BERLIN -- MEC Congress 2017 -- Telecom operators and enterprises in the US and Europe will spend about US$272 billion on edge computing capabilities between now and 2026, a figure that will exceed investments in 5G networks, according to a new forecast from research house iGR.
Presenting the forecasts here in Berlin, Iain Gillott, the president of iGR, told attendees that expenditure on edge computing in the US between 2017 and 2026 would be approximately $87 billion.
"This will start to grow very quickly and you will get to a point where nearly every commercial building will have MEC [multi-access edge computing] in some form," said Gillott during a presentation Tuesday morning.
Spending on edge computing in Europe will be even greater, according to iGR, reaching as much as $185 billion during the same period.
According to iGR's forecasts, telecom operators in Europe and the US will spend about $254 billion on 5G networks between 2017 and 2026, with $89 billion of that amount going on US infrastructure.
Investments in edge computing and 5G are inextricably linked, says Gillott, because next-generation mobile networks will not deliver the desired benefits unless they take advantage of edge computing innovation.
"5G needs MEC [mobile edge computing]," said Gillott. "You need processing closer to radios for latency. You can deploy it with 4G -- it doesn't have to wait for 5G -- but 5G absolutely needs MEC."
With edge computing, operators would move IT resources out of large, centralized data centers and place them near basestations and other facilities much closer to end users.
This re-architecting of the network promises to reduce network latency, a delay that occurs when signals are sent over data networks, and could allow operators to offer a range of new services requiring low-latency connections.
Telcos have been touting the latency attractions of 5G technology over existing networks. But Gillott is not the only expert to have argued that unless operators reduce the distances over which signals have to travel -- by investing in edge computing facilities -- 5G will not live up to this promise.
Gillott also believes that edge computing could have a radical impact on the economics of running a mobile network.
"By taking off-the-shelf hardware and processing more toward the edge of the network, you change backhaul costs," he said. "You don't have to backhaul to the core and you change the economics of running a network in the first place."
The prediction that 5G and edge computing spending in Europe will exceed that in the US over the next nine years may come as a surprise to some industry observers, given perceptions that Europe is lagging North America and parts of Asia in the technology stakes.
— Iain Morris, News Editor, Light Reading