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The global telecom cloud market size was valued at USD 15.18 billion in 2022. The market is projected to grow from USD 18.81 billion in 2023 to USD 97.07 billion by 2030, exhibiting a CAGR of 26.4% during the forecast period.
Telecom cloud is a cloud infrastructure for telecommunication services with next-generation network architecture. It is a visualized network that helps in delivering communication services. The rise in digital transformation is expected to drive the demand for cloud-based communication. Also, increasing mobile users drives private cloud demand in the telecommunication sector. Similarly, advanced cloud communication with 5G technology is expected to boost demand for telecom cloud. For instance,
Some of the key software included in the market study are Open Telekom Cloud, Huawei Telco Cloud Solution, Cisco Telco Cloud, VMware Telco Cloud Service Assurance, AWS for Telecom, IBM Cloud Pak, and Oracle Cloud for Telcos, among others.
Growing Popularity of Hybrid & Remote Working Amid COVID-19 Pandemic Propelled Market Growth
The outbreak of the COVID-19 pandemic has upended industrial operations and organizational work. The rise in remote working employees using conferencing and communication collaboration services increased network traffic. Amid the pandemic, the demand for robust and efficient architecture in the telecom industry has surged. According to the TeleNet data, 71% of U.S. employees were on hybrid or remote work models during the pandemic, thus driving the telecom cloud demand.
However, the pandemic obstructed the 5G infrastructure implementation plans across industries. Still, post-pandemic, the work gained exponential traction. The rise in demand for reliable, faster, and secure communication solutions propels the telecom cloud market growth. Similarly, post-pandemic, the market is expected to show significant growth considering its applications and capabilities. Thus, the COVID-19 pandemic fueled the market share due to its remote worker rise.
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Rise of Cloud-native in the Telecommunication Industry to Drive Market Growth
The rapid growth in the industry and other technologies is expected to fuel the demand for cloud-native network functions. The lesser automation and agility with the cloud through traditional virtual network functions impacts its effectiveness. Thus, cloud-native with open-source software offers reliable cloud communication. Delegated governance, disposability, system immutability, independent lifecycle, and more provide successful cloud services.
Furthermore, 5G technology and cloud-native network function have offered a game-changing experience and various opportunities for the telecommunication industry. Companies are largely investing in understanding the technology thoroughly and its applications in the sector. This is expected to boost the telecom cloud market share.
Increasing 5G Technology to Drive Market Growth
The 5G rollout is growing at an exponential rate across the globe. With its next-generation cellular network, the technology offers the potential to revolutionize the telecommunication sector. According to the PWC and CTIA report, U.S. operators invested up to USD 275 billion. The assured low latency and higher speed capabilities of 5G are expected to boost the demand for the cloud. This is expected to create various opportunities for service providers and end-users. For instance,
Thus, considering operational perspective and customer requirements, unified communication services, and cloud computing is expected to gain efficiency with 5G, along with its improved cloud availability and benefits of cloud communication. Thus, the rise in 5G pushed the market growth.
Potential Risk in Data Security to Hamper Market Growth
The cloud expansion of the telecommunication sector might increase the risk of cybersecurity. This increases additional complexities for the vendors and operators. The technology contains robust data that can get compromised by a single error in the security system. Thus, industries must adhere to strong security solutions and vigilantly address each alert. The risks, such as inside threats, third-party risks, and more, are increasing globally. For instance,
Thus, rising threats are expected to hamper the market growth.
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Rapidly Changing Digital Technology to Boost Public Cloud Demand
The market is segmented based on deployment model into private, hybrid, and public.
Public segment to hold the highest market share during the forecast period. Its scalability and flexibility to meet the constantly changing business needs are expected to drive its adoption.
Hybrid segment to grow at a significant CAGR during the forecast period owing to its capabilities of offering both the public and private cloud. According to the 2022 report of Flexera, 80% of multi-cloud enterprises are approaching hybrid infrastructure. Also, increasing desktop virtualization is expected to propel hybrid cloud demand.
Private to gain steady growth rate owing to higher assurity of data security.
Large Customer Base to Propel Large Enterprises Investments in the Market
Based on enterprise type, the market is bifurcated into large enterprises and small & medium enterprises.
Large enterprises segment to gain dominant segment share during the forecast period. The demand for more data storage, computation, efficient mobile network, and more is driving the demand for cloud across large enterprises.
