From CapEx to OpEx – Modern Telecom Strategy
The telecom industry is currently navigating a significant shift in its capital expenditure (CapEx) to operational expenditure strategies (OpEx) (shift from CapEx to OpEx), with a marked reduction in investments. The need for heavy upfront infrastructure spending is being reevaluated as the focus moves to more flexible, cost-efficient solutions. This strategic pivot presents telecom operators with opportunities to adopt innovative business models that align with evolving market demands. Specifically, cloud-based video surveillance as a service (VSaaS) and video analytics as a service (VAaaS) provide telcos with scalable, data-driven solutions to enhance service offerings without significant CapEx investment.
Going forward, companies need to prioritize regions that offer an optimal mix of strong uptake potential, solid average revenue per user (ARPU), and manageable infrastructure expenses. Achieving this balance is far from straightforward. Beyond demographic indicators, a wide range of factors must be assessed—such as the total network distance needed, the method of installation (e.g., pole-mounted, existing duct use, or new trenching), backbone infrastructure availability, pricing for labor and materials, and even competitors’ expansion strategies.
As 2023 closed with a noticeable decline in global telecom CapEx, industry experts projected that this trend would continue into the decade. With the peak of 5G adoption behind in many regions and the availability of fiber networks exceeding consumer demand for ultra-high speeds, telecoms are focusing on more efficient ways to allocate capital.
Statistics
This decline in CapEx forecasts from Analysys Mason. It indicates that capital intensity (CapEx/revenue) will decrease from approximately 20% to 12–14% by 2030. While this poses a challenge for network vendors, it opens doors for telecoms to explore new opportunities for service-based models. Such as VSaaS and VAaaS. These services, powered by artificial intelligence (AI) and cloud technology, offer a pathway to profitability through recurring revenues. It is crucial in an era of diminishing traditional telecom investments.
The CapEx Reduction Trend: Strategic Reallocation of Investments
As the telecom industry faces a decline in CapEx, companies are reevaluating their spending strategies and moving towards more flexible operational expenditure (OpEx) models. The focus is on optimizing existing network infrastructure and offering cloud-native services to replace traditional physical infrastructure. This reallocation of capital away from hardware-heavy investments towards software and cloud-based solutions aligns with the growing demand for digital services, including VSaaS and VAaaS.
For example. DU, a telecom operator in the UAE, saw an increase in its operating free cash flow by 28.2% in Q1 2024 despite a reduction in CapEx investments. Their CapEx expenditure for the year was AED 359 million. They focus on 5G coverage, fiber deployments, and the modernization of IT and network infrastructure. This exemplifies how telecoms are moving towards service models and solutions that require less physical infrastructure and more cloud-based delivery.
In addition, network sharing and co-investment strategies, such as those employed by Vodafone Oman. It allows operators to reduce CapEx while continuing to expand network coverage. By leasing infrastructure and engaging in collaborative partnerships, operators can maximize return on investments without shouldering the full burden of network deployment.
These approaches are essential in leveraging video surveillance as a service (VSaaS) and video analytics as a service (VAaaS), allowing telecoms to offer value-added services that are scalable, flexible, and require less initial capital outlay.
Cloud Video Surveillance as a Service (VSaaS): Transforming Surveillance for Telecoms
VSaaS has emerged as one of the most promising services for telecom operators looking to capitalize on the growing demand for video surveillance solutions without the burden of significant CapEx investments. Unlike traditional on-premise systems, which require expensive cameras, storage devices, and continuous maintenance, cloud video surveillance as a service allows businesses to utilize cloud infrastructure for video surveillance needs. This enables telecoms to deliver surveillance services to customers across various industries. They are actively used in retail, logistics, smart cities, and public sector agencies.
By integrating VSaaS into their portfolio, telecoms can offer businesses an easy-to-deploy, secure, and cost-effective alternative to traditional video surveillance systems. The cloud-based nature of VSaaS eliminates the need for businesses to invest in expensive hardware. Moreover it provides them with flexible, on-demand scalability.
The core advantages of video surveillance as a service for telecom operators include:
- Reduced Initial Capital Investment
With VSaaS, telecom operators can reduce the need for physical infrastructure and storage solutions. In long-term it’s lowering the burden of upfront capital expenditures.
- Scalability and Flexibility
Telecoms can easily scale the service up or down based on customer needs, offering flexible payment models. Most used plans are subscription-based plans that allow businesses to pay only for the resources they use.
