The Dilemma of Choosing right Approach towards 5G-MEC for Telcos!

With growing availability of 5G networks across globe, the focus is now shifting towards differentiation and revenues, Telcos across globe are pondering on next big question- how to execute Multi-Edge Access Computing (MEC) with 5G and would that be a viable strategy?

We believe it’s indeed a great strategic choice to adopt MEC/Edge with 5G and there are several major reasons for that.

1. MEC has immense potential to drive B2B and B2C business further. Until now, due to lack of MEC/Edge (or limited scope of including that in existing architectures) in the network, telcos primarily focused on B2C markets with speed as primary benchmark of the network. The B2B/Enterprise market offered limited revenue options as connectivity providers by providing indoor coverage with subscription plans.
2. With arrival of MEC or Edge stack in 5G architecture, telcos can not only drive the speeds to consumers further, but overall quality of experience of services offered, by brining Compute/Network/Storage/Application closer to both B2B and B2C segments. This is incredibly significant evolution of existing mobile architectures, creating new revenue potentials and allowing telcos to move up the ladder from being just connectivity providers.
3. As telcos now can think of bringing entire Edge Stack, composed by App to Hardware to Connectivity, all in together, there’s significant opportunity to build new applications catering to B2B and B2C segments driving new use cases. This could require telco to verticalize their organization to considerable extent, focusing on different industry verticals to drive these opportunities further but even they start with existing engagements with enterprises, which could be a great start as well.
4. Potentially, if you bring entire stack closer to subscribers, it’s imperative that, it will not only drive download/upload speeds further, but bring down network latencies to significant extent, opening opportunities where latency has been considered as critical criteria to deploy a network. This could mean all mission critical services, transport, AR/VR and even Gaming use cases are now possible to deliver by telcos from the same Edge stack.
5. Another key advantage of adopting MEC/Edge is reduced ‘Data Governance & Security’ concerns as data doesn’t travel beyond private spaces in many places. With growing demand on ecosystem to adhere to stringent data privacy and security norms, MEC comes handy allowing Telcos to tap the opportunity further. Moreover, as MEC offers opportunities of local data processing and storage, cost of data travelling on network reduced significantly, reducing the network bandwidth and usage costs for enterprises.
6. In the end, 5G/Edge is built on Cloud-Native principles, allowing network functions, to Edge applications co-exist on COTS servers as microservices applications. It would not only improve the network capacity (allowing to cater services to large population with auto-scaling principles) but also network resiliency and reliability further, compared to previous generations of the networks or any other network for that matter. This could prove very essential in some B2B segment segments, where apart from network speeds, latencies, reliability of the wireless network is extremely critical, and no downtime is affordable.

It brings down another question and you may be wondering, despite many such advantages offered by MEC/Edge, why Telcos must think strategically to adopt?

There are quite a few reasons, on why Telcos going slow on adoption, and it would vary from some of the below:

1. Cost. or Clear ROI could be primary reason for many of them. Considering significant investments in 5G Spectrum, Network Gears, and ecosystem, adopting Edge/MEC would mean another investment to build Edge DCs by themselves or in partnership.
2. From ROI perspective, choosing the appropriate use cases is extremely critical step, and many telcos are targeting industries who would be looking to upgrade their existing networks to better one, along with local data processing and decision-making opportunities driving adoption of AI/Analytics workloads.
3. Assume a telco decides to adopt the MEC/Edge, it would require building partnerships to drive the revenues home, which isn’t easy, esp. Telcos were never partners friendly (except to those who are on their list of approved vendors in network services). The partnership model is the most crucial step and a challenge both for telcos to adopt and if they don’t build partnerships, delivering Edge/MEC based Use case, alone won’t going to happen.
4. Another significant issue with telco is skills/expertise they possess. Telcos don’t understand Cloud-Native, nor partnerships model or Cloud nor Application Ecosystem space very well. It’s the space, where Public Cloud providers (& CNCF) have been a dominant force for past few years. How do they adopt to new skills required for 5G/MEC is crucial to see and we could see there’s significant challenge with current telco workforce, who are adopting hastily to modern technologies?
   1. To address the challenge, you could see, there’s growing trend among large telcos to partner with CNCF or Public Cloud Vendors to build 5G networks. We have yet to see this model a success as it brings lot of other challenges of Telcos including role of Cloud Providers and despite partnership, moving away from bring just Connectivity providers isn’t going to be possible for Telcos. In fact, we see, Cloud providers could grab a huge share of MEC/Edge space in long run, driving entire App to hardware revenues for them, thereby limiting telcos to just offering connectivity services.
   2. There are some advantages with Public Cloud providers, who have proven partnerships with ecosystem including App ISVs and many telcos, seeing the value of partnership with these cloud providers in that space.

