Fable has it that a vampire cannot walk into a home unless invited. Web giants, the sometime bloodsucking villains of the telecom world, need the same permission to enter a service provider's "edge" property. For Amazon Web Services (AWS), it duly came last week when four operators -- Verizon, Vodafone, KDDI and SK Telecom -- agreed to open the doors, hoping AWS will be a helpful tenant. The danger is that it bleeds them dry.

The deals should be symbiotic. AWS and its Internet rivals need access to central offices and other telecom infrastructure to support more advanced cloud services. Operators need the platforms, software expertise and developer communities that web giants command. The latest edge deals are not dissimilar to much older arrangements that have been mutually beneficial. Consumers buy a broadband service to guzzle Netflix. The video-streaming firm cannot survive without high-speed connectivity.

Yet telecom operators and their investors feel they have lost out. For all the money they have poured into fiber-optic lines and 4G basestations, Internet firms unconstrained by regulation have emerged as the powerbrokers of the digital age. That is reflected in share price movements since 2011, when 4G services were launched in the US. Verizon, which has performed much better than most European operators, has gained 59% during this period. But Google's share price is worth three times more, while Microsoft has seen a five-fold increase. Today, the valuation of AWS parent Amazon is eight times higher than it was eight years ago.

Figure 1: Would You Let Him In? To some parts of the telecom industry, FAANG firms have been as bloodsucking as their acronym suggests.

Have operators now given up and bared their necks to the FAANG firms (an acronym that describes Facebook, Amazon, Apple, Netflix and Google)? The latest AWS deals point to a smaller edge role than many operators would have seemed happy with several years ago, when technologies like network functions virtualization (NFV) were positioned as the answer to the "over-the-top" (OTT) threat. NFV is now a zombified mutation of its original promise, and partnerships with OTT players are all the rage.

Unsurprisingly, then, an audience poll of telecom executives at Light Reading's Vision 2020 Executive Summit -- held last week in Vienna -- showed overwhelming support for the AWS deals. They are a classic "win-win," attendees mainly felt. In the long run, everyone will thrive, according to this logic, even if no one dominates. Given all their previous blunders, operators may have felt the alternative was to miss out entirely.

But if history is any guide, the risk is that operators become the bag carriers and bellboys of the edge market, while FAANG plus Microsoft run the show. One outspoken dissenter at Vision 2020 highlighted the dangers. Under the event's rules, the executive cannot be identified, but the speaker expressed concern that NFV and telco cloud efforts have not delivered the required results and that the deals being struck with the FAANG companies are a short-term fix that might not play out well for the operators in the long term.

In the immediate term, the AWS contracts look like a potential nightmare for some industry attempts to build a middleware platform -- aiding the development of edge-computing applications -- and bypass the technology giants. In 2017, Germany's Deutsche Telekom set up a Silicon Valley-based software company called MobiledgeX and subsequently invited other service providers to invest in the business. The hope, said Alex Choi, Deutsche Telekom's technology boss, was that MobiledgeX would become a de facto middleware standard in the telecom sector.

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But its progress has been disappointing. So far, it has failed to attract investors other than Deutsche Telekom, according to Crunchbase. Besides the German operator, it has previously named only Canada's Telus and South Korea's SK Telecom as partners, and it is unclear that either has moved beyond trials and test facility developments. Now AWS is converging on the same middleware space with its Wavelength technology -- the platform highlighted in the recent deals. And SK Telecom is one of the Wavelength partners, casting a shadow over its relationship with MobiledgeX.

Technology aside, edge business models are of huge concern to one operator who spoke with Light Reading on condition of anonymity. The unease is not hard to fathom. How will future revenues be shared between operators and their technology partners? Will 5G consumers be willing to pay for a low-latency gaming connection on top of the game itself? In the business market, does the operator or the cloud company take the lead in customer engagements? None of these questions have been satisfactorily addressed.

Some Tier 1 service providers have publicly voiced disquiet or wariness about tie-ups with cloud titans. "I won't mention names, but we've already had exclusive deals offered where they want to provide infrastructure and for us to provide only connectivity," said Channa Seneviratne, a network engineering director for Australia's Telstra, at a conference in June. During a phone call with analysts earlier this year, Howard Watson, the chief technology officer of the UK's BT, declined to answer one question about his willingness to let Google and Amazon into BT's edge. "I think that's something that we spend quite a lot of time thinking about and isn't something we're going to comment on at this stage."

These executives are in an unenviable situation. Partnerships with cloud giants look like promising ways to benefit immediately, but they may also be taken as a tacit acknowledgement of edge shortcomings. All might be forgiven if the AWS partners enjoy a sales boost when their edge services arrive. That is a very big if.

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— Iain Morris, International Editor, Light Reading