Sunday , December 3 2023

Telcos to Invest $1 billion on Cloud Technology to Enhance Connectivity – Report

Telcos are expected to invest $1 billion on average in network cloud transformation to enable a future connected world, a new report has disclosed.

The new research from the Capgemini Research Institute ‘Networks on Cloud: A Clear Advantage’ reports that nearly a half of telco (46%) network capacity will be entirely cloud-native in the next 3-5 years.

To achieve this transformation, telco companies are each predicted to invest at least $200 million per year on average in cloud transformation during the same period. ‘Early adopters’ are expected to reap the most benefits from a financial, business and sustainability perspective.

The report highlights that investment priorities within the next 5 years are focused on technology infrastructure, representing one third of overall telco cloud investment, followed by Research & Development (18%) – this includes making networks moree automated through the support of Artificial Intelligence (AI) and Machine Learning. Private cloud is the preferred cloud deployment model.

Click To Read: Cloud Business Saves Microsoft from PC Slump

According to the research, ‘early adopters’ of cloud-based telco platforms expect to recover almost half (47%) of their investment within this period. The financial benefits from telco cloud make a convincing business case for investment: Telcos are expecting to optimize network Total Cost of Ownership (TCO) by 13%, resulting in cost savings of up to $260 to 380 million per year per operator. They also expect to realize $110 to 210 million per year in additional revenues from attaining early-mover status in markets enabled by cloud-based platforms.

An Ecosystem Approach Via Telco Cloud Will Enable New Business Opportunities

Telco companies that have initiated their cloud transformation over the last 3 to 5 years cite notably increased ‘customer lifetime value’, and improved customer experience amongst the top business drivers. Customer lifetime value can increase as a result of cross-selling and upselling more value-added services to existing customers and increasing loyalty benefits to mitigate attrition.

One of the key opportunities offered by cloud telco transformation is the deployment of an Open RAN network architecture, an ecosystem-based approach that has the potential to unlock innovation, lower TCO, and uncover new revenue opportunities.

According to the research, the telco cloud transformation is expected to also enable quick rollout of some industry-specific use cases for enterprises and end-consumers, especially in the 5G context; for example, highly automated smart factories, private 5G networks at distribution centers, ports, oil fields, mines, chemical storage, and processing units, remote surgeries, Augmented reality/Virtual reality (AR/VR) or Metaverse-enabled remote operations, monitoring, and training.

More Than a Third of Greenhouse Gas Emission Reduction Achieved Through Telco Cloud

The report highlights that besides business benefits, telcos that have undertaken cloud transformation expect to reduce their greenhouse gas (GHG) emissions by 5%, which represents one third of expected overall reduction of networks carbon footprint in the next 3 to 5 years. Owing to their strong preference for private cloud architecture, Telcos are expecting sustainability benefits on emissions from their direct sources (Scope 1 and 26) due to lower emissions from facilities, including reduced physical hardware footprint, reduced power usage, auto-scaling of network on demand, and managing power consumption of mobile towers by using AI and Machine Learning.

“Cloud transformation is a fundamental change in the evolution of the network, that has been dominated by physical devices and infrastructure. It represents a significant change of mindset for Telcos,” said Jacques Assaraf, Global Head of Telco Industry at Capgemini. “Telcos are ideally placed to explore opportunities offered by cloud and federate an ecosystem around themselves to unlock innovative use cases, uncover new sources of revenue, and capture the full value of 5G and connected industries. Early adopters will reap the most benefits in markets enabled by cloud-based platforms, not just financially but also from a business and sustainability perspective.”

About Bukola Olanrewaju

Check Also

Celebrating You 2023, Powered By TD AFRICA Holds December 3rd

Celebrating You 2023, Powered By TD AFRICA Holds December 3rd

TD Africa, the leading distributor of cutting-edge technology and lifestyle products in Sub-Saharan Africa, is …

Leave a Reply

Your email address will not be published. Required fields are marked *