Private multi-access edge computing (MEC) involves deploying dedicated computing and networking resources on a client's premises. It prioritizes ultra-low latency, data security, and customization, making it ideal for industrial automation, smart factories, and applications demanding real-time control and stringent data privacy. This segment of the MEC industry is experiencing significant growth, with providers in North America, Europe, the Middle East, and Asia-Pacific launching commercial offerings and experiencing increased adoption. In the next 5 years, edge computing is poised to revolutionize the way industries operate and consumers live, transform organizational structures, and drive innovation. Private MEC offers telecommunication companies (telcos) a chance to create innovative business-to-business (B2B) services like data monetization through edge-based Internet of Things (IoT), analytics, and artificial intelligence (AI). This high-growth market is driven by the need for real-time data processing and network resilience for businesses.
This study identifies growth opportunities for telcos in the global private MEC sector. It provides a list of potential revenue streams, the telcos’ total addressable market (TAM), and insights into which areas are expected to generate the most revenue. The study also sizes the growth opportunities (ranging from $100 million to over a billion) and analyzes them qualitatively, offering recommendations on how telcos should leverage the changes emerging from this space. The base year for the study is 2023, and the forecast period is from 2024 to 2029.
Revenue Forecast
The revenue estimate for the base year 2023 is $339.1 million, with a CAGR of 64.9% for the study period from 2023 to 2029.
The Impact of the Top 3 Strategic Imperatives on the Private Multi-access Edge Computing Industry
Disruptive Technologies
Why: Mission-critical applications require lower latency than what traditional cellular networks and centralized computing power in remote data centers can offer.
5G technology offers lower latency and higher capacity. Together with multi-access edge computing (MEC), it brings computing power close to customers, enabling new applications and experiences.
Private MEC, with its low latency and data processing power at the network's edge, offers an ideal opportunity for the integration of generative AI.
Frost Perspective: Frost & Sullivan research conducted in Q4 2023 indicates that approximately 20% of enterprises considering edge computing to be their top technology investment priority over the next 12 months. In 2023, most MEC trials used 5G deployments, while the 2019–2022 period saw implementations use 4G.
In the next 5 years, edge computing, in conjunction with 5G connectivity and AI, is expected to revolutionize the way businesses operate and consume services, transform operational processes, and drive innovation.
Innovative Business Models
- Why: MEC and 5G are opportunities for telecommunications companies (telcos) to launch innovative offerings and enable an ecosystem to flourish in the business-to-business (B2B) segment of telecom service providers using the platform.
- Frost Perspective: Private MEC offers telcos a chance to create innovative B2B services like data monetization through edge-based IoT, analytics, and AI. This high-growth market, projected to reach $16–28 billion by 2025, is driven by the need for real-time data processing and network resilience for businesses.
Industry Convergence
Why: Telcos cannot implement and run MEC alone. They must establish partnerships and an application ecosystem to seize growth opportunities in the MEC space.
Telcos have started partnering with cloud providers such as Amazon Web Services (AWS), Microsoft Azure (MS Azure), Google Cloud Platform (GCP), and IBM Cloud to boost the ecosystem and propel exponential growth.- Frost Perspective: By partnering with cloud providers, in the next 2 to 3 years, telcos will be able to offer a range of cloud services in the MEC space to capture revenue, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and network-as-a-service (NaaS). This could involve directly providing these services or reselling them from established cloud providers.
Scope of Analysis
- The global private MEC industry evolved quickly in 2023 and the first half of 2024, with more telcos and cloud providers establishing strategic partnerships and commercializing offerings. For instance, in March 2024, Softbank announced a private 5G+MEC offering.
- Enterprises are prioritizing edge computing to reduce network latency, lower operational expenses, process data in real time, and save bandwidth.
- Telcos have been working to simplify their offering, make it more affordable, and drive more adoption of private MEC.
- It excludes revenue from other market participants, such as cloud providers and hardware manufacturers.
- The segmentation into hardware reselling, software, and services provides insight into which areas telcos are expected to generate the most revenue.
- Hardware Reselling: This category includes revenue generated by telcos from the resale of hardware components necessary for private MEC deployments, such as servers, storage devices, networking equipment, and other infrastructure elements.
- Software: This category includes revenue generated by telcos from the provision of software solutions tailored for private MEC environments, including edge computing platforms, management software, and security solutions.
- Services: The services category encompasses revenue generated from various service offerings related to private MEC, including consulting, deployment, integration, support, managed services, and other professional services provided by telcos to assist customers in implementing and managing private MEC solutions.
This space influences growth opportunities in different areas for both consumer and enterprise use cases, where low-latency connectivity requirements are essential for applications and user experience.
Key Private MEC Competitors
These are key telcos providing MEC infrastructure closer to customers, in addition to services and solutions.
