Amazon dials in Telefonica, enters telecom market
Telefonica Germany will move one million 5G customers to Amazon Web Services (AWS) cloud later this month, company executives told Reuters , in a bold move by the US online retailer to break into the global telecom market.
While some telecom networks have moved IT and other non-core operations to the public cloud, the move by the subsidiary of Spanish group Telefonica is a global first where an existing mobile operator is switching its core network to a public cloud.
Big cloud-computing services firms such as Amazon and Microsoft have been trying to move more into the telecom sector, lured by billions of dollars in potential revenue, but operators have been wary of the capability of public clouds in handling 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% of my customer base by 2025-2026,” said Mallik Rao, chief technology and information officer at O2 Telefonica, also known as Telefonica Germany.
The company has 45 million customers in Germany.
AWS and O2 Telefonica did not disclose financial details of the deal.
The core network, which consists of high-performance servers in data centres, is the heart of a mobile network that securely routes data and calls at high speeds.
A public cloud will cut costs, increase scale and allow repairs to be done without service disruption.
“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,” said analyst Paolo Pescatore at PP Foresight. “We will hear the word ‘frenemy’ used a lot more.”
US-based Dish, which built its mobile network from scratch, became in 2021 the only telecom company to use AWS cloud for its core network.
“Dish was much easier because they had no existing systems that had to be modified to work with the cloud,” AWS vice president Jan Hofmeyr said in an interview.
Nokia, which also worked with Dish, will provide the software and AWS will provide its infrastructure for Telefonica Germany.