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Telcos bet on the public cloud for future 5G and data-powered services

Vodafone’s deal with Google is just the latest example of an operator leveraging the power of the cloud hyperscalers – but telco vendors are also embracing the cloud.

The debate around how telcos should take advantage of cloud services has been one of the hottest topics in the industry. It is likely to be a major theme at #MWC21 later this year, which will feature a ‘Cloud City’ for the first time. 

Last month saw Vodafone make a significant move, announcing a new, six-year strategic partnership with Google Cloud with the aim of launching a range of new cloud-based products and services. 

The pair plan to jointly build a new data platform – called ‘Nucleus’ – with the capability of processing and moving huge volumes of data globally from multiple systems into the cloud. The platform will be capable of processing around 50 terabytes of data per day, equivalent to 25,000 hours of HD film. 

Vodafone has already identified more than 700 use-cases. For example, on the network side, the operator says it will be able to precisely match network roll-out to consumer demand, increase capacity at critical times, and use machine learning to predict, detect, and fix issues before customers are aware of them.

There is the potential for public services too, such as the ability to provide governments with anonymised movement data to tackle the spread of diseases such as COVID-19. 

Vodafone is not the only operator shaping its future strategy around the public cloud. In the US, satellite broadcast operator Dish Network claimed to be the first telco in the world to run its entire network in the cloud via a deal with Amazon. Dish will begin deploying its fully-cloud-based 5G Open RAN network in the US later this year using Amazon’s market-leading AWS public cloud. 

As well as hosting all of Dish’s virtual infrastructure and OSS/BSS systems, AWS will also enable the telco’s enterprise customers to develop their own 5G services via private networks. 

“I think telcos increasingly want to move in this direction. They want to have the ability to not have to build and maintain everything themselves,” Amazon CEO Andy Jassy told the Financial Times. He added that the current network architecture approach was “expensive and slower than they’d wish” as telcos look to move into the 5G era. 

These moves appear to present a threat to the traditional telecom equipment vendors such as Ericsson, Nokia and Huawei. 

But these vendors are also placing their strategic bets on the cloud. For example, Ericsson recently extended its partnership with Amazon to offer its BSS portfolio via AWS. 

The vendor believes such as move would offer its telco customers a choice of cloud-based solutions. “When I talk to customers about their cloud transformations, clear patterns are emerging”, says Ericsson’s Mats Karlsson in a blog post announcing the deal. “Service providers want choice. Some are working with private cloud, some are moving towards public cloud and some are embracing a hybrid approach. But they also want choice when it comes to cloud providers”.

Rival vendor Nokia struck a similar deal with Google Cloud in January 

But as we have discussed previously, moving an entire telco’s operations into the cloud is far from straightforward. As Ericsson noted in a recent paper, legacy BSS systems may in some cases be “decades-old” but are still being used by telcos around the world today. This makes a quick switch to a fully cloud-based architecture impossible.

“The challenge for CSPs lies in converting the enthusiasm for all things digital at the top of the organisation into a detailed vision for the entire business,” warned the TM Forum in a recent report. “Without a holistic strategy, cloud migration could fall victim to short-term budgeting decisions.”

But this caution hasn’t dampened the enthusiasm of some of the most zealous advocates of telcos using the public cloud. One of the most vocal has been TelcoDR, the telco cloud consultancy that has taken on Ericsson’s space at #MWC21 to create the ‘Cloud City’. 

“We believe the future of telecom can best be delivered by the public cloud,” said TelcoDR’s outspoken founder, Danielle Royston, in a blog post. “We’re tired of the old guard creating [fear, uncertainty and doubt] about the adoption of cloud technologies that other industries have been benefiting from for years.”

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