Edge Computing Density Hinges on Business Model Assumptions

Mobile operator opinions about revenue upside from mobile edge computing mostly mirror executive views about revenue upside from 5G more generally. Which is to say, service providers in East Asia and the United States are much more positive about use cases and revenue generation than are executives in Europe.

To be sure, much of the Euro-skepticism flows directly from the harder business case for mobility services generally. U.S. operators routinely earn higher profits from their services, with greater scale, than happens in Europe.

And while revenue is growing in the United States, it is shrinking in Europe. So European mobile execs can be forgiven for feeling less bullish about the upside from infrastructure edge computing.

Some have suggested, for example, that Vodafond might need several hundred edge data centers in the U.K. market, based on use cases calling for latency less than 15 milliseconds to 20 milliseconds.

"I think that is vendor wishful thinking," said Scott Petty, Vodafone UK CTO. "The use cases don't exist for why we would want to do that."

In the near future, he said, eight data centers would be enough for latency of between 15 and 20 milliseconds.

Even when lower latency performance is necessary, the number of required edge data centers is unlikely to exceed 64 across the United Kingdom.

On the other hand, Telefonica, for example, already has 7,000 main central offices in Spain, where DT has just 900 across Germany. In other words, some mobile operators already have a bigger footprint of potential edge aggregation sites.

source: Telefonica

But Juan Carlos Garcia, Telefónica director of technology and architecture believes even edge computing in Spain might require only a few hundred locations. That grows from a belief that not so many apps actually will require latency so low the edge computing location must be located a few kilometers from the end user devices.

It all hinges on one’s estimate of the business model and the use cases. On that score, there still is no consensus about levels of latency performance that might be required, or when.