- América Móvil
- AT&T
- Bharti Airtel
- Bell Canada
- Bouygues Telecom
- BT Wholesale
- CK Hutchison
- China Mobile
- China Telecom
- China Unicom
- Deutsche Telecom
- Dish Network
- EE
- Etisalat
- KDDI
- KPN
- KT Corp
- LG U+
- MEO Portugal
- NOS Portugal
- NTT DoCoMo
- Orange
- Optus
- PCCW Global
- Proximus
- Reliance Jio
- Rogers
- SFR
- Singtel
- SK Telecom
- Softbank
- Swisscom
- Telefónica
- Telenor
- Telkomsel
- Telia
- Telstra
- Telus
- TIM
- T-Mobile US
- Verizon
- Vodafone
Growth Drivers
The increasing adoption of 5G networks unlocks the full potential of private MEC, as it provides the ideal foundation for real-time applications and secure data transmission at the network edge. This synergy empowers private MEC to deliver on its promise of near-instantaneous processing and control.
Data-driven companies and governments require a significant data stream for real-time analytics.
Growing IoT adoption requires real-time data processing and local analytics, resulting in high demand for private MEC infrastructure.
Edge infrastructure implementation can lower operational expenses (lower traffic in the backhaul and core) and help telcos offer a better customer experience.
Increasing cloud adoption creates fertile ground for private MEC expansion by enabling efficient workload orchestration between the cloud and the edge, cost-effective deployment through cloud-based scalability, enhanced data management and analytics capabilities, and simplified management through standardized cloud-based tools.
Enterprises require network and application resiliency that distributed computing capabilities can achieve.
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the Private Multi-access Edge Computing Industry
Growth Opportunities Fuel the Growth Pipeline Engine™
Scope of Analysis
Scope of Analysis (continued)
Market Definition—Edge Computing and MEC Concepts
Market Definition—Private MEC
Key Private MEC Competitors
Growth Metrics
Growth Environment
Growth Drivers
Growth Restraints
Forecast Assumptions
Revenue Forecast
Revenue Forecast (continued)
Revenue Forecast by Type
Revenue Forecast Analysis
Revenue Forecast Analysis by Type
Revenue Streams for Telcos in Private MEC
Revenue Streams for Telcos in Private MEC (continued)
Revenue Streams for Telcos in Private MEC (continued)
Revenue Streams for Telcos in Private MEC (continued)
Revenue Streams for Telcos in Private MEC (continued)
Revenue Streams for Telcos in Private MEC (continued)
Private MEC Applications Across Industries
Competitive Environment
Competitive Environment (continued)
Competitive Environment (continued)
Competitive Environment (continued)
Cooperation Agreements for MEC Standardization and Interoperability
Growth Opportunity 1: Hardware Reselling as a Revenue Stream
Growth Opportunity 1: Hardware Reselling as a Revenue Stream (continued)
Growth Opportunity 2: Professional Services and the Telco Advantage
Growth Opportunity 2: Professional Services and the Telco Advantage (continued)
Growth Opportunity 3: Enhanced Connectivity
Growth Opportunity 3: Enhanced Connectivity (continued)
Growth Opportunity 4: Software as a Revenue Stream
Growth Opportunity 4: Software as a Revenue Stream (continued)
Growth Opportunity 5: Managed Services as a Revenue Stream
Growth Opportunity 5: Managed Services as a Revenue Stream (continued)
Growth Opportunity 6: Cloud Services as a Revenue Stream
Growth Opportunity 6: Cloud Services as a Revenue Stream (continued)
Growth Opportunity 7: Application Hosting and Management as a Revenue Stream
Growth Opportunity 7: Application Hosting and Management as a Revenue Stream (continued)
Growth Opportunity 8: Value-added Services and the Telco Advantage
Growth Opportunity 8: Value-added Services and the Telco Advantage (continued)
List of Exhibits
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List of Figures- Private MEC for Telcos: Growth Metrics, Global, 2023
- Private MEC for Telcos: Growth Drivers, Global, 2024–2029
- Private MEC for Telcos: Growth Restraints, Global, 2024–2029
- Private MEC for Telcos: Revenue Forecast, Global, 2023–2029
- Private MEC for Telcos: Share of Telcos in the Total Private MEC Market, Revenue Forecast, Global, 2023–2029
- Private MEC for Telcos: Revenue Forecast by Type, Global, 2023–2029
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| Deliverable Type | Market Research |
|---|---|
| Author | Constanza Ingaramo |
| Industries | Information Technology |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | Multi-Access Edge Computing |
| Keyword 2 | Telecommunications |
| Keyword 3 | Private Networks |
| List of Charts and Figures | Private MEC for Telcos: Growth Metrics, Global, 2023~ Private MEC for Telcos: Growth Drivers, Global, 2024–2029~ Private MEC for Telcos: Growth Restraints, Global, 2024–2029~ Private MEC for Telcos: Revenue Forecast, Global, 2023–2029~ Private MEC for Telcos: Share of Telcos in the Total Private MEC Market, Revenue Forecast, Global, 2023–2029~ Private MEC for Telcos: Revenue Forecast by Type, Global, 2023–2029~ |
| Podcast | No |
| WIP Number | KA0C-01-00-00-00 |
Growth Opportunities for Telecommunications Companies in Private Multi-access Edge Computing, 2024 2029
Opportunities Beyond Connectivity and Managed Services Enable New Revenue Streams
31-Jul-2024
Global
Market Research