- Enhanced Customer Support and Remote Access
As surveillance footage is stored in the cloud, customers can access it remotely. It allows them greater convenience and real-time monitoring, no matter their location.
These benefits make cloud video surveillance as a service a compelling offering for telecoms. It helps them to innovate and generate new revenue streams through the cloud in short terms.
Video Analytics as a Service (VAaaS): Unlocking the Power of Data
Video Analytics as a service takes the video surveillance experience to the next level by leveraging AI and machine learning to extract actionable insights from video feeds. Through real-time video analytics, telecom operators can offer customers valuable services. There are the huge amount of demanded cases such as motion detection, facial recognition, anomaly detection, and even predictive maintenance.
In smart city applications, video analytics provides actionable insights that help city officials monitor traffic flow, improve law enforcement response times, and ensure public safety. For instance, AI-powered analytics can track traffic patterns and identify accidents before human operators even notice them, enabling faster intervention.
Another key example is in retail analytics. Retailers can use cloud video analytics to analyze customer behavior in real time, optimizing store layouts, understanding purchasing trends, and improving inventory management. By providing these video analytics capabilities as a service, telecoms can position themselves as key players in the AI-powered solutions market, expanding beyond traditional telecom services.
The core advantages of Video Analytics as a telecom service include:
- Operational Efficiency
Through advanced analytics, operators can help businesses improve their operational workflows. From optimizing staffing levels to ensuring compliance with safety protocols.
- Predictive and Proactive Solutions
VAaaS can help identify potential security threats or operational issues before they arise, enabling customers to take action in real time.
- New Revenue Streams
By offering AI-powered video insights as a service, telecoms can create recurring revenue opportunities while also enhancing the overall customer experience.
With video surveillance and video analytics as a service, telecom operators integrates advanced video analytics into their existing service portfolios. That improves capitalizing on the growing demand for data-driven insights from custom subscribers and business clients.
AI-Driven Data Centers: The Backbone of Cloud Video Services
To enable seamless VSaaS and VAaaS, telecoms need robust, AI-powered data centers. That can handle the large-scale processing and storage demands of video data. The shift towards cloud-native architectures means telecom operators can leverage their existing network infrastructure. Provide these services, reduce the need for costly investments in new data centers.
In fact, according to Dell’Oro Group, global data center CapEx is projected to increase by 11% in 2024, driven largely by new AI applications such as generative AI and AI-powered video analytics. Telecoms that leverage AI-driven cloud platforms are positioned to capitalize on this growth. They offer these services without the need for extensive new hardware investments.
The integration of AI into data center operations also enables telecoms to automate and optimize service delivery. This solution ensures greater reliability and performance for VSaaS and VAaaS offerings. Aipix, for example, integrates seamlessly with AI-powered cloud infrastructures, allowing telecoms to deliver scalable, reliable, and intelligent video surveillance and analytics services to their customers.
From CapEx to OpEx with Aipix: Leading the Future of Telecom Value-Added Services
At Aipix, we specialize in providing cloud-based video surveillance as a service (VSaaS) and video analytics as a service (VAaaS). That are designed tailored to the needs of telecom operators. Our platform allows telecoms to:
- Expand their service portfolios with cutting-edge, AI-powered video surveillance solutions
- Reduce CapEx by leveraging cloud infrastructure instead of costly on-premise systems
- Monetize new revenue streams through subscription-based and data-driven services
Aipix’s cloud-based platform offers telecom operators the flexibility to deploy, scale, and manage video surveillance and analytics solutions. It allows quick and efficient deployment and monetizing, without the need for heavy capital investment.
By partnering with Aipix, telecom operators can access the tools, resources, and expertise necessary to deliver video surveillance and video analytics services. The services meet the growing demand for intelligent video solutions across industries like retail, government, transportation, and smart cities.
Ready to Transform Your Telecom Business with Aipix?
The telecom industry’s shift from CapEx to OpEx is a transformative moment for operators to stay ahead in digital world. By integrating VSaaS and VAaaS into their service offerings, telecoms can unlock new growth opportunities. Expanded portfolio improves operational efficiency, and offer valuable AI-powered solutions to their customers.
Contact Aipix today to learn more about how our cloud-based video surveillance and analytics services can help innovate and expand your revenue streams in the digital age. Together, we can reshape the future of telecom, delivering next-gen services that meet the needs of today’s connected world.
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