Edge Computing – defining the market and business models

Telcos leverage locational assets to reinsert themselves into the distributed computing ecosystem and drive 1ms latency.

Nitish Kumar · Manager – Planning, Strategy and Market Intelligence at TPG Telecom1 January 2021Period: January 20218 min read

Last updated 10 June 2026

1ms→

Gold standard network latency target for 5G and edge applications

500↑

Points of edge compute identified by Telstra in Australia

Locked

Companies covered:TelstraVodafoneAmazonGoogleMicrosoftVerizonTelefonicaEricssonCommonwealth Bank of AustraliaNokiaICP Electronics AustraliaMyriotaMothersonFastlyScaleAmnesiumEDGEDC

Abstract

This report analyses the rise of edge computing as a critical enabler for IoT and 5G, driven by plunging sensor costs and the need for real-time data processing. It identifies a complex value chain comprising devices, hardware, connectivity, and orchestration. For telcos, edge computing represents a strategic opportunity to regain bargaining power lost to cloud hyperscalers by utilizing existing physical infrastructure like mobile base stations. The brief details four specific business models—Edge Hosting, SI Extension, Edge Cloud, and Full Stack—to capture new revenue streams.

Key Takeaways

Edge computing is essential for 5G to reach the 1ms latency gold standard required for real-time applications.
Telcos can leverage existing locational assets like mobile base stations to compete against cloud hyperscalers.
Four distinct business models are identified for telcos: Edge Hosting, SI Extension, Edge Cloud, and Full Stack Service.

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Frequently Asked Questions

Edge computing is now essential to meet the 1ms gold standard network latency target required for 5G and advanced IoT applications. Four key enablers, including plunging sensor costs and the need for real-time processing, are driving this shift toward data processing at the network periphery.

Telcos can leverage existing physical infrastructure, such as the 500 points of edge compute identified by Telstra, to regain bargaining power lost to cloud providers. By adopting one of four specific business models—Edge Hosting, SI Extension, Edge Cloud, or Full Stack—operators can move from being simple enablers to end-to-end providers.

Competitive positioning requires a dense network of localized facilities, as evidenced by Fastly’s 64 strategically located points-of-presence and EDGEDC’s rollout of 20 regional data centres. This infrastructure is critical for managing a value chain that spans devices, edge hardware, connectivity, and orchestration.

Edge Computing – defining the market and business models

Abstract

Key Takeaways

Frequently Asked Questions

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