The global telecom cloud market was valued at USD 20.6 billion in 2021 and it is predicted to surpass around USD 104.16 billion by 2030 with a CAGR of 19.73% from 2022 to 2030.
A telecom cloud is a next-generation network architecture that integrates cloud-native technologies, network function virtualization, and software-defined networking into a distributed computing network. Orchestration and automation are essential since the computing and network resources are scattered across clouds and locations.
Telco Cloud refers to shifting communications service providers (CSPs) from vertically integrating proprietary hardware-based infrastructure networks to cloud-based technologies. It is mainly used in the telecom business to refer to multi-cloud computing. The propelling drivers of the telecom industry are increased customer satisfaction, corporate agility, cost savings, and others. Also, the usage of standard computational hardware and automation reduces CapEx and OpEx resulting in increased adoption of telco cloud in the telecommunication industry.
It also delivers innovative bespoke B2B solutions, such as telcos may bring highly customized corporate products to market rapidly and affordably. Telco cloud makes it simple to collaborate with business service partners by providing access to public cloud services from any device, at any time. Additionally, it protects your consumers and profits from competitors; for instance, the telco cloud enables operators to swiftly alter business models to test new goods, services, and pricing schemes.
It also makes setting up new consumer experiences and communication channels easier. Furthermore, the lower CapEX and OPEX needs of telco cloud, better service resilience, and capacity to respond swiftly to faults and demand changes allow operators to maintain service levels and competitive pricing. These advantages result in lower client attrition.
The top trends in the telecom cloud industry are hybrid cloud hosting, Cloud Native Network Functions (CNNF), and telecom cloud collaboration. A hybrid cloud merges private and public clouds where the software and data are interoperable and portable. It allows telcos to optimize the operations with various patterns to manage workload. It improves resource allocation, optimizes infrastructure spending, provides enhanced organizational agility, and offers the ability to scale using the public cloud and controls available in the private cloud deployment.
Also, in the case of CNNF, Software-defined networking is replaced by NFV (Network Functions Virtualization), which provides more independence from proprietary servers and hardware. It provides a cloud-native architecture that combines VNFs and CNFs while adopting 5G features. This will provide maximum market coverage to telecom businesses looking to expand their services. Moreover, telecom cloud collaboration includes partnerships between hyperscalers and telcos which constitute a major cloud computing trend transforming the business.
Cloud service providers and telecom enterprises join forces to expand edge computing collaboration and 5G. Telecom cloud service providers are increasing their connectivity with the help of technology advancement to gain a competitive edge over their peers and capture a significant market share.
Scope of The Report
|Market Size in 2021|
|Revenue Forecast by 2030||USD|
|Growth rate from 2022 to 2030||CAGR of%|
|Forecast Period||2022 to 2030|
|Segmentation||Component, deployment type, service model, application, enterprise size, region
The component segment is bifurcated into solutions and services. Among these, the solution segment dominated with a revenue share of 61.2% in the year 2021. The solution segment offers unified communication and collaboration, content delivery networks, Network function virtualization, and other solutions.
The rising internet and mobile device penetration are driving the adoption of solutions. As a result, organizations are increasingly experiencing the need to leverage new technology to boost company agility and operational efficiencies. Telephone, email, voice mail, IM (instant messaging) and presence, unified messaging, audio, web, and video conferencing, file sharing and white-boarding, social networking, mobility, and other applications are being deployed by enterprises.
Furthermore, the exponentially expanding media content and demand for rich video content among increasing internet users and the digitalization trend among enterprises across end-user sectors drive the demand for content delivery network solutions.
The services segment is anticipated to witness the fastest growth, growing at a CAGR of 21.08% throughout the forecast period. The growth of this segment is attributed to the integration and deployment of telecom cloud services. These services ensure effective functioning and improved operational efficiencies throughout the process. The services segment is further categorized into professional and managed services.
The professional services sub-segment dominated with a revenue share of 59.92% in 2021 and witnessing a CAGR of 22.4% during the forecast period. Professional services such as business analysis and consulting, design and architecture, integration, and deployment help to evaluate business cases and build solutions to minimize costs and deliver operational efficiency, security, and QoS.
The managed services sub-segment is anticipated to witness the fastest growth, growing at a CAGR of 23.01% throughout the forecast period. Managed services provide services that include network management, infrastructure management, data center management, backup and recovery, maintenance, and support. Managed services model allows an organization to outsource the operations, management, and delivery of processes to enable proactive network management, a lower total cost of ownership (TCO), and smart bundling.
Deployment Type Insights
In terms of deployment type, it is classified into private, public, and hybrid. Among these, private deployment held the largest revenue share of 56.64% in 2021. Private infrastructure is operated entirely by an organization hosted in the data center of the same organization, either on-premise or off-premise managed by a third party.
A private infrastructure enables telcos with improved control, better security & data privacy, specialized computational resources such as RAN, VNF, and edge apps and services, and cost-efficiency in underutilized capacities in an already existing data center. Moreover, the unused capacities can be utilized through cloud interfaces allowing organizations to utilize the same tools and benefit via cloud management software such as automated management, self-service interface, and the ability to sell unused capacities to partner companies.
Its ability to provide virtualized services has reduced complexity and maximized hardware usage at an affordable cost, and it offers overall control over the infrastructure and computational resources.
The hybrid segment is anticipated to witness the fastest growth, growing at a CAGR of 22.96% throughout the forecast period. A hybrid cloud is a composition of two or more clouds that are unique entities, at least one public cloud, and one private cloud. Hybrid infrastructure bounds these entities by proprietary or standardized technology, enabling data portability.
