Edge 5G and 6G

For Telco IoT Services, the Future Starts Now

In the communication service provider (CSP) space, the big theme of the last few years has been “telco transformation.” CSPs have taken major steps to transform their businesses—deploying 5G radio networks, evolving towards 5G Cores (5GC), updating operational models to support cloud-native architectures and agile software approaches, and more. These steps will ultimately enable transformative 5G and 6G network capabilities to help CSPs deliver more differentiated, durable value to customers. While these efforts are essential for tomorrow’s groundbreaking use cases, many CSPs are struggling with a more urgent question today: how to generate more revenues from the network.

For CSPs that invested heavily in new 5G spectrum and network upgrades, the pressure to monetize those investments is growing. Real ROI won’t come from adding new subscribers—there just aren’t that many customers left who need new mobile service, especially in more mature markets. Fortunately, there’s a service opportunity with far more growth potential: the Internet of Things (IoT). 

Basic IoT services—like mobile connectivity for smart watches and tablets—aren’t new to CSPs. But they represent an excellent opportunity for revenue growth, using the network and capabilities that telcos already have in place. As the market for IoT services evolves and businesses take advantage of new edge capabilities like those found in the VMware Software Defined Edge (SDE) portfolio, this opportunity will only grow.

What’s so special about IoT?

Advanced 5G capabilities like network slicing and ultra-low-latency connectivity will provide the foundation for amazing future services. But CSPs still have work to do before they can fully take advantage of them. Network slicing, for example, requires a complete 5G Standalone (SA) network, including both next-generation radios and 5GC, plus end-to-end operational frameworks for provisioning, observability, and service assurance. Most telcos are still in the process of building out those 5G SA elements. IoT, however, represents a growth opportunity they can exploit right now. 

The IoT value proposition is straightforward: by connecting a device and building a service around how data moves back and forth between endpoint and cloud, CSPs gain a revenue-generating business case. Such services start with basic connectivity, but they typically layer data flow monitoring and metering on top—either to support a customer’s internal operations or to enable a third party to do something of value with that data.  To understand why IoT looks so attractive to telcos, just check the numbers. According to a Fortune Business Insights analysis from April 2024, the global IoT market will grow from nearly $714.5 billion in 2024 to more than $4 trillion by 2032, a compound annual growth rate of 24.3%. As market demand for connected devices and sensors grows, we will see more revenue-generating service opportunities for CSPs. Potential IoT use cases include:

  • Wearables and smart appliances, where CSPs work with device makers to offer hardware with connectivity services attached
  • Energy, connecting grid equipment to monitor consumption and detect outages
  • Transport and logistics, to keep fleet vehicles connected with service centers
  • Physical security, monitoring movement of merchandise in and out of warehouses and retail stores to reduce theft 
  • Public safety, mobilize and respond to incidents with emergency responders such as firefighters and police forces 
  • Healthcare, such as securely transmitting protected health information (PHI) from clinician tablets and from emergency responders and ambulances in the field 
  • Agriculture, connecting sensors monitoring soil and atmosphere measurements

Perhaps the biggest opportunity for IoT growth is in manufacturing, where industrial customers are adopting more sensors and automation to improve quality and efficiency. In Audi’s smart factory for example, the carmaker partners with leading tech firms, including VMware and one of our Tier-1 service provider partners, to automate almost every step of vehicle manufacturing and assembly. 

The CSP partner makes managing industrial IoT networks simple. Audi technologists can configure edge nodes for every connected device and sensor, check real-time health, update software, and even take devices down for maintenance, all from a laptop. Meanwhile, the CSP has onboarded thousands of new connected devices and generates recurring revenues through their IoT service. 

The Telco IoT Advantage

Across all IoT use cases, CSPs can offer capabilities well beyond what customers can achieve with Wi-Fi networks or other connectivity options. In the first place, CSPs offer “carrier-grade” performance. They deliver more consistent latency and uplink/downlink speeds, mobility, and can guarantee reliability under service-level agreements (SLAs). For businesses investing in new mission-critical IoT applications in particular, this extra level of assurance is essential.

Just as important, CSPs can provide a higher level of security and privacy. By default, telco networks and subscriber identity module (SIM)-based authentication mechanisms are harder to hack than alternatives. CSPs also have the mechanisms and expertise to assure total isolation of each customer’s traffic, even over a shared infrastructure. Telco networks meet rigorous compliance requirements for secure government communications, PHI, payment and financial information, and more. CSPs also have a multi-decade track record of successfully protecting customers’ critical communications.

Unleashing IoT Innovation at the Edge 

At VMware by Broadcom, we’ve been leading the industry in helping CSPs build new capabilities for emerging 5G and 6G services. At the same time, we continue to provide tools to realize more value from existing CSP networks. Our Software-Defined Edge (SDE) portfolio of solutions provides an ideal platform for IoT applications, while opening new pathways for telcos to monetize their networks and expertise. 

SDE solutions provide digital infrastructure for running applications at distributed locations, close to where endpoints generate and consume data. Software-defined wide-area network (SD-WAN) intelligence ensures that each distributed location has the resources it needs—including connectivity, security, and local compute and storage infrastructure—to meet demanding edge application requirements. SDE provides:

  • Right-size computing infrastructure to support new operational technology (OT) applications, such as industrial automation or connected healthcare
  • Zero-touch orchestration that automatically delivers the right resources to the right location, in real time, to meet mission-critical application requirements
  • Programmable connectivity that links distributed edge sites with the telco network, so customers can program the optimal connectivity for each workload

If that sounds like the perfect platform to support growing telco IoT and edge businesses, it is. And since Gartner predicts that, by 2025, more than 75% of enterprise data will be generated outside the data center (“What Edge Computing Means For Infrastructure And Operations Leaders”), that opportunity will only grow. 

Most enterprises already work with a telco to provide physical links to distributed edge locations. By augmenting WAN connectivity with new solutions like SDE, CSPs can create a comprehensive IoT offering to bring advanced digital capabilities wherever customers need them. Meanwhile, CSPs can bundle SDE solutions with connectivity, security, collaboration, managed Wi-Fi, and other enterprise offerings and deliver everything as a single solution, with a single monthly bill. 

It’s a win-win for CSPs and their enterprise customers. Best of all, CSPs don’t have to wait for future 5G/6G network updates to get started. They can launch new revenue-generating IoT and edge offerings today!

To learn more about the software-defined edge, please visit our website.