Telefónica Germany taps AWS and Nokia for cloud 5G core

Under the agreement, the telco will deploy Nokia's 5G core network software on Amazon Web Services (AWS)'s hardware. An initial 1 million customers are due to be migrated to the new architecture in the first phase of the rollout.

Telefónica claims it is one of the first telcos to undertake a brownfield cloud 5G core network deployment, and says the new infrastructure will usher in a new era of agility and resilience.

"With the launch of the new, cloud-based 5G core network, we are doing pioneering work and are taking a major step in our transformation process," said Mallik Rao, Telefónica Germany's CTIO.

Resources can be allocated depending on demand, and updates and new features can be installed with the click of a mouse, said the operator. In the event of an outage – or if maintenance is required – traffic can automatically be rerouted to other servers without any service disruption.

"This deployment, the first of its kind for an existing communication service provider, enables greater network agility and service offerings, and provides O2 Telefónica with all the tools it needs to efficiently manage and extract greater value from its network assets," said Raghav Sahgal, president of cloud and network services, at Nokia.

Indeed, cloud-native 5G standalone (SA) networks do hold the key to unlocking the technology's full capabilities, including features like slicing and so-on. Whether they hold the key to unlocking revenue growth is an open question.

For Amazon, the deal represents a significant foothold in Europe's telco cloud market.

Operators throughout the continent have been doing deals with hyperscale public cloud providers, but they have generally been concerned with migrating back office functions, hosting applications, or trialling edge services. The day-to-day of operating core and access networks continues to be handled in-house.

Even high-profile greenfield operators, like 1&1 in Germany, are operating fully-virtualised 5G networks on private cloud infrastructure.

Indeed, research firm Dell'Oro last August lowered its growth forecast for cumulative revenues generated by 5G SA workloads hosted on public cloud architecture.

While public cloud is proving itself technically capable of hosting 5G networks, there are other hurdles to do with regulation and data sovereignty that need to be addressed in order to win hearts and minds in the telco industry.

That's precisely what Amazon has been working on.

In October, AWS cut the ribbon on its first European sovereign cloud. Pitched at the public sector and highly-regulated industries, it is designed to meet stringent regulatory, data residency, and operational requirements. It is physically and logically separate from other AWS regions, and the first one of these went live – surprise, surprise – in Germany of all places.

"We're thrilled to be selected for the 5G Cloud Core network deployment of O2 Telefónica and to realise their vision of the network of the future," said Fabio Cerone, general manager telecom EMEA at AWS. "By building their 5G Cloud Core network on AWS, O2 Telefónica is redefining its operating model through full automation and elasticity at scale. It will bring O2 Telefónica the ability to dynamically scale and allocate 5G network capabilities to meet customer needs, as well as the needs of the new applications that will run on top of the new core."

While the official statement doesn't confirm that Telefónica Germany is using AWS' European sovereign cloud, it's a pretty safe bet that it is, and AWS will doubtless take great satisfaction that its effort to assuage concerns about data residency is starting to pay off.