Report: Telefonica Deal Puts Amazon in Europe’s 5G Market

Telefonica Germany is reportedly moving 1 million 5G customers to the Amazon Web Services (AWS) cloud.

The deal marks the first time in which an existing mobile operator is switching its main network to a public cloud, Reuters reported Wednesday (May 8).

Cloud giants like Amazon and Microsoft have been working to expand into the telecom space and its billions of dollars in potential revenue, although operators have been reluctant to trust their mobile networks to a public cloud, the report said.

“I want to see it working for at least one to two quarters and have a roadmap to move at least 30-40% of my customer base by 2025-2026,” said Mallik Rao, chief technology and information officer at Telefonica Germany, a subsidiary of the larger Spanish company Telefonica, per the report.

The telecom has 45 million customers in Germany, the report said, adding that terms of the deal were not disclosed.

The core network, made up of high-performance servers in data centers, drives a mobile network that securely routes data and calls at high speeds, according to the report. A public cloud will reduce costs, increase scale and allow repairs to be made without disrupting services.

“As the network becomes more defined by software, traditional players need to up the ante to keep up with the threat of the Big Tech,” Paolo Pescatore, an analyst at PP Foresight, told Reuters. “We will hear the word ‘frenemy’ used a lot more.”

PYMNTS Intelligence’s “Generative AI Tracker®” examined the way that 5G adoption dovetails with the way telecoms are actively integrating generative artificial intelligence into their operations.

Eighty-seven percent “of telecom executives acknowledge the potential of AI and machine learning to positively impact both customer experience and customer relationship management, while 67% believe generative AI can improve IT service provision,” PYMNTS wrote in March. “Additionally, legacy providers are partnering with technology incumbents to develop generative AI solutions that can streamline operations and enhance customer service as well as enhance network performance and personalize user experiences.”

Meanwhile, several countries are either considering, deploying or on the verge of deploying 5G infrastructure, from smaller nations like Fiji and Samoa working with Nokia, to major players like China and the United States showing progress on the 5G front.