Small & medium enterprises segment is expected to witness rapid growth rate, owing to the rise in new opportunities and avenues of exploration. With the rising demand for unified communication and a higher focus on cloud technology, small and medium enterprises are keen on investing in the solution.
Rising Demand for Enhanced Communication Services to Fuel Virtual Network Function Demand
Based on function type, the market is categorized into Virtual Network Function (VNF) and Cloud-Native Network Function (CNF).
Virtual network function segment to hold the largest market share during the forecast period owing to its capabilities to provide improved communication. The industries invest in this function to enhance vendor independence with lower energy consumption.
Cloud-native network function is expected to witness rapid growth rate. It has been significantly deployed along with VNF to offer easy orchestration and scalability. This is expected to boost the telecom cloud market growth.
Easy Access to Flexible Software to Drive SaaS Demand
By service type, the market is categorized into Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS).
Software-as-a-Service to gain the largest segment share during the forecast period. Its built-in software-defined services help in digitizing enterprise operations. The SaaS helps lower the complexities in cost-effective ways. Thus, businesses are significantly investing in technology.
Infrastructure-as-a-Service to showcase rapid growth rate during the forecast period. The technology helps with flexible infrastructure with minimal cost.
Similarly, the platform-as-a-service segment showcases a steady growth rate considering its real-time ready-to-use capability.
North America Telecom Cloud Market Size, 2022 (USD Billion)
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North America to gain dominant revenue share during the forecast period, owing to the rapid growth in 5G technology adoption. The presence of the key telecom industry and top cloud computing players is expected to bolster the market growth in the region during the forecast period. The U.S. is expected to gain maximum segment share owing to increasing and rapidly changing digital data.
Asia Pacific will witness rapid growth rate during the forecast period. The increasing mobile audience is expected to propel market growth in China and India. With growing opportunities after the 5G rollout in India, the telecommunication service and infrastructure providers are keen on addressing the cloud. This is expected to boost the country's digital transformation and build a strong economy, thus boosting the Asia Pacific market. Similarly, in South Korea, various collaborations are taking place in the telecommunication sector, owing to future opportunities.
The Middle East & Africa to gain significant growth rate after Asia Pacific. The focus is on digitalization and advanced communication to boost market growth. Europe to showcase a steady growth rate due to rising business opportunities and increasing digital customers.
South America will grow steadily due to various foreign investments in the telecom industry. For instance, in May 2023, China Telecom introduced eSurfing cloud services in Brazil in collaboration with its subsidiary China Telecom do Brasil (CTB). The expansion of cloud solutions and the sector is expected to boost the market share.
Partnership and Strategic Engagement by Key Players to Propel Market Growth
Key market players are significantly entering into strategic partnerships with telecommunication providers and cloud companies. Through this strategy, the players gain capabilities to help offer enhanced and efficient client solutions. The players invest in research & development to understand future needs and technological advancements. Market players are introducing new solutions for clients across the globe that help in the integration of 5G technology, accelerate customer satisfaction, and boost revenue generation.
February 2023: Google LLC introduced three unified cloud solutions for the telecommunication industry, telecom data fabric, telco subscriber insights, and telecommunication network automation. The new telco cloud products aim to support communication service providers with hybrid cloud principals, helping collect data and improving customer experience.
June 2023: Nokia Corporation strategically announced a collaboration with Red Hat, Inc. to integrate open-source solutions such as Red Hat OpenShift and Red Hat OpenStack Platform into its network application. The collaboration supports Nokia testing and development, and the Red Hat cloud offers flexibility and deployment options.
An Infographic Representation of Telecom Cloud market
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The research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading product types of telecom cloud. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.
CAGR of 26.4% from 2023 to 2030
Value (USD Billion)
By Deployment Model, Enterprise Type, Function Type, Service Type, and Region
By Deployment Model
By Enterprise Type
By Function Type
By Service Type
The market is projected to reach USD 97.07 billion by 2030.
In 2022, the market was valued at USD 15.18 billion.
The market is projected to grow at a CAGR of 26.4% during the forecast period.
The software-as-a-service segment is expected to lead the market.
Growing 5G technology is driving market growth.
VMware, Inc., IBM Corporation, Telefonaktiebolaget LM Ericsson, Cisco Systems, Inc., Google LLC, Huawei Technologies Co., Ltd., Amazon Web Services, Inc., and Microsoft Corporation are the top players in the market.
North America is expected to hold the highest market share.
By deployment model, the hybrid segment is expected to grow with a remarkable CAGR during the forecast period.
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