Telecom Italia (TIM), the largest telecommunications provider and second largest wireless operator in Italy, has formed a strategic alliance with Google to develop edge-computing services, according to Light Reading.
The telecom will set up a standalone company to manage its data center and cloud services business, which will collaborate with the search giant to develop market-ready initiatives for both consumers and enterprise customers. Neither company has offered significant insight into what those initiatives will look like, but TIM plans to hire 800 cloud engineers and make investments in data centers.
Network operators are developing increasingly capable edge-processing systems to deliver greater value to customers and relieve burdens on their networks. They're looking to support a variety of business use cases like virtual reality, connected and autonomous vehicles, and other advanced applications, such as smart factories and automated warehousing, which rely on low-latency connections.
And while the delay in communicating data over networks is minimal — just a few seconds at most — these advanced applications can't afford such delays. For instance, a smart factory needs its AI systems to be able to detect problems in real-time to stop operations from going awry and causing costly damage, which can happen in the time between transmitting data to cloud processing and commands filtering back to the system. That's why 84% of telecom execs indicated that their companies are currently using or intend to use multiaccess edge-computing (MEC) systems by the time they roll out 5G.
As network operators work to deploy edge-processing systems, they're faced with two approaches: Collaborate with big tech companies, or strike out on their own. These two approaches — which we refer to as the connectivity-centric model and the tech-centric model — carry their own set of benefits, risks, and requirements, making one or the other more suitable to a different operator.
- The connectivity-centric model centers on the relationship between telecoms and end users, with network operators occupying the types of roles that another company such as a cloud or tech partner typically fill. It can offer far greater revenue potential for a telecom, but carries increased upfront costs in the form of required systems and personnel investment, and means competing with a wider range of competitors, increasing the chance of losing out and facing revenue shortfalls.
- The tech-centric model places the tech provider as the key partner for an end user, meaning other products and systems in the solution revolve around the technology. Connectivity is also a key element here, as are devices, but the service offered by network operators is effectively commoditized. Network operators thus have a lower ceiling for increased revenue, but don't need to invest significantly beyond typical improvements to participate in this growth.