Telecommunication operators and hyperscalers continue to meter out the exposure and risk they are willing to take in order to run and hopefully profit from next-generation networks, which has resulted in lines of demarcation between their respective operating parcels. However, work along those lines with services like private 5G networks show fluidity.

Currently, operators commandeer most telecommunication-based interactions with end users, both consumer and enterprise. Much of this comes down to historical connections between those customers and their communication service provider.

But operators are well aware of the impact hyperscalers are having on their 5G network plans.

“I think they already have,” Amy Zwarico, director for cybersecurity in AT&T’s Chief Security Office, said during the recent Telco Cloud and Edge Forum 2023 virtual event. “I mean, just to be blunt about that. I think it will change the way – certainly from an operator perspective – it's going to change the way we do deployments.”

Zwarico noted this impact is also trickling down to the traditional vendor community.

“They're no longer delivering, take for example, 5G core,” she added. “I get the 5G core delivered as microservices, as containers. I'm no longer getting hardware from my traditional vendor who shipped me something to the loading dock that was hardware and software together. It's definitely happened already. … It's the norm … we're gonna see more and more of it.”

But hyperscalers only want to go so far when it comes to commercial wireless services. They are staying away from the financial obligations of buying licensed spectrum, which telecom operators have spent hundreds-of-billions-of-dollars in acquiring, and costs associated with running the day-to-day operations. Instead, they are taking advantage of their cloud infrastructure scale.

“Our goal is, I want to make AWS the best place to run 5G networks,” Jan Hofmeyr, VP for Amazon Web Services (AWS) EC2 said during an interview at that hyperscaler’s re:Invent show late last year. “That is the overarching objective. How can I make AWS, whether we are running it in the region, in a Local Zone, on an Outposts, on a Snow device, how do we make it the best place to run a 5G network, and then provide that infrastructure.”

That sentiment was echoed by Microsoft’s Shawn Hakl, VP of product management for Microsoft.

“We are trying to make sure that we have an optimum customer experience, so we'll be constantly pushing for whatever makes the most sense from a customer access perspective,” Hakl said during the Telco Cloud and Edge Forum. “I don't think that there's a scenario in which, and when Microsoft does this in many industries where we want to run the network on behalf of an operator, I think … it's your customers, it's your network, it's your products. We just like to see it powered by a hybrid carrier-grade cloud.”

Hakl added that ideally this scenario helps both sides.

“I think we have an opportunity to grow the pie together,” Hakl said. “I think this is where the excitement comes in. I will tell you this does involve deploying a lot of technology and securing a lot of data in an extended infrastructure. And that's really where I see the value of the hyperscale platforms come into play.”

One area of expected growth is in private networks, where operators and hyperscalers are both investing to lure deployment and managed service contracts from large enterprises.

Operators are tackling this through their already established connectivity relationships with those enterprises and backed by their extensive licensed spectrum holdings. While many have noted slow uptake so far, they expect this market to prove financially fruitful.

AT&T COO Jeff McElfresh explained during an investor conference last month that the carrier expects its slow roll into the private 5G network and mobile edge compute (MEC) space will begin to pay dividends, though it remains cautious on the near-term impact.

“As we start to see more 5G chipsets getting embedded in edge equipment – not just devices that we use with our hands – I think you’re gonna begin to see a larger, growing revenue stream from the 5G spectrum deployed in the enterprise space with those basic services,” McElfresh said. “[It] doesn’t require a lot of really high science and private networking, for example, to achieve that monetization. I’m encouraged because that’s the trend that I am seeing in the discussions with our largest enterprise accounts.”

The hyperscalers are also starting to inch their way into that space, boosted by their long-standing cloud relationships and the growing influence of quasi-licensed Citizens Broadband Radio Service (CBRS) spectrum band.

Amazon Web Services (AWS), for instance, has its Private 5G Platform that includes its integration of small cell radio units, AWS’ Outposts servers, a 5G core, and radio access network (RAN) software running on AWS-managed hardware.

However, AWS also has offerings that are more operator focused. AWS recently launched its Telco Network Builder service that is targeted at telecom operators or enterprises wanting to deploy private wireless networks with a minimum of network management requirements. It also unveiled its Integrated Private Wireless on AWS platform that acts as an infrastructure bridge for operators that want to offer a private network service tapping into AWS’ infrastructure to end users.

PwC Partner Dan Hays explained during an interview at the MWC Barcelona 2023 event that hyperscalers are likely to keep their distance, at least in the short term, when it comes to competing more broadly with operators.

“They've shown a willingness to go end-to-end, but even then, they're not doing it on their own. They all have partners that are providing help,” Hays said, noting they are “more of a threat” in the private network space. “I don't think anybody sees a hyperscaler as being interested in taking on a true operator role. They would love to be the black box that everything runs on and they'd love to provide as much of the software for it as we move toward more of an open RAN, more of an open architecture for the network.”