For large telcos (with >$30 billion in annual revenue), telco cloud<\/a> investment will be, on average, $348 million per year, according to the report. In contrast, smaller telcos are investing on par with this proportionally.
“Telcos of all sizes are investing 38-44% of their network-transformation budgets in telco cloud,” said the report. In revenue terms, this is 0.9-1.2% of annual revenue per telco per year.
Over half of telco cloud investment will be made in three areas only – technology infrastructure, including cloud hardware, software, deployment, and integration; research & development, and workforce, involving upskilling, reskilling, and hiring for new skills, respectively.
According to the report, investment in telco cloud can reap benefits such as risk shared with partners such as equipment makers and hyperscalers, and can lead to an uplift in the average revenue per user (ARPU), among others. It also points out the financial benefits of telco cloud including a potential top-line improvement of $110-210 million and a bottom-line improvement of $260-380 million.
The report said that “telcos will, on average, gain $370–590 million in yearly benefits, against an average investment of $206 million in telco cloud”. “One of the key opportunities offered by cloud telco transformation is the deployment of an Open RAN<\/a> network architecture, an ecosystem-based approach that has the potential to unlock innovation, lower TCO, and uncover new revenue opportunities,” it added.
“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 Jacques Assaraf, Global Head of Telco Industry<\/a> at Capgemini<\/a>.
The findings are based on a survey of 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, according to a statement by Capgemini<\/a>.
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