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How can operators monetize MEC?—Tech vs. business (Part 2)

admin by admin
March 7, 2023
in News


Editor’s note: Check out the first part of this story, “How can operators monetize MEC?—‘Selling shovels instead of digging for gold’”

If you take a high-level look at how mobile edge computing (MEC) is shaping up in the market, and listen to industry voices like those that participated in the recent 5G Monetization Forum (available on demand), there are a few things that become clear. 

Three key considerations for MEC monetization

First, and from the perspective on operator, new applications can be delivered with the combination of 5G and MEC, but that requires alignment between the network, the user, likely a hyperscaler, an app developer, potentially an integrator, and maybe even more parties. Second, because it requires an ecosystem approach to deliver on the technology, there’s going to need to be some business case evolution to see revenue shared between the parties and to allow a more cloud-like, flexible consumption model for the user. And third, look at any market projections and you’ll see multi-access edge computing, including with 5G as the access part, are set to grow at double-digit CAGR, north of 30%, through the end of the decade. 

So who’s making money off of MEC? Because right now it doesn’t seem to have made a splash on too many operator quarterly reporting calls

RCR Wireless News put that question to Volt Active Data’s David Rolfe, head of product marketing. “In terms of actually paying the monthly bills? There’s not a huge amount of stuff out there, to be honest. But there’s a lot of stuff in the pipeline, and we keep getting onto calls for people who are discussing things which aren’t hypothetical, aren’t science fiction…So it’s real.” 

Tim Pflugradt, vice president of customer solutions at Gotransverse, gave the example of a TM Forum Catalyst project the billing specialist participated in alongside Salesforce, MATRIXX Software and Mirakl. In this case, the operators offered a marketplace for 5G-enabled drone manufacturers to sell their connected drones to construction companies. He described: “The construction company would pay a very small monthly fee for the access to the marketplace. When the drone user wanted to use the drone for construction inspection, it was totally intent-based.” 

To the billing piece, MEC nodes would be queried to determine bandwidth demand and what that means for other customers, then make a pricing determination that was pushed back out to the drone operator. With approval, the operator “would get permission and then it would run. And then, at the end of all that, the CSP charged the drone operator for the slice, and then also paid the third-party settlement or royalty to the partners for driving that usage to the CSP.” 

From the CSP perspective, David Joosten of Vodafone Americas, speaking of the global parent, noted activity in around 30 countries involving MEC, but MEC as part of a mobile private network solution to support things like smart factories. Given activity levels, he said, “I sometimes wonder if we are capturing enough of them as an operator. For sure not. Joosten also highlighted traction in the healthcare space and using drones for a variety of purposes, including logistics applications. 

“I think there is really a lot of use cases at this point out there,” he said. “I think the one thing that I don’t see enough of, maybe, is really new business ideas…I think that’s the stuff that I miss a little bit at the moment…Because we are a bit early in that phase still, we need to work on that. But, yeah, [mobile private networks] I think is front and center of everything…I think that it’s a bright future. Not on every aspect, but let’s keep working on that.” 

For MEC, there is no easy button

To reduce that down, the technology can and does work, the use cases make sense, but there’s room for improvement in determining the clear business models needed for 5G-enabled MEC applications to deliver on market expectations. If it doesn’t sound easy, it’s because it isn’t. 

As Dell Technologies Senior Director of Global Solutions Co-creation Services Douglas Lieberman told RCR Wireless News late last year, “There’s not an easy button…The math comes down to shared risk and capex vs. opex and who’s responsible for maintaining it and running it. The reason why anyone moves to a cloud model is beyond just that it’s cheaper. You’re buying a risk model. Ultimately they make sure it’s running and they do software updates and patch updates. On my books, I can pay opex, not capex. It also enables, from an enterprise perspective, elasticity. We all know…there’s a financial model somewhere that accounts for elasticity.” 

He continued: “I truly believe that MEC is something that will evolve to provide value for the telcos. The takeaway is, there’s no easy button. We’re not going to walk out tomorrow and it’s just gonna be there. That ecosystem is going to be critical. That is going to be as much of a battle as the technology is.” 



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