The Stranded Asset Crisis: Why Billions in Edge Infrastructure Sit Idle

Executive Summary:

• Telcos have already invested heavily in data centers, MEC, and edge computing. Yet, much of this capacity remains underutilized, generating little or no return.

• Voice, messaging, and data are now low-margin commodities with little pricing power. ARPU growth has stalled globally, while operating costs continue to rise.

• Real-time AI, gaming, fintech, and automation require sub-20ms response times that centralized clouds cannot reliably deliver outside core regions.

• Telcos possess the distributed edge infrastructure, last-mile network control, trusted brands, regulatory approval, and billing relationships with millions of customers to capture this demand.

• Without a monetization layer, the telco edge remains a cost center, not a growth engine. To capture the $400 billion enterprise B2B market, telcos must deploy an operating system that converts existing telco infrastructure into fully packaged, market-ready edge cloud solutions.

Introduction: The Multi-Billion Dollar Miscalculation

For the modern telecommunications executive, the narrative of the last decade has been defined by a relentless, capital-intensive race. Telcos have poured hundreds of billions of dollars into laying fiber, acquiring spectrum, and rolling out 5G networks. In a bid to own the future of connectivity, they have also invested heavily in distributed data centers and Multi-access Edge Computing (MEC). The strategic hypothesis was straightforward: if we build the fastest, most expansive network, the revenue will inevitably follow.

However, as we move through 2026, a harsh reality has set in. The telco revenue model is structurally broken.

While the infrastructure has been successfully deployed, the anticipated windfall has not materialized. Instead, connectivity has commoditized, while capital-intensive edge infrastructure sits underutilized. Telcos find themselves sitting on a goldmine of real estate, power, and proximity to the end-user, yet they are struggling to extract its value. This is the stranded asset crisis. It is a defining challenge of our era, representing billions in stranded infrastructure. But for those willing to pivot from a pure connectivity mindset to an agile, platform-driven approach, it also represents the greatest untapped monetization opportunity in the digital economy.

The Revenue Crisis: Why the Traditional Telco Model is Dead

To understand how we arrived at this inflection point, we must look at the structural degradation of traditional revenue streams. For decades, the telecom industry relied heavily on the consumer (B2C) market. But today, voice, messaging, and data are now low-margin commodities with little pricing power.

According to KPMG’s recent 2025 "Telco to Techco" global study, revenue from traditional telecommunications services has stagnated, with a compound annual growth rate (CAGR) sitting below 1%. This stagnation is driven largely by saturation in the consumer segment, where hyper-competition exerts immense downward pressure on Average Revenue Per User (ARPU). As ARPU growth has stalled globally, operating costs continue to rise. Telcos are caught in a vise: they are expected to continually fund the next generation of network infrastructure while their core revenues have flatlined.

KPMG’s analysis points to a stark conclusion: the traditional business models of telcos are no longer fit for purpose to address new digital opportunities. Operators can no longer simply charge a premium for a faster connection. The consumer expects infinite data at a flat rate, and they are unwilling to subsidize the multi-billion-dollar CapEx required to maintain it.

The era of relying on B2C connectivity as the primary growth engine is officially over. The future of telco profitability lies entirely in the enterprise space.

The Enterprise Imperative: Chasing the $400 Billion Lifeline

With consumer ARPU flatlining, the industry’s gaze has decisively shifted toward the business-to-business (B2B) market. The numbers justify this pivot. According to GSMA Intelligence's late 2024 and 2025 reports, there is a massive $400 billion addressable market for telcos in enterprise technology services by 2030. This staggering figure equates to approximately 35% of the existing mobile operator revenue base worldwide.

However, capturing this $400 billion prize requires a fundamental shift in strategy. The GSMA notes that core telecom solution areas—like SD-WAN, unified communications, and standard mobile data—currently offer very little headroom for growth, with just a 3% CAGR expected through 2030. Conversely, enterprise spending on advanced tech services—including cloud, edge computing, cybersecurity, IoT, and AI—is growing at a 14% CAGR and is valued at over $1.16 trillion.

The message is clear: enterprise demand has shifted, but telcos can't capture it. AI, gaming, fintech, and real-time applications require low-latency, local execution. Telcos possess the raw assets to meet this demand, but they must evolve from being simple connectivity providers to becoming digital service enablers—or "Techcos." They need to offer advanced network solutions, private networks, and end-to-end edge computing capabilities.

The Infrastructure Disconnect: Stranded Assets at the Edge

Despite the clear financial imperative to capture enterprise edge computing revenue, a massive execution gap remains. Telcos have already invested heavily in data centers, MEC, and edge computing. Yet, much of this capacity remains underutilized, generating little or no return.

Why is there such a disconnect between the availability of telco edge infrastructure and its actual utilization?

