It remains as-yet unclear how mobile edge computing (MEC) will develop, in terms of which participants in the mobile access and cloud computing industries wind up in leading roles. One might initially think that either mobile operators of the owners of mobile towers would have roles, the big question being whether those participants can have leading roles, and if so, where.
It is too early to say much about how big MEC might be, and where revenue will be generated. At the moment, most of the revenue lies in sales of hardware. Right now, the hardware segment represents about 80 percent of the revenue, namely for purchases of servers, processors, routers, and switchers.
Transparency Market Research predicts the global mobile edge computing (MEC) market will grow at a 51 percent compound annual growth rate between 2017 and 2025 to generate US$4.2 billion by 2025, up from US$74 million in 2016.
In 2016, Europe represented about 44 percent of activity.
So the market is quite nascent, driven by spending on information technology to support the activity. The issue is where opportunity lies, longer term.
These days, the real estate role offers minor opportunities. The edge real estate tends to be owned by the tower firms, so any colocation or hosting revenue will tend to be garnered by the tower companies, not mobile operators.
In the big data center business, telcos generally have withdrawn, at least in the U.S. market, with the large hosting specialists gaining share. The actual computing services are dominated by the likes of Amazon Web Services, Microsoft and others.
It remains to be seen whether an additional platform role can be created or lead by mobile operators, though Verizon connected car services offer a glimpse of what might be possible. The other potential upside, though, could come if mobile operators can package new features of their virtualized networks to create a “MEC platform” that supplies the low-latency response many new MEC apps will require.
Mobile participation in apps and services arguably represents the biggest opportunity outside of supplying connectivity, especially in “native mobile” environments such as transportation or health monitoring industries.
That fits with the thesis that telcos are in a process of transformation from a role primarily based on being the “communication service” provider to a role significantly as “digital service” (apps, platforms) provider. The big change is that revenue increasingly is driven by supplying app and platform value, not just connectivity.
Object tracking services provide one example.
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