**Update 7/28/22: After this story was published AWS reached out and said Verizon DOES NOT use AWS data centers for its vCU as claimed in paragraph #1 below.
For several years, the mobile operators have been talking about edge computing and vRAN and network slicing. We’ve all heard about the beautiful vision of Industry 4.0, with robots whizzing around connected by 5G networks and making our lives better.
This year, the telcos are starting to deploy vRAN and edge computing, but are they investing in the grand vision?
- Verizon is deploying Cloud RAN with Samsung and Ericsson, with vCU in regional data centers and vDU at the tower. Verizon uses about 20 AWS data centers currently for their vCU, so the partnership with AWS seems to be working out well for their own internal use. The vDU at the site is deployed in a hardened outdoor enclosure, so it’s not easily expandable for MEC applications. What is the growth strategy here? Is the idea to replace the hardened enclosure with an air-conditioned rack to allow for MEC expansion? We don’t see the immediate scale-up strategy in the current deployment.
- Dish is well underway with their nationwide rollout, with vCU running in AWS regional data centers and vDU running in servers at the tower sites. We believe that Dish has plans for MEC collaboration with AWS, but again it will require some modifications to the DU server at the site, at least for any MEC applications that require significant compute power or memory.
- Rakuten is the farthest along, with thousands of vRAN sites running commercial traffic in a stable network. We also expect Rakuten to be a leader in converting their vRAN servers into edge computing nodes, as they have a direct pipeline to financial, retail and other business areas. They have delivered packages by drone since 2016. Personally, I don’t think of Rakuten as a mobile operator, but as an e-commerce company that built a network.
These companies are the success stories — the ones that have built vRAN and are moving in the direction of virtualization in their network. What about the other operators in the market? We don’t see much investment going on. In fact, the installed base of MEC sites in the far edge of the telco network is only a few hundred today.
The danger is that if the telcos delay too long, or continue deploying vRAN without a clear path to MEC, the world will leave them behind. We know that the cloud players are deploying their own MEC sites, such as the AWS “Local Zones” in targeted areas such as the Hollywood studios and Ubitus cloud gaming. AWS has ramped up to more than 50 Local Zones around the world, while the telcos have been delaying.
Even worse, the enterprise is moving on without the telco. Walmart has deployed more than 10,000 edge nodes.
Other national and international brands have deployed on-prem edge nodes in thousands of branch locations. Ironically, they are driven by the poor connectivity of the operators at their small-town branch locations, so the telcos are driving these retailers to invest in on-prem edge computing. The cruel part of the irony is that the telcos aren’t taking advantage of the problem they created. They are taking too long to bring edge services to market, and the retail world is moving on without them.
If communications service providers delay another five years, I expect to see manufacturing companies and other industrial enterprises developing edge computing platforms that are tailored for the on-prem business model. Ten years from now, small businesses could be using an appliance based on on-prem edge computing, and the telco could be “only a dumb pipe.”
I realize that the competition in wireless is fierce… and kudos to Rakuten, Dish and Verizon for taking bold steps forward. If the other telcos don’t look up and plan a strategy to participate in private networks and cloud, they will be left behind.
Joe Madden is principal analyst at Mobile Experts, a network of market and technology experts that analyze wireless markets.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.