A February 2025 report from McKinsey & Company on telecom AI infrastructure highlights the issue perfectly. McKinsey identifies "turning unused space and power into revenue" as a critical growth avenue. They note that telcos have vast amounts of underutilized central office space, localized data centers, and power capacity. Hyperscalers, GPU-as-a-Service (GPUaaS) providers, and large enterprises are desperate for immediate access to data center space and power for their operations.

Yet, simply having empty racks, power, and cooling in a regional MEC facility does not make you a cloud provider. Telcos lack the speed, tooling, and product frameworks to monetize this demand.

When an enterprise developer wants to deploy an AI inference workload at the edge, they expect a seamless, API-driven experience. They expect zero-touch provisioning, elastic scaling, and automated billing. They expect a cloud experience. What they often encounter when dealing with a traditional telco is a convoluted B2B sales cycle, manual provisioning processes, a lack of unified APIs, and billing systems designed for monthly mobile phone contracts, not per-millisecond compute usage.

This is the definition of a stranded asset: valuable underlying infrastructure that is entirely inaccessible to the market because it lacks the necessary software abstraction layer.

Physics vs. Hyperscalers: The Untapped Telco Advantage

The irony of the stranded asset crisis is that telcos are perfectly positioned to win the next era of cloud computing. The infrastructure advantage is real, but the monetization gap is structural.

For the past fifteen years, the centralized public cloud model—dominated by hyperscalers like AWS, Google Cloud, and Azure—has dictated enterprise IT architecture. But the next wave of technological innovation is colliding with hard scientific limits. Latency is a physical limit. Real-time AI, gaming, fintech, and automation require sub-20ms response times that centralized clouds cannot reliably deliver outside core regions.

You cannot alter the speed of light. If a factory's autonomous robotic systems require single-digit millisecond latency to prevent a catastrophic collision, sending data back and forth to a centralized hyperscaler facility 500 miles away is unacceptable. Physics and regulation are pushing compute to the edge.

Furthermore, the geopolitical and regulatory landscape has fundamentally shifted. Data sovereignty is non-negotiable. Regulations increasingly mandate local processing of sensitive data, making centralized and foreign cloud models impractical or non-compliant. Governments, healthcare providers, and financial institutions are demanding that their data remain within national—or even regional—borders.

In theory, telcos are perfectly positioned to win at the edge. They have what the hyperscalers covet but cannot easily replicate: distributed edge infrastructure, last-mile network control, trusted brands, regulatory approval, and billing relationships with millions of customers. They have the real estate and the fiber right where the data is generated.

The Monetization Gap: Why Telcos Are Failing to Capture the Edge

If telcos hold all the physical cards, why are they still struggling? What is missing?

The missing element is the ability to rapidly productize infrastructure into revenue-ready edge cloud services—without long internal cycles, heavy integration work, or operational drag.

Building a proprietary, in-house edge cloud platform is a Herculean task. It requires massive software engineering talent, years of development, and ongoing maintenance. By the time a traditional telco builds a bespoke edge orchestration platform, the market has already moved on. Developers are building latency-sensitive applications today, but centralized deployment models cannot keep pace with where users and data reside.

Without a monetization layer, the telco edge remains a cost center, not a growth engine. Infrastructure exists, but revenue requires transformation. Telcos need a way to abstract the complexity of their underlying hardware and present it as a cohesive, easily consumable product to the enterprise market.

Introducing the Monetization Layer: The Operating System for the Edge

To solve this crisis, the industry must look to specialized software platforms that bridge the gap between raw telco assets and enterprise demand. This is precisely where solutions like Swarmio come into play. Swarmio acts as the monetization layer for the telco edge. It is the operating system that productizes the telco edge.

Swarmio converts existing telco infrastructure into fully packaged, market-ready edge cloud solutions. It sits directly above the "Layer 1" telco assets—the edge and MEC locations, regional data centers, network infrastructure, and bare metal and cloud resources.

By acting as a unified control and monetization layer for the telco edge, Swarmio Core addresses the three biggest operational hurdles facing operators today:

1. Unified Global Control Plane: It provides one control plane that orchestrates edge, MEC, data center, and cloud. This is critical for managing fragmented telco assets.

2. Zero-Touch Orchestration: It automates deployment and operations across heterogeneous infrastructure. This eliminates the manual, resource-heavy provisioning that plagues traditional telco B2B services.

3. Built-In Monetization: Pricing, policy, and usage are embedded in the platform. This allows telcos to move away from rigid, static contracts and embrace modern, consumption-based billing models.

By utilizing a platform like Swarmio, telcos can launch new edge cloud services in weeks, not years. They can transition from being a landlord of empty server racks to operating a dynamic, high-margin edge cloud.

Revenue-Ready Verticals: Sovereign AI, Gaming, and Beyond

Once the monetization layer is in place, the telco edge transforms from a generic compute pool into a launchpad for highly specific, high-margin, "Layer 3" revenue-ready solutions. These are packaged, priced, and ready to be sold by telcos.

