Focus Outlook

Why Is Cloud Computing Significant for the Current Telecom Industry?

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The telecom industry is now on the verge of a technological revolution. Several technological concepts and trends shape the industry. There is a first-of-its-kind reliance on technology and its incorporation to overcome the challenges and restrictions induced by the novel corona virus and other factors.

The global telecommunications sector has changed drastically with the onset of the worldwide pandemic and further restrictions imposed by the virus. 

During the days of the pandemic, telecom networks experienced tremendous traffic, creating an ever-increasing demand for more telecom bandwidth. In the aftermath of the COVID-19 pandemic, the global telecommunications sector is embarking on a technological transformational path to meet growing consumer demands.

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The telecom cloud market was worth around $25.338b around two years ago. Towards 2026, the segment is expected to be worth about $74.36b (Mordor Intelligence Report).

The upcoming years are expected to witness a massive shift to the cloud, especially concerning communication service providers or the CSPs. An increasing number of CSPs prefer the cloud over others.

Based on regional analysis, the global telecom cloud market is segmented into North America, Europe, Asia Pacific, and the rest of the world. The regions of North America and Western Europe hold the largest market share.

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The main driver of the telecom cloud market growth is IT modernization. This means fully embracing public cloud services to leverage tools for cost savings and innovation in established new IT environments. 

Reliance on the cloud reduces internal computing resources and internal expenses, improving revenue streams.

The pay-as-you-go service model helps carriers introduce new services, reduce service costs, and operate more effectively in response to market demand. Cloud technologies enable the telecommunications industry to move key business functions to the cloud and benefit from its efficiencies. Single-product operators can also use the cloud to grow their portfolio of services and expand internationally at the speed of today’s market demand.

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Markets also have to contend with several restrictions. The general scenario common in the market is very interesting. This is an interesting mix of challenges and opportunities. The major restraining factors impacting the telecommunication cloud market include the risk of information leakage and strict telecommunication regulations. Growing demand for over-the-top (OTT) cloud services are challenging the telecom cloud market. 

Despite the benefits, shifting to a cloud platform is a tough task. There are many challenges often encountered by the industry that range from data compliance, performance, and being adherent to the rules and regulations that are significant for the industry.

The North American region is expected to remain crucial for the global telecom cloud industry. Aspects contributing to the growth of this market are the major telecom players based in these regions, especially in the United States and Canada.

The adoption of next-generation communication technologies, such as the deployment of 5G networks, is accelerating globally, making service automation a priority.

More than 64% of telecommunications service providers are focusing on improving the automation of their operational services using the cloud . These trends helped the telecom cloud market flourish during the pandemic era. (A report by Nokia). 

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