Telecom operators continue to miss the boat when it comes to monetizing the 5G-ed-ness of their 5G networks but remain in a prime position to do so if they can put their inherent advantages to use and work with cloud and edge providers, according to a recent report from ABI Research.

The firm noted operators have so far been unable to tap into broader “consumability” of their 5G networks, “meaning that they continue to miss out on the distributed compute-centric commercialization opportunities within cloud gaming, intelligent transport, manufacturing, and many other rapidly expanding verticals.”

“To access this opportunity, telcos must look to accelerate their usage of distributed compute (utilizing geographically distributed resources to perform compute and storage functions) resources to support network deployment and service delivery by improving customizability, accessibility, and programmability,” Reece Hayden, distributed and edge compute analyst at ABI Research, wrote. “This will enable telcos to deploy applications and services that solve enterprise problems and attract the real value in the market.”

Hayden recommended that operators need to accelerate the deployment of 5G standalone (SA) core and network edge systems to allow them to “climb the value chain” in delivering low-latency/high-availability services to enterprise customers. This will require those operators to deepen partnerships with system integrators (SIs) and hyperscale providers that have the expertise in different parts of the stack and deployment cycle.

“SIs are best placed to profit from this partnership ecosystem as their automation expertise and enterprise experience will be crucial to meeting the complex end-users end-to-end service requirements,” Hayden wrote. “This is especially true with tier-two operators who traditionally lack enterprise relationships, automation/virtualization skills, and the internal structures requires to deploy and manage end-to-end network services.”

Cloud to Boost 5G Edge

Telecom operators also need to cuddle up with hyperscalers and interconnection providers to address edge network deployments. ABI noted financial risks and lack of cloud competencies have kept operators from bolstering their edge footprints.

“These shortcomings provide a substantial opportunity for both interconnection providers and hyperscalers to integrate themselves within the telco digital service distributed compute-centric value chain,” the report states.

It cited firms like Equinix, Megaport, and Console Connect as potential partners in these efforts as they are quickly building out cloud-native networks and edge facilities with multi-cloud/ telco network accessibility.

AT&T, for instance, has linked its edge zone deployments into Equinix’s cross-connect facilities to link AT&T’s data centers to nearby cloud computing services from hyperscalers like Microsoft Azure, Amazon Web Services (AWS), and Google Cloud Platform (GCP).

“From a public network edge perspective, telcos lack the cloud compute skills, while hyperscalers lack infrastructure close to the end-user to support network edge deployment, so a partnership is the obvious way to go and this has been reflected in commercial activity,” Hayden explained. “But when we look at the private network edge, the scale of deployment is far smaller, and it makes sense for hyperscalers to utilize their cloud skills to compete directly with telcos.”

Hayden added that telcos can lean on that infrastructure advantage to “seize these opportunities,” but they must “continue focus on cooperation, rather than competition, if they wish to tap into the high value opportunity that distributed-compute centric telecommunications offer.”