Les acteurs des télécoms envisagent d'investir en moyenne un milliard de dollars dans la transformation cloud de leur network pour préparer le monde connecté de demain.

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Telcos expected to invest $1 billion on average in network cloud transformation to enable a future connected world

Paris, February 16 2023 – New research from the Capgemini Research Institute - ‘Networks on cloud: A clear advantage’ - reports that nearly a half of telco (46%) network capacity will be entirely cloud-native¹ in the next 3-5 years. To achieve this transformation, telco companies are each predicted to invest at least $200 million per year on average in cloud transformation during the same period. ‘Early adopters’² are expected to reap the most benefits from a financial, business and sustainability perspective.

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 Learning³. Private cloud is the preferred cloud deployment model.

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 are expecting 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 per year in additional revenues from attaining early-mover status in markets enabled by cloud-based platforms.

An ecosystem approach via telco cloud will enable new business opportunities

Telco companies that have initiated their cloud transformation over the last 3 to 5 years cite notably increased ‘customer lifetime value’⁴, and improved customer experience amongst the top business drivers. Customer lifetime value can increase as a result of cross-selling and upselling more value-added services to existing customers and increasing loyalty benefits to mitigate attrition.

One of the key opportunities offered by cloud telco transformation is the deployment of an Open RAN⁵ network architecture, an ecosystem-based approach that has the potential to unlock innovation, lower TCO, and uncover new revenue opportunities.

According to the research, the telco cloud transformation is expected to also enable quick rollout of some industry-specific use cases for enterprises and end-consumers, especially in the 5G context; for example, 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.

More than a third of greenhouse gas emission reduction achieved through telco cloud
The report highlights that besides business benefits, telcos that have undertaken cloud transformation expect to reduce their greenhouse gas (GHG) emissions by 5%, which represents one third of expected overall reduction of networks carbon footprint in the next 3 to 5 years. Owing to their strong preference for private cloud architecture, Telcos are expecting sustainability benefits on emissions from their direct sources (Scope 1 and 2⁶) due to lower emissions from facilities, including reduced physical hardware footprint, reduced power usage, auto-scaling of network on demand, and managing power consumption of mobile towers by using AI and Machine Learning.

“Cloud transformation is a fundamental change in the evolution of the network, that has been dominated by physical devices and infrastructure. It represents a significant change of mindset for Telcos,” said Jacques Assaraf, Global Head of 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.”

For more information or to download the report, visit: link to report.

Methodology

The Capgemini Research Institute surveyed 270 executives from large Communications Service Providers (CSPs), Network Equipment Providers (NEPs), Niche Equipment Vendors (NEVs), hyperscalers, Containers as a Service (CaaS) vendors, and large cloud providers. Of these, 170 executives belong to CSPs, 50 to NEPs and NEVs, and 50 to hyperscalers, CaaS vendors and large cloud providers. In-depth interviews were also conducted with 25 industry executives.

About Capgemini
Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology. The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organization of over 350,000 team members in more than 50 countries. With its strong 55-year heritage and deep industry expertise, Capgemini is trusted by its clients to address the entire breadth of their business needs, from strategy and design to operations, fueled by the fast evolving and innovative world of cloud, data, AI, connectivity, software, digital engineering and platforms. The Group reported in 2021 global revenues of €18 billion (about $21 billion USD at 2021 average rate).

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About the Capgemini Research Institute
The Capgemini Research Institute is Capgemini’s in-house think-tank on all things digital. The Institute publishes research on the impact of digital technologies on large traditional businesses. The team draws on the worldwide network of Capgemini experts and works closely with academic and technology partners. The Institute has dedicated research centers in India, Singapore, the United Kingdom, and the United States. It was recently ranked #1 in the world for the quality of its research by independent analysts.

Visit us at https://www.capgemini.com/researchinstitute/

1 ‘Cloud-based’ or ‘cloud-native’ networks as those composed of network functions in a containerized form and deployed directly on cloud infrastructure as “cloud-native”.
2 ‘Early Adopters’ refer to the most advanced on the below 3 dimensions: presence of a comprehensive telco cloud strategy with well-defined goals and timelines; Proportion of network functions that have been virtualized; they expect a majority of their network capacity (>50%) to be on cloud.
3 Machine learning (ML) is a field of inquiry devoted to understanding and building methods that "learn" – that is, methods that leverage data to improve performance on some set of tasks. It is seen as a part of artificial intelligence.
4 'Customer lifetime value’ the total amount of money a customer spends with a business during the lifetime of a typical transactional relationship.
5 Open RAN stands for open radio access network where network functions in RAN can be assembled from a variety of providers collaborating on a standard set of protocols and specifications.
6 Scope 1 greenhouse gas emissions are direct emissions released to the atmosphere from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy.

Pièces jointes

• Capgemini_Infographic-Cloudification-of-Networks-Report
• 2023_02_16_ Capgemini_Networks on Cloud Report_Press Release