Telecom Cloud Market - By Component (Solution, Service), By Deployment Model (Public, Private, Hybrid), By Service Model (SaaS, PaaS, IaaS), By Application (Network Function Virtualization, Software-defined Networking, Content Delivery Networks), By Organization Size, Forecast 2024 – 2032

Telecom Cloud Market - By Component (Solution, Service), By Deployment Model (Public, Private, Hybrid), By Service Model (SaaS, PaaS, IaaS), By Application (Network Function Virtualization, Software-defined Networking, Content Delivery Networks), By Organization Size, Forecast 2024 – 2032

Telecom Cloud Market Size

Telecom Cloud Market was valued at USD 27.1 billion in 2023 and is anticipated to grow at a CAGR over 19.5% between 2024 and 2032. The proliferation of smartphones, IoT devices, and bandwidth-intensive applications is leading to data traffic growth, significantly boosting the telecom cloud industry. As users increasingly demand faster & more reliable connectivity, telecom operators need to leverage cloud technologies to efficiently manage and scale their networks, ensuring seamless connectivity and a superior user experience.

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Telecom operators face intense competition and pressure to optimize costs while delivering superior services. Telecom cloud solutions enable operators to reduce capital expenditures by replacing dedicated hardware with virtualized network functions running on commercial off-the-shelf hardware. Cloud technologies also facilitate automation, orchestration & self-service capabilities, leading to streamlined operations, improved efficiency, and reduced operational costs.

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Engaging with cloud service providers can lead to vendor lock-ins, where an operator becomes dependent on a specific provider's technologies and services. This dependency can limit flexibility and hinder the operator’s ability to switch providers or integrate with other systems, thereby limiting the telecom cloud market growth. Interoperability challenges can also arise when integrating different cloud platforms or legacy systems. Telecom operators should carefully select their vendors, evaluate interoperability capabilities, and adopt open standards & APIs to mitigate these challenges.

COVID-19 Impact

The pandemic forced many businesses to accelerate their digital transformation efforts to adapt to remote work and virtual operations. Telecom operators turned to cloud-based solutions and services to support businesses in their transition. This led to increased adoption of telecom cloud technologies for remote collaboration tools, cloud-based communications, and virtualized network functions. Telecom cloud technologies played a crucial role in ensuring the availability & scalability of network resources to support increased data traffic and remote collaboration. This led to an increased demand for cloud-based applications, Software-as-a-Service (SaaS), and Infrastructure-as-a-Service (IaaS) solutions. Moreover, telecom operators provided the necessary network infrastructure and connectivity to support these cloud-based services.

Telecom Cloud Market Trends

Telecom operators are embracing multi-cloud strategies to leverage the benefits of different cloud service providers. Instead of relying on a single cloud platform, operators use multiple cloud providers for specific purposes such as IaaS, PaaS, or SaaS. This approach allows operators to optimize costs, gain access to specialized services, and avoid vendor lock-in. It also provides flexibility and resilience by distributing workloads across multiple clouds.

Telecom Cloud Market Analysis

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Based on component, the market is segmented into solution and service. The service segment held a market share of over 35% in 2023. The service segment includes professional service and managed service. With the increasing complexity of telecom cloud environments, the demand for professional and managed services is growing. Telecom operators are leveraging the expertise of service providers to ensure smooth implementation, optimize performance, and address security & compliance challenges. The growing reliance on service providers for efficient operations and cost optimization is fueling the service component segment progress.

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Based on application, the telecom cloud market is divided into Network Function Virtualization (NFV), Software-Defined Networking (SDN), Content Delivery Networks (CDN), and others. The network function virtualization segment accounted for over USD 4.5 billion in 2023. NFV allows telecom operators to replace dedicated hardware appliances with virtualized network functions running on standard servers. This shift helps reduce capital expenditures (CapEx) by eliminating the need for specialized hardware.
 

Additionally, NFV enables operators to achieve operational efficiencies through centralized management, automation, and orchestration of network functions. NFV facilitates the implementation of redundancy and failover mechanisms in the network. By virtualizing network functions and distributing them across multiple servers or data centers, operators can enhance network resilience and ensure service continuity in case of failures or disruptions.

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The North America telecom cloud market is expected to grow at a CAGR of around 18% during the forecast period. The North America market is growing as the region houses a highly developed telecom industry with established telecommunications operators and service providers. These entities are actively embracing telecom cloud solutions to improve their network capabilities, enhance service delivery, and optimize operational efficiency. The increasing adoption of emerging technologies, such as 5G, the Internet of Things (IoT), and Artificial Intelligence (AI), in North America is fueling the demand for telecom cloud services. These technologies require a robust and agile network infrastructure, which can be efficiently achieved through the deployment of telecom cloud solutions.

Telecom Cloud Market Share

Major companies operating in the telecom cloud industry include,

• AWS
• Cisco
• Ericsson
• Fortinet
• Google
• Huawei Technologies Co.Ltd.
• IBM Corporation
• Juniper Networks Inc.
• Microsoft Corporation
• Nokia
• Oracle Corporation
• Orange
• Salesforce
• Verizon Communication
• VMWare

Telecom Cloud Market News

• In January 2023, Tech Mahindra and Microsoft announced a strategic collaboration to provide cloud-powered 5G core network modernization for telcos worldwide. Telcos will be able to build 5G use cases and satisfy customer demands in the rising Virtual Reality (VR), Augmented Reality (AR), edge computing, and IoT industries owing to the 5G core network transition.

The telecom cloud market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments

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By Component, 2018 – 2032

• Solution
• Service
  • Professional service
  • Managed service

By Deployment Model, 2018 – 2032

• Private
• Public
• Hybrid

By Service Model, 2018 – 2032

• Software-as-a-Service (SaaS)
• Platform-as-a-Service (PaaS)
• Infrastructure-as-a-Service (IaaS)

By Organization Size, 2018 – 2032

• Large enterprises
• SMEs

By Application, 2018 – 2032

• Network Function Virtualization (NFV)
• Software-defined Networking (SDN)
• Content Delivery Networks (CDN)
• Others

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Benelux
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • Singapore
• Latin America
  • Brazil
  • Mexico
• MEA
  • GCC
  • South Africa

Frequently Asked Questions (FAQ)

What is the telecom cloud market worth?

Telecom cloud industry size was USD 27.1 billion in 2023 and will record over 19.5% CAGR between 2024 and 2032 due to the rising proliferation of smartphones, IoT devices, and bandwidth-intensive applications worldwide.

Why is the demand for telecom cloud services growing?

The service component segment held over 35% of the telecom cloud industry share in 2023 driven by the growing complexity of telecom cloud environments and the higher demand for professional and managed services.

What is the value of the North America telecom cloud market?

North America telecom cloud industry share is estimated to witness 18% CAGR from 2024-2032 owing to the well-established telecommunications operators and service providers in the region.

Which are the major telecom cloud industry players?

AWS, Cisco, Ericsson, Fortinet, Google, Huawei Technologies Co., Ltd., IBM Corporation, Juniper Networks Inc., Microsoft Corporation, Nokia, Oracle Corporation, Orange, Salesforce, Verizon Communication, and VMWare are some key telecom cloud companies.