makers to debate and discuss priorities that the community should be considering over the coming year.

• Edge conversations have started to mature – compared to last year where the focus was less driven by hype and how to move initial workloads to the edge. Instead, discussions involved key themes such as different types of edge, which applications would benefit most from running at the edge, and integration with other technologies (5G, IoT, AI) while reducing complexity.
• Service providers are increasingly addressing monetization related challenges when offering edge solutions, often in combination with data analytics and AI-based management. According to Omdia’s latest forecast the global market for professional and managed services at the edge will double from $116 billion in 2023 to $245 billion by 2027, including consulting, integration, network, storage/compute, and security services.
• Private networks have seen less enthusiasm compared to last year as reality has kicked in for most providers, and a more sober view is emerging when it comes to assessing its benefits compared to public networks.
• While private networks provide telcos opportunities to win deals in markets where they do not own a public network, various limitations remain – from spectrum availability to commercial viability for only very large sites, and the need to ensure seamless connectivity when devices move from one network to another.
• Telcos tend to understand the need for a strong partner ecosystem but are still somewhat puzzled when it comes to managing hyperscaler relationships. While some telco executives were positive about ever-closer joint go-to-market initiatives, others agreed that hyperscalers should be kept at arm’s length to safeguard key client relationships. This complex co-opetition situation is not expected to ease anytime soon.

Looking ahead, Omdia expects accelerating growth for edge and private networks related services to provide huge opportunities for all types of service providers from SIs, telcos and hyperscalers to consultancies and specialist vendors. As more providers jump on the bandwagon, competition is likely to heat up further while macroeconomic headwinds are expected to result in a greater focus on cost savings by enterprises, potentially limiting their spending on longer-term digital transformation. 

Nevertheless, the hype around these key technologies has not fully evaporated while enterprise discussions are becoming increasingly monetization and use case focused. Service providers need to embrace this new reality and focus their solutions and messaging more on solving specific business issues rather than showcasing the latest technologies. Solutions can include any type of private or public network, whether data is processed on-premises, somewhere at the edge, or in the cloud.