Cellcos must embrace MEC now if they want to monetize 5G later: report

Image credit: Rethink Research

Mobile operators need to be chasing MEC (mobile edge compute) as much as they are 5G because many 5G revenues streams will rely on MEC being in place, says a new report from Rethink Research.

According to the report, edge revenues will start slowly next year, but accelerate rapidly and by 2025 – 45% of MNO central offices will also host edge nodes, together with 18% of macro sites and 15% of outdoor micro cells or small cells.

The installed base of indoor small cell/edge node units will have reached over 1.8 million worldwide, up from 36,000 in 2019, a CAGR of 92%. The installed base of central offices with edge nodes will grow at a CAGR of 57%, all of which will happen by 2025. The biggest growth will be in MEC co-located with indoor small cells. These cells will frequently be combined with compute, storage and analytics capabilities to support smart enterprise and smart home services.

The forecast demonstrates that operators who fail to adopt an early strategy for edge will struggle. If some form of MEC is not adopted soon, there is little hope that MNOs will be able to cope with video and IoT data requirements which customers are expecting from the new 5G era, says Caroline Gabriel, report author and research director at Rethink.

“In 2019 just 7% of the world’s Tier 1 and Tier 2 MNOs will be offering retail services which include edge compute capabilities – video caching and interactive advertising being the most common. By 2025, we forecast that 72% will be doing so,” said. Gabriel.

Gabriel added there will be a wide variety of engagement around edge and a lot of potential for partnering, cost sharing and risk sharing for the shrewd operators. She singles out applications which require very low latency, strong levels of security or local control of data, or deep personalization – all of which indicate a preference for MEC architectures.

The report says that many operators will be looking to hitch their wagon to the most successful architecture for MEC, and favorites are already beginning to emerge. Vendors who get misaligned behind the wrong initiatives will struggle.

The report discusses ETSI’s Multi-access Edge Compute (MEC), Cisco’s OpenFog, CORD from the Open Network Foundation, the Facebook-inspired Telecoms Infra Project (TIP) and AT&T’s Akraino open source project and other approaches.

An executive summary of the report is available here.

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