Adopting Edge or MEC won’t be easy for telcos and there’s another crucial reason for that. The definition of Edge interpreted and executed differently by ecosystem players, and it really depends on who you partner with and how the partner sees Edge.

As you could see, except telcos, no one else recognizes Multi-Access Edge or MEC and for others it’s either Edge or Cloud. Moreover, Edge can go independent of Telcos, and anyone can reach end consumers by bypassing telcos from Edge ecosystem and build Edge for them. There are several examples of such partnerships currently exists in the market.

Another network opportunity which is linked to MEC/Edge esp. from telco perspective is Private 5G Networks. It’s for B2B market verticals and telco competes to P5G ecosystem to remain competitive in this segment as there are various models of partnership emerging, right from P5G Service providers with dedicate spectrum to P5G Integrator using CBRS Spectrum and building Private 5G Networks without telcos participating in the builds.

Until now many of them saw P5G is quite significant from just reliable connectivity per se but lot of these p5G consumers/integrators now willing to do storage and process data locally, opening opportunities further for combing MEC/Edge with P5G. Having said that, telcos do have certain advantages to be a P5G Service provider and build those networks, and growing trend indicates the hybrid model (private + telco) emerging as quite popular these days but in many NA and Europe regions, there are small independent players bidding for 5G Spectrum and emerging significant competition to telcos.

As telco, if you are adopting Edge/MEC, you should be complying the network architecture to 3GPP. MEC is ETSI specs, not part of 3GPP specifications, and many telcos adopting non-ETSI based Edge solutions (such as Public Cloud Provider Edge Solutions or MTDC provider’s Edge).

Would there be any challenges with that approach?

We believe so, as telcos have never built network without 3GPP or ETSI until now and adopting architecture elements without specs guidelines poses significant risks for Telcos. Telcos need to adopt the solutions which will be either 3GPP or 3GPP/ETSI compliant which would reduce the risk of architecture evolution for them. It could be another reason, many telcos still looking at 3GPP-ETSI compliant MEC Solutions.

Is your MEC/Edge partner advertising their Edge offerings as ETSI-MEC Compliant architecture and if not, would they be complying to that in future, remains the mystery.

We don’t expect many of them would even consider that option, but telcos should be aware of the choices they are making. It adds more confusion among telcos as there are list of choices to make in MEC/Edge ecosystem. It’s quite like O-RAN specifications, which still isn’t part of 3GPP.

But the dilemma doesn’t end here. 3GPP and ETSI both are evolving slowing, and the many of significant network specs about 5G, MEC are due in Rel 18, 19 or by 2022/23 only. This brings significant burden on telcos to respond to market needs and that’s where existing trends including Public Cloud Edges and other solutions growing popularity among Telcos. At 3GPP/ETSI ‘s current release cycle, we don’t see significant MEC Data Centers built out for next 2-3 years at least which by that time could mean a lost opportunities for many Telcos and it’s up to ETSI/3GPP to drive their roadmaps faster.

The race to win ‘Edge’ is long but there’s significant first mover’s advantage here. No Telco can afford to overlook that considering growing burden to drive revenues further. MEC or Edge Computing does offer enormous potential but comes with lots of riddles to solve. It’s complex decision and could impact Telco balance-sheets significantly and one of those many critical steps they need to take to reshape their future further.

(Remarks: All views are independent and not affiliated with any institution/Company. Pls reach out to [email protected] for any questions further)