New research from the Capgemini Research Institute reveals that nearly half of telco network capacity, about 46%, will be cloud-native within the next 3-5 years. The report, titled “Networks on Cloud: A Clear Advantage,” suggests that telco companies must invest at least $200 million each year in cloud transformation to achieve this transformation. Early adopters are expected to reap the most benefits, including financial, business, and sustainability advantages.
The research highlights technology infrastructure and research and development as the investment priorities for telco cloud transformation over the next five years, with private cloud being the preferred deployment model. The financial benefits of telco cloud make a convincing case for investment, with telcos expecting to optimize their network’s total cost of ownership by 13%, resulting in cost savings of up to $260-380 million per year per operator. Early movers in cloud-based markets could realize an additional $110-210 million in revenue each year.
Telco cloud transformation offers an ecosystem approach that enables new business opportunities. Increased customer lifetime value and improved customer experience are among the top business drivers for companies that have initiated their cloud transformation. Cloud telco transformation also offers the deployment of an Open RAN network architecture, which has the potential to unlock innovation, lower TCO, and uncover new revenue opportunities.
According to the research, the telco cloud transformation is expected to enable the quick rollout of industry-specific use cases for enterprises and end-consumers, especially in the 5G context. These use cases include highly automated smart factories, private 5G networks at distribution centers, ports, oil fields, mines, chemical storage, and processing units, remote surgeries, and AR/VR-enabled remote operations.
Besides business benefits, telcos that undertake cloud transformation expect to reduce their greenhouse gas emissions by 5%, which represents one third of expected overall reduction of networks carbon footprint in the next 3 to 5 years. Telcos are expected to realize sustainability benefits from reduced emissions from facilities, including reduced physical hardware footprint, reduced power usage, auto-scaling of networks on demand, and managing power consumption of mobile towers 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.”
The research highlights technology infrastructure and research and development as the investment priorities for telco cloud transformation over the next five years, with private cloud being the preferred deployment model. The financial benefits of telco cloud make a convincing case for investment, with telcos expecting to optimize their network’s total cost of ownership by 13%, resulting in cost savings of up to $260-380 million per year per operator. Early movers in cloud-based markets could realize an additional $110-210 million in revenue each year.
Telco cloud transformation offers an ecosystem approach that enables new business opportunities. Increased customer lifetime value and improved customer experience are among the top business drivers for companies that have initiated their cloud transformation. Cloud telco transformation also offers the deployment of an Open RAN network architecture, which has the potential to unlock innovation, lower TCO, and uncover new revenue opportunities.
According to the research, the telco cloud transformation is expected to enable the quick rollout of industry-specific use cases for enterprises and end-consumers, especially in the 5G context. These use cases include highly automated smart factories, private 5G networks at distribution centers, ports, oil fields, mines, chemical storage, and processing units, remote surgeries, and AR/VR-enabled remote operations.
Besides business benefits, telcos that undertake cloud transformation expect to reduce their greenhouse gas emissions by 5%, which represents one third of expected overall reduction of networks carbon footprint in the next 3 to 5 years. Telcos are expected to realize sustainability benefits from reduced emissions from facilities, including reduced physical hardware footprint, reduced power usage, auto-scaling of networks on demand, and managing power consumption of mobile towers 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.”
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