SK Telecom and Deutsche Telekom this week created a joint venture to develop 5G technologies, including a 5G repeater, in-building equipment, and technologies for media transport and low latency media streaming. SK Telecom also invested $30 million in Deutsche Telekom Capital Partners’ second venture and growth fund, which has raised $350 million to invest in software companies.

The joint venture underlines a growing trend among network operators that want to wrestle some control away from incumbent infrastructure vendors and design networks around their unique interests. “Telcos are taking more control over their own destiny,” Chris Antlitz, principal analyst at Technology Business Research, told SDxCentral in a phone interview.

Whereas vendors like Ericsson, Huawei, and Nokia used to be the primary channel for new technologies and business models, virtualization and digital transformation efforts are catapulting the larger operators into a leading role with more ownership and control around those aspects of their business, Antlitz explained. The new joint venture is the latest example of operators getting more involved in the development of network equipment, he added.

Given the amount of work still needed to make 5G a success at the service, application, and technical level, it’s “smart to see operators pulling resources together to achieve those goals,” wrote Daryl Schoolar, principal analyst at Ovum, in response to questions. “Pulling resources helps them save money during this process and makes [return on investment] goals easier to achieve.”

And because the operators serve different regions there is effectively no overlap between their businesses, which “eliminates the likelihood of anything they jointly develop” being “used against each other in a competitive situation,” Schoolar added.

Joint ventures and other partnerships are very much top of mind for SK Telecom of late. Earlier this month the South Korean operator, which was among the first mobile operators to launch 5G services alongside its domestic peers KT and LG Uplus, signed agreements with Ericsson, Nokia, and Samsung for joint research and development on 5G and, yes, 6G technologies.

“Through partnerships with companies throughout the world, SK Telecom aims to expand beyond the realm of mobile communications to become a global [information and communications technology] company,” SK Telecom CEO Park Jung-ho said in a prepared statement. The operator also recently partnered with LG Electronics to jointly develop 5G cloud-based robots, and in May the operator signed a deal with Microsoft to collaborate on 5G, artificial intelligence (AI), and cloud services to expand IoT capabilities.

“There’s a recognition in the industry that the stakeholders in the ecosystem need to work together to unlock new pockets of value and also figure out best practices pertaining to the business models changes — through the digitalization, the transformation of their businesses as well as the implementation of new technologies,” Antlitz said.

The large investment funds, which are also becoming popular among telcos, is yet another example of operators trying to take more control of their destinies. These investment funds are a mechanism to source new innovation and weave that into their respective digital transformation efforts, he explained.

While operators are not heavyweights in the infrastructure market, many of the largest players like AT&T, Verizon, and Telefónica are starting to procure their own software and equipment. “The vendors are faced with significant disruption from 5G," Antlitz said. "5G is hugely disruptive to their business model,” particularly when virtualization, edge computing, automation, and AI are involved, he added.

“5G is a component of this, but more broadly the architecture of networks is fundamentally changing and virtualization is the primary catalyst that is driving that,” he said. “5G is more of a subcomponent. It’s really the virtualization and the cloudification of networks that is driving this, and that architectural change is the source of the vast majority of the disruption that we are seeing in the market.”

Business models are changing and networks operators are not getting the open source technology they want from incumbent vendors, Antlitz explained. “The telcos need to build their networks more efficiently and if that means vendor disruption then so be it. The telcos are trying to survive on their own so there’s going to be a lot of gyrations in the market from these disruptive forces that are going on.”