Instead of trying to sell raw compute—which forces the telco to compete directly on price with AWS or Azure—the telco can sell business outcomes. Swarmio expands into new verticals on a single Core. Every vertical runs on the same Swarmio Core—no re-architecture, no platform sprawl.

Two of the most immediate and lucrative verticals are Sovereign AI and Edge Gaming.

The Sovereign AI Opportunity

AI is becoming a real-time, data-resident workload at the edge. Swarmio AI turns telco edge infrastructure into sovereign, low-latency AI services for enterprises and governments. This is a massive differentiator. By offering AI Inference as a Service—fully managed AI inference on telco-edge GPUs—telcos can capture the enterprise market that demands strict compliance.

Because the data never leaves the telco's local jurisdiction, the offering is sovereign and compliant by design. This aligns perfectly with the growing regulatory push for data-resident AI. Furthermore, telcos can capture usage-based AI revenue, metered directly by Swarmio Core.

The Edge Gaming Opportunity

Gaming is arguably the most latency-critical consumer and B2B application on the planet. Swarmio Gaming is a revenue-generating, latency-critical vertical built on Swarmio Core. It delivers fully productized, monetizable services.

For the B2B market, telcos can offer Game Server Hosting as a Service: low-latency game hosting on the telco edge, fully managed. For the B2C market, they can offer Game Server Rental as a Service, driving new consumer ARPU from low-latency game servers. Furthermore, they can leverage Game Store as a Service, utilizing in-game content stores that convert subscribers into revenue.

By partnering to launch these verticals, partners bring domain expertise and customers, while Swarmio delivers the orchestration, automation, and monetization layer, enabling fast, capital-efficient expansion.

The Commercial Blueprint: Land, Expand, Scale

For C-level executives, technological capability must always map back to a sound commercial strategy. The days of speculative, "build it and they will come" infrastructure projects are over. Telcos require a telco-native commercial model designed for predictable expansion and long-term scale.

The most effective way to deploy a monetization layer is through a highly structured, phased go-to-market strategy: Land, Expand, Scale.

1. LAND (One telco. One solution. One entry point): The initial deployment begins with a single operator and one revenue-ready solution across limited sites or regions. This approach allows for fast validation of performance and monetization. It proves value inside one operating unit.

2. EXPAND (Go deeper inside the same telco group): Once the foundation is validated, the telco can go deeper inside the same telco group. They can activate additional solutions on the same Swarmio Core and roll out across more edge sites and regions. This allows the operator to increase revenue per telco without replatforming. It maximizes value within one telco relationship.

3. SCALE (Replicate across the telco group footprint): Finally, the success is replicated across the broader ecosystem. Telcos can extend deployments to other countries and operating companies, reusing the same platform, processes, and commercial model. This turns one telco win into a multi-region platform rollout.

From an economic perspective, this model fundamentally shifts the financial dynamics of the edge. Revenue streams become layered and robust. Swarmio Core Access Fees provide fixed recurring revenue for mandatory platform access per telco group, without requiring the re-purchase of the core. Site Enablement Fees scale predictably by deployed sites and edge locations, maintaining the same commercial structure across MEC, DC, or edge nodes.

Ultimately, the true exponential upside is unlocked through Usage-Based Fees. By capturing variable revenue tied to solution-specific usage—such as compute, inference, transactions, or workload metrics—the telco's top line grows naturally as demand increases.

Conclusion: Activating the Telco Edge

The telecommunications industry is at a critical juncture. The capital investments of the past decade have created a sprawling, powerful distributed infrastructure. Yet, without the right software abstraction, this infrastructure remains a portfolio of stranded assets.

The $400 billion enterprise B2B market is waiting. Developers building real-time AI, low-latency gaming, and sovereign edge applications are actively searching for the physical proximity that only telcos can provide.

To bridge this gap, telcos must aggressively pivot toward productization. They must implement a unified operating system capable of zero-touch orchestration and automated monetization. By adopting platforms like Swarmio, telcos can finally unlock the value of their existing real estate and fiber, transforming idle capacity into a global, high-margin edge cloud. The assets are already in the ground; it is time to turn them into revenue.

References & Further Reading:

1. McKinsey & Company. "AI infrastructure: A new growth avenue for telco operators" (February 2025). Read Here

2. KPMG. "KPMG 2025 Technology & Telecommunications CEO Outlook" & "Telco to Techco Study" (2025). Read Here

3. GSMA Intelligence. "Telcos eye $400bn enterprise opportunity" (October 2024/2025). Read Here

4. ABI Research. "Unlocking the Mobile Private Networks Opportunity" (2025). Read Here

5. Swarmio Inc. Proprietary Technology: Patented Predictive Orchestration (US 11,063,881 B1).