AT&T announced an agreement on Thursday to move its 5G cloud network to Microsoft’s cloud. The migration starts with the 5G core network and includes a path for all of AT&T’s mobile network traffic to be managed using Microsoft Azure.
The deal represents Microsoft Azure’s first major win in the telecom market. The newer generation of networks, which AT&T began rolling out in 2018, is designed to rely more heavily on software and data centers for routing traffic rather than telecommunications specific gear.
Andre Fuetsch, AT&T’s chief technology officer, said that shifting to a public cloud vendor will let AT&T take advantage of a larger ecosystem of software developers who are working on technologies such as wringing more use out of pricey 5G spectrum or creating new features for users.
“That’s what we at AT&T want to do, and we think working with Microsoft gives us that advantage,” Fuetsch added.
The deal builds on a 5G partnership formed by the two companies in 2019 and is a big win for Microsoft’s Azure division as it tries to sell more cloud services worldwide.
“With Azure, operators can provide a more flexible and scalable service model, save infrastructure cost, and use AI to automate operations and differentiate customer offerings,” said Jason Zander, executive vice president Azure, Microsoft.
“Through our collaboration with AT&T, Microsoft will expand its telecom portfolio to support operators with a carrier-grade cloud that provides seamless experiences across Microsoft’s cloud and the operator’s network,” he added.
For Dallas-based AT&T, the third-largest wireless provider, the move helps reduce operating costs. The carrier will continue to run its network using Microsoft for the 5G cloud operations.
Dish Network made a similar deal in April to have Amazon run its core 5G network.
“This deal is not exclusive, so I fully expect Azure will try to assert itself as the telecom cloud provider for many carriers around the world,” said Roger Entner of Recon Analytics
Cloud services are dominated by technology companies such as Microsoft, Amazon and Google. Wireless carriers including AT&T and Verizon Communications have partnered with the tech companies to help merge 5G connections with cloud computing.
According to the GSMA, operators are expected to spend $900 billion worldwide between 2021 and 2025 in mobile capital expenditures (CapEx), roughly 80 percent of which will be in 5G and much of it could run on cloud infrastructure.
Operators moving to the cloud can save on hardware and development, benefit from cloud-enabled automation and data analytics, and manage real-time responses and peak traffic on demand. The delivery of new services can be accelerated through cloud-driven AI and IoT.