5 Strategies for Monetizing Mobile Edge Computing (MEC)

In the past few years, cloud services have been unable to compute the large amounts of data generated by mobile devices and provide meaningful analysis, even at the speed of light. This is because the distance between the cloud and the device through backhaul creates latency, which is a problem that Mobile Edge Computing (MEC) sets out to solve.

MEC aims to eliminate latency by providing computing power closer to the device, which enhances various applications such as virtual/augmented reality, which is critical for technologies such as autonomous vehicles with millisecond-level latency. Edge computing will play a key role in 5G, the next generation of mobile communication technology that is expected to usher in robots, self-driving cars, VR/AR, AI and IoT connections.

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OTT also comes to grab market share

According to industry analysts at ABI Research, 5G could generate nearly $250 billion in revenue. For operators facing declining revenues, 5G will bring them lucrative profits and more opportunities. However, industry experts have become cautious due to the erosion of OTT, which has impacted traditional revenue sources such as voice and messaging.

OTT is impacting the connectivity business of mobile operators. Project Fi, which resells mobile services in markets such as Germany, is the most typical example of OTT network connectivity. The emergence of MEC has opened the door to a new world for operators and will give full play to the potential of 5G monetization to cope with the impact of OTT.

Operators have the advantage of geographical and topological coverage, thanks to their infrastructure and online connected devices. MEC is a natural development and to unlock its potential, mobile operators need to implement the following five strategies to monetize MEC.

1. Look beyond fog computing

MEC architecture has caused confusion in the enterprise because there are multiple implementation routes and competing open source standards, different security protocols, various monitoring and hosting applications, and even fog computing. Developers who want to take advantage of edge technology must face different challenges and take into account the new technologies available. Mobile operators have the opportunity to provide clear solutions to developers and enterprises and create a strong ecosystem.

2. Create a developer-centric ecosystem

Developers of edge device applications play an important role. Companies like Amazon can now provide developers with convenient and flexible public cloud access, innovative software solutions and monitoring systems that give developers full control. Operators should be able to do better in this area.

Create an edge ecosystem with developers at the core, where developers can easily configure their applications and leverage APIs. The platform needs to provide developers with public cloud-level flexibility and control. Finally, the operator ecosystem can provide ultra-low latency connectivity.

3. Deploy a carrier-grade architecture

The architecture of the ecosystem needs to be very strong so that developers can migrate easily. Operators must have an architecture that integrates automation, orchestration, etc. with end-to-end visibility to maximize service delivery. From user, developer and operation experience to network and application to cloud native architecture and even business model.

4. Embrace a cloud-first strategy

In order to win the competition, it is sometimes important to think from the perspective of your opponent. In the competition between mobile operators and OTT, operators must not only embrace cloud-native architecture, but also adopt a cloud-based OTT-style mindset. Typically, operators have a long testing cycle, conduct a lot of trials and interoperability checks, and this cycle may take several years, which often stifles innovation. OTT sees the network as a tool to acquire users. Their top priority is to launch new products faster than their competitors. For most OTTs, standards are a constraint on their development speed.

The choice for operators is clear: wait for standards to emerge before deploying MEC? Some mobile operators have already started rolling out MEC products.

5. Innovation of business model

Similar to the multiple use cases of 5G, MEC has multiple business models. One of them may be similar to the business model based on cloud computing, which brings more monetization opportunities to operators. Operators' developers profit from applications that connect millions or even billions of devices, and operators can also generate revenue from the developers and end users of this device.

An operator's MEC strategy could generate a marketplace where developers will share services and technologies with other developers and leverage APIs and connectivity to create more powerful and profitable edge applications. In addition, there are business models around technologies such as autonomous and connected cars, and an operator's MEC ecosystem could establish an app store-style system that can promote AI and machine learning technologies to mass-market applications.

MEC also provides operators with low-latency connectivity solutions for public safety, connected and autonomous vehicles by working with car companies, Internet homes and industrial IoT. Computer vision and video analysis can help operators create business models such as vehicle insurance, transportation optimization, and assisted driving. The cost of providing such services will drop significantly because operators can save backhaul costs by analyzing high-definition videos at the edge instead of transmitting large amounts of video to the end office or the cloud.

There is no doubt that MEC and 5G will usher in an era of technological breakthroughs, and mobile operators are seizing this momentum to gain more market share, depending on how mobile operators want to be agile, flexible and innovative.