Mobile edge computing is viewed by many mobile network operators as related to 5G, but MNOs can glean benefits from MEC in their current 4G-based operations.
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Stagnant growth in telecom has pinned hopes on “5G” technology to be a catalyst for a wave of growth generated from new services and applications enabled by the unparalleled performance specifications.
To deliver on this promise a number of cornerstone technologies and concepts are under development. One such concept is the application of edge computing in wireless networks, which places application compute and storage functions close to the edge of the network to improve performance and enable a suite of services such as traffic and video optimization, private networks, internet of things, augmented and virtual reality and many others. In fact, the performance requirements of certain applications can only be met with edge computing making it an essential part of the 5G network architecture.
In our research of multi-access edge compute, we found that mobile network operators remain ambivalent and without a well-defined strategy on MEC. This would be understandable if we consider 5G is still a few years away. However, we find it somewhat puzzling because MEC applies equally in 4G networks to enable many of the same applications promised in 5G. In fact, MEC applications in 4G networks would serve as the “canary in the coal mine” for potential 5G services, making MEC strategically relevant, but indications are otherwise.
To understand the dynamics, we approach MEC from an application perspective. Applications can be divided into two categories: optimization applications that help MNOs save money; and monetization applications that help MNO generate new revenues. While the first MEC applications, such as caching and traffic optimization, fall into the optimization category, the focus has shifted towards monetization applications such as private networks and IoT. But monetization applications are predominantly enterprise applications. MNOs who make the bulk of their revenue from selling broadband consumer services face a challenge in reaching deep into the enterprise segment.
This is the chasm MNOs have to cross to capitalize on the business opportunity provided by MEC. It equally applies to future opportunities provided by 5G networks, which allow MNOs to better align services with the requirements of vertical markets. The chasm is much about business and operation models and culture.
To serve the enterprise, MNOs need to take an IT-centric rather than a telco-centric approach. The consequences are far reaching as this cuts through to the culture of the organization and its operational processes. MEC strides the radio access network and the core networks, but it is foremost a platform to enable a set of IT applications and services. MEC is synergetic with network virtualization where software-based applications run on commercial hardware. Thinking of MEC in the traditional telecom manner would not lead to commercial success. Hence, to enable the implementation of MEC it is prerequisite to change business culture and organizational structure.
Through this landscape a number of opportunities emerge, which we believe could have a drastic effect on industry structure. Specifically, MEC is an integral part of private networks, which could be offered by third parties who leverage small cells operating in shared or unlicensed spectrum. The 3.5 GHz consumer broadband radio service band in the United States, which is set for commercial operation within the next 12 to 18 months, provides a platform for neutral hosts and MEC service providers to offer differentiated enterprise services. MuLTEfire in 5 GHz is the technology for third parties in the rest of the world to follow the model in the United States. This is the genesis of a new class of companies who could combine MVNO models to complement MNO services in the enterprise segment based on a winning business accommodation among all parties.
While the combination of small cells, network virtualization, MEC and new spectrum regimes are elements of 5G, they all apply just as well in LTE networks. The point is that there is no need to wait for 5G to put this framework into motion. What is critical, however, is to ensure interoperability among different systems. This requires well-defined interfaces and alignment of business objectives among all stakeholders: MNOs, MEC service providers, equipment vendors and MEC application developers.
