Cloud transformation is essential to enhance an organization’s digital capabilities and provide better customer service. Capgemini report shows nearly half of the telco (46%) network capacity will be entirely cloud-based in the next 3-5 years. Telcos are investing heavily in cloud infrastructure to keep up with the growing demand for high-speed connectivity and data services.
Cloud transformation can provide many benefits-
- Scalability: Cloud-based services can be easily scaled up or down to meet changing customer demands, enabling telecom companies to provide more flexible and efficient services.
- Agility: Cloud-based services can be deployed more quickly than traditional on-premises solutions, enabling telecom companies to respond rapidly to changing market conditions and customer needs.
- Cost savings: Cloud-based services can be more cost-effective than traditional on-premise solutions, as they can reduce the need for hardware, software, and maintenance.
- Innovation: Cloud-based services can enable telecom companies to experiment with new services and business models, enabling them to stay competitive in a rapidly changing market.
- Improved customer experience: Cloud-based services can provide a more seamless and integrated customer experience, enabling telecom companies to provide better customer service.
According to Capgemini’s report, telco players are each expected to invest at least $200 million yearly on average in cloud transformation during the same period.
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 more automated through the support of Artificial Intelligence (AI) and Machine Learning.
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 expect 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 annually in revenues from attaining early-mover status in markets enabled by cloud-based platforms.
“Cloud transformation is a fundamental change in the evolution of the network that physical devices and infrastructure have dominated. It represents a significant change of mindset for Telcos,” said Jacques Assaraf, Global Head of the 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.” said Assaraf.
Private cloud is the preferred cloud deployment model
A private cloud is a cloud deployment model where the cloud infrastructure is reserved for a single organization, and the data is stored on servers without sharing it with anyone else. It allows companies full control of the data and any level of customization, enhanced performance, and many other benefits.
The report also shows the telco cloud transformation is predicted to enable the quick rollout of some industry-specific use cases for businesses and customers, mainly in the 5G context.
Examples: 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.
Also Read: Benefits and challenges of having a multi-cloud environment
