Telefonica Germany has revealed plans to migrate one million of its 5G customers to Amazon Web Services (AWS) cloud later this month, Reuters news report said.
While some telecom networks have previously shifted non-core operations to the public cloud, this initiative by Telefonica marks a historic first, where an established mobile operator is transitioning its core network to a public cloud infrastructure.
Major cloud-computing service providers like Amazon and Microsoft have been eyeing opportunities in the telecoms sector, drawn by the potential for substantial revenue streams. However, operators have been cautious regarding the capability of public clouds in effectively managing a mobile network.
“I want to see it working for at least one to two quarters and have a roadmap to move at least 30-40 percent of my customer base by 2025-2026,” commented Mallik Rao, Chief Technology & Information Officer at O2 Telefonica, also known as Telefonica Germany, which boasts 45 million customers in Germany.
Financial details of the deal between AWS and O2 Telefonica remain undisclosed.
Canalys expects spending on cloud infrastructure services will increase by 20 percent in 2024, compared with 18 percent growth achieved in 2023. In 2023, total cloud infrastructure services spending reached $290.4 billion from $247.1 billion in 2022.
AWS (31 percent), Microsoft (26 percent) and Google Cloud (10 percent) are the leading Cloud service providers in the world in Q4 2023.
The core network, comprising high-performance servers housed in data centers, serves as the central nervous system of a mobile network, facilitating secure data and call routing at high speeds. Transitioning to a public cloud infrastructure is anticipated to reduce costs, enhance scalability, and facilitate repairs without service disruptions.
“As the network becomes more defined by software, traditional players need to up the ante to keep up with the threat of the big tech,” remarked analyst Paolo Pescatore at PP Foresight.
Telecom operators will invest over $200 billion in Cloud network services over the next four years to meet demand for cellular data, according to Juniper Research.
Furthermore, the move by Telefonica Germany echoes the successful utilization of AWS cloud by U.S.-based Dish, which constructed its mobile network from the ground up and became the sole telecom company utilizing AWS cloud for its core network in 2021.
“Dish was much easier because they had no existing systems that had to be modified to work with the cloud,” noted AWS vice president Jan Hofmeyr in an interview.
Nokia, a key player in the telecom infrastructure market, will provide the software while AWS furnishes its infrastructure for Telefonica Germany’s cloud migration.
“The cloud players continue to get better … and building more credibility with the operators to be able to move network functions into the cloud,” stated Raghav Sahgal, president of cloud and network services at Nokia.
Telefonica initially collaborated with AWS and Ericsson before switching to Nokia and AWS, signaling a decisive shift from trial phases to implementation.
The global telecom cloud market is projected to soar to $108.7 billion by 2030 from $19.7 billion in 2021, presenting significant growth prospects for companies like Amazon.