The growth of this segment is attributed to cost-effectiveness and scalability benefits, along with better security and data privacy. It allows telcos to optimize the operations with various patterns to manage workload. It improves resource allocation, optimizes infrastructure spending, provides enhanced organizational agility, and offers the ability to scale using the public infrastructure and controls available in the private cloud deployment.
Service Model Insights
The service model segment is classified into Platform as a Services (PaaS), Software as a Service (SaaS), and Infrastructure as a Service (IaaS). Among these, the Software as a Service (SaaS) segment is expected to dominate in 2021 with a revenue share of 57.05%. The IaaS (Infrastructure as a Service) segment is estimated to grow at the fastest CAGR of 21.6% throughout the forecast period.
SaaS is a service that provides a business consequence, is purchased as a subscription, and is built on cloud-native Software. It includes a fully digitalized business experience and a fully automated service lifecycle for any carrier-grade network. Telecommunications firms may easily create agile application frameworks that optimize resource allocation and reduce overall complexity by utilizing SaaS technology. This improves corporate agility and enables telecommunications firms to accept a continual rate of change.
Before, telecommunications startups were pushed to the margins since dominant firms held a monopoly. However, the rise of SaaS technology has given small firms the ability to compete in the industry and gain their share of clients. SaaS enables them to provide enterprise-class services while reducing infrastructure overheads and prices.
IaaS is a low-cost, easy-to-access computing resource that gives enterprises more flexibility in trialing and testing business services and concepts. It enables businesses to avoid the typical risks associated with innovation, resulting in increased growth. The main advantage of IaaS is its potential to cut infrastructure expenses, shifting the cost base from CAPEX to OPEX.
The IaaS service model is appealing as it enables the migration of infrastructure to an IaaS solution with real-time business insights, reduced maintenance on on-premise data centers, and flexibility to scale IT resources as a separate service component. Still, the growth in data center expenditures across Asia-Pacific will drive availability and demand for IaaS in the future. This will result in enterprises shifting away from opportunistic and unstructured IaaS usage and toward more strategic projects.
Enterprise Size Insights
In terms of enterprise size, the industry is classified into large enterprises and SMEs. Among these, the large enterprise segment dominate in 2021 with a revenue share of 62.42%. The SMEs segment is expected to grow at a rapid CAGR of 21.04% throughout the forecast period. The large enterprises are partnerships and mergers to dominate the industry.
The adoption of cloud services at a substantial rate in large enterprises is propelling market growth. Large enterprises are making considerable investments in telecom cloud to address issues such as data security, privacy, and cloud connectivity failure. For example, in July 2022, AST SpaceMobile, Inc. and Nokia signed a five-year 5G deal. Under this deal, the companies will work together to expand universal coverage and connect underserved communities worldwide.
In May 2022, Nokia also announced the launch of the cloud-native IMS Voice Core product, which will help CSPs (Communication Service Providers) increase operational agility, simplify their network operations and decrease the cost of managing their network.
SMEs are increasingly growing cloud technology by adopting smart tech solution-cloud-based unified communications, which help small enterprises streamline their business operations. Additionally, the SMEs benefit significantly from the opportunities telecom cloud services offers, such as subscription-centered, cloud-based management systems consisting of end-to-end Wi-Fi solutions, automatic system upgrades, access points, and a cloud-native management/control plane.
Small and medium organizations/enterprises widely adopt it to gather analytical data about customer preferences and interactions for real-time decision-making. Adopting cloud-based communications at affordable costs will speed up the implementation process giving SMEs an edge to achieve global competitiveness.
The network, data storage, & computing segment dominated with a revenue share of 35.43% in 2021 and witnessing a CAGR of around 16.06% during the forecast period. It allows organizations to perform functions such as web application development, testing and developing new technologies, improving scalability, batch processing and storage, hosting, and handling peak workloads.
It also allows organizations to detect QoS degradation and implement techniques to manage traffic across the networks. These techniques involve optimizing the radio access network scheduler, limiting traffic, video optimization, and prioritization of mission-critical applications and different service plans.
The cloud migration segment is anticipated to witness the fastest growth, growing at a CAGR of 23.29% throughout the industry forecast period. Cloud migration allows switching from one telecom cloud computing provider to another, enabling host data and applications with high security, better performance, and flexible prices.
Cloud migration provides a flexible pay-per-use model, self-service provisioning, greater elasticity, and redundancy, and includes different service models such as IaaS, PaaS, and SaaS. Cloud migration benefits include cloud security, managed operations, improved enterprise productivity, flexibility, and scalability, improved QoS, agile deployment of applications, and the Opex model.
Global telecom cloud industry analysis is conducted across regions such as North America, Europe, Asia Pacific, South America, and Middle East & Africa. Among these, North America is expected to dominate in 2021, gaining a revenue share of 35.35%.
There is the increased use of hybrid telco cloud installations in the U.S. and Canada, which helps to embed best-in-class data analytics and artificial intelligence available in the public cloud sector to predict and fulfill consumers’ needs and preferences. The companies also use the cloud to eliminate silos databases, consolidate their customer data, provide an engaging Omni channel customer experience and create a 360-degree perspective of the consumer.
The rapid infrastructure growth in the Asia Pacific, particularly in South Korea, Japan, Singapore, Australia, India, and China, as well as the rapid development of the 5G network, presents high prospects for the telecom cloud to be implemented. Government supportive initiatives and policies motivate the companies to expand their business in this region, contributing to the economic growth.
The decrease in administrative and operational expenses, high demand for over-the-top cloud services, and awareness of telecom cloud among businesses are a few reasons for the growth of the regional industry.