Telecom Industry Capitalizes on Cloud in the 5G Era

Telecom providers are racing to strengthen their foothold in the lucrative telco cloud market. U.K.-based telecom giant BT aims to launch its most-awaited unified BT network cloud globally in 2021. Will this change BT’s market position worldwide?

In today’s hyperconnected world, cloud computing is the underpinning technology which the telecom industry must capitalize on. It has played an instrumental role in network function virtualization (NFV), mobile edge computing, 5G networks, Wi-Fi, and other emerging telecom technologies. 

Since the world is at the brink of the 5G era, which can power almost every industry such as healthcare, gaming, autonomous vehicles, retail, supply chain, and manufacturing, it has gauged the interest of several cloud vendors. In fact, hyperscale cloud providers are changing the face of the telecom industry.

Hyperscale cloud providers, including Amazon, Microsoft, Google, and Alibaba, want to gain market share in the telecom industry and grow their revenues. From partnerships to mergers and acquisitions, cloud giants have strategically strengthened their foothold in the telecom market. 

Mrinal Agrawal, a telecom industry professional, saidOpens a new window , “Cloud providers have modified their existing strategies to cater to the developments in the telecom industry and updated their offerings to aid the operators in their digital transformation journey, migrating their data centers, and associated workloads to the cloud, and implementing and monetizing 5G.” 

Significant partnerships and acquisitions include:

• Microsoft and AT&T’s partnership for 5G, cloud, and edge computing solutions in 2019.
• AWS’s collaboration with Verizon, Vodafone, Telefonica, KDDI, and SK Telecom to develop edge computing services on 5G networks in 2019.
• Google and AT&T’s partnership to deliver 5G edge computing solutions in 2020.
• Microsoft’s acquisition of two 5G-centric companies, Affirmed Networks and Metaswitch, in 2020.

These mergers and partnerships have changed the telecom landscape, and now more telcos have realized the potential of cloud. Hyperscale cloud providers have delivered several offerings to the telecom industry, such as modernizing telco applications with the latest technologies (AI, IoT, and big data), hosting application workloads, and providing infrastructure platforms for cloud migration. 

Also Read: How Is Cloud Computing Revolutionizing the Telecom Industry?

Telecom Industry Continues To Rely on Cloud Technology

Cloud adoption has brought significant business value and revenue to telecom companies. Realizing the value of cloud, several telcos are now shifting their interest to develop a cloud-dependent telco network. According to the ABI Research reportOpens a new window , telcos are planning to replace virtual machines with containers and opt for cloud-native functions. These factors are projected to drive the global telco cloud revenue to $29.3 billion by 2025.

Investing in the lucrative telco cloud market, U.K.-based telecommunications company BT has moved its focus from virtual network functions and virtual machines to focus on cloud-native and containers. The company is building its converged network called BT Network Cloud and plans to deploy it globally by 2021. 

BT Network Cloud integrates BT’s wireless, wireline, Wi-Fi, 5G, mobile services, and applications onto a unified cloud platform. The company also combines and deploys its discrete network functions on a cloud infrastructure, which then can be utilized across BT’s U.K. and global footprint. With a single cloud-driven network infrastructure, the company plans to deliver a broader range of services faster and efficiently to its customers in the U.K. and worldwide.

To date, BT Network Cloud nodes have been utilized in the U.K., and even the company’s 5G network core, content delivery network (CDN), and apps are currently deployed on its cloud platform.

BT has been working on the development of its network cloud for a long time. In June 2019, the telco company inked a partnershipOpens a new window with Juniper Networks to deliver its network cloud infrastructure initiative. Under this partnership, Juniper Networks created a common framework for BT to deliver various services and internal applications across different business verticals. The company also invested in various Juniper products to manage the network cloud, including the Contrail networking platform, AppFormix monitoring software, and QFX series ethernet switches.

The company is still deciding whether it wants to build the network on public cloud or within their infrastructure. Neil McRae, the chief architect at BT, saidOpens a new window , “Right now, we probably haven’t fully decided on that because there are lots of advantages to doing the public cloud for us. But there are some downsides, as well, which is that they (cloud providers) don’t have all the feature functionality that we need, although Google Anthos is close.” 

While there have been several telco-cloud partnerships, McRae has deflected from the idea of multiple cloud partnerships.

McRae questioned, “How do you ensure that you’re able to really manage services across multiple cloud providers? Something that we tend to see as one service or application on one cloud provider now splitting across many, it just becomes hard to manage all the details. The hyperscalar play in the telco space is going to be one of those interesting developments throughout next year.”

Cloud computing has a substantial impact on the telecommunication industry. Cloud technology can bring in new revenue streams for telecom providers, from smooth business operations and edge infrastructure to automated network operations and virtualization technologies. With BT’s strategic shift to cloud-native technologies, it is a smart decision to make a switch from legacy virtual network functions (VNFs), virtual machines to cloud containers, cloud-native technologies and deliver faster network solutions and services such as IoT, virtual reality, 5G, and online gaming to customers.

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