The telecoms industry relies on cloud computing services to provide on-demand platforms and infrastructure. This lets it quickly scale out new services to meet changing customer demands without the hassle of having to re-tool on-premises architecture or re-skill its IT workforces.
In particular, the rollout of hyper-fast, wireless 5G networks by all service providers means they increasingly need the capacity to add new functionality in order to deal with the new workload and types of data transfer that are becoming possible. No one wants to look like they are lagging when it comes to giving their customers the tools to become the next Uber, Spotify, or Netflix!
It’s because of this that cloud has become vital to the operations of telecom companies in recent years. Last year, Vodaphone partnered with Google to move all of its data and data processing operations to the Google Cloud, While AT&T announced that Microsoft would take on the management of all of its 5G network traffic via its Azure service. Even more recently, at Mobile World Congress last month, Telefonica announced that it is expanding its partnership with Amazon Web Services. While Telefonica will leverage AWS infrastructure to provide it with capacity and scalability for its own data operations, its Telefonica Tech subsidiary will take solutions including private 5G networking and edge computing to market for its own customers.
Why cloud computing?
Whereas traditionally, telecoms companies offered voice and data services to homes and businesses, today they need to diversify in the face of competition (Ironically, including from cloud service providers themselves!) Mobile, social media, and newer tech trends, including artificial intelligence (AI), virtual reality (VR), and the internet of things (IoT) mean the ways that customers are generating, sharing, and consuming information are constantly changing. Service providers (including telecoms companies) have to anticipate these changing behaviors in order to create new experiences and innovations.
Of course, as with all things tech-related, the tumultuous world events of the past two years have helped to cement this trend. The global coronavirus pandemic hugely accelerated the speed with which we were moving more and more of our activities into the online domain. We increasingly work, play, socialize and communicate through digital channels, and telecoms companies play their part in making this possible. Telecom services are more essential now than ever while we shop, run our businesses, and even receive medical care. All of this is made possible by cloud technology.
And one benefit of cloud that can’t be overstated is the part it plays in helping companies, including telecom service providers, to meet climate and emissions targets. Operating IT infrastructure is often one of the biggest ways a company burns through energy and generates carbon emissions. Because all of the big cloud service providers are working towards achieving zero emissions, by moving their own infrastructure into the cloud, telecom companies can instantly improve their own contribution towards saving the planet!
In fact, according to AWS VP for the global telecoms industry, Adolfo Hernandez – who recently joined me for a conversation – companies that run their apps on AWS, rather than an on-premises data center, reduce their carbon footprint by an average of 88%.
5G in the cloud
Hernandez tells me there are a number of quantum leaps in functionality provided by 5G – in comparison to other mobile or cable networks – other than the simple increase in speed and capacity. One of these is the ability to virtualize network functions. He says, “We get a true disassociation between hardware and software … and now you can run some of these 5G network functions that are a part of the 5G cores and do that in a cloud-native way.
“And when you do that, you take advantage of the benefits the cloud provides, in terms of scalability, lower costs, fault tolerance, high performance – the agility you get when you deploy in the cloud and the faster time to innovation.”
Overall, Hernandez tells me, cloud can now be seen to be having the same transformative impact in the telecom industry that it has already had across much of the IT sector – increasing simplicity, enabling more agile operational practices, and reducing time to market for new products and services.
“This is stuff that’s already happening,” he says, “It’s not science fiction … it’s a collection of benefits .., we saw them in IT, and we’re going to see them on the network side of the telecommunications industry as well.”
The rapid spread of IoT – connected devices that are proliferating through our homes, workplaces, and wider society, such as smart cities – also relies on telecom services for connectivity infrastructure. In order to manage these devices – around 30 billion by 2025 – service providers will also need to take advantage of the scalability and flexibility offered by cloud.
Hernandez and I were also fortunate to be joined by Maria Jesus Almazor, CEO for Cybersecurity and Cloud at Telefonica Tech. She was able to give us the benefit of a telecommunications executive’s perspective on the dramatic wave of change that’s sweeping through the industry thanks to the mass adoption of 5G and cloud:
“Without any doubt, going to the cloud is the first step to digital business transformation,” she says.
It’s quickly becoming clear that telecom service providers are uniquely placed to take advantage of the opportunities offered by cloud. As owners of the networks used to deliver a new generation of data-powered apps into homes and businesses, they have the chance to build new partnerships both with the organizations that provide the apps and with the customers themselves who pay them directly. Understanding this new and evolving market dynamic is likely to be the key to unlocking the value of 5G and cloud to their own organizations too.