Telefónica is leading its European counterparts by coalescing a 5G core, network virtualization, and cloud-native containerized workloads into a holistic network evolution effort, according to an industry analyst.

“I view Telefónica as a leader in the European market on this front,” Will Townsend, senior analyst at Moor Insights & Strategy, told SDxCentral. 

Telefónica Germany today announced plans to build its 5G core and network functions for industry-specific use cases in the cloud with an assist from Amazon Web Services (AWS) and Ericsson. The operator previously selected Ericsson as the vendor for its 5G core and orchestration services. It now plans to use AWS to virtualize that 5G network core and begin developing network functions for key industries.

The carrier describes the effort as an “industrial use case proof of concept,” but adds that the virtualization of the 5G core and first wave of network functions will be commercially available throughout Germany next year.

When Ericsson shared details about the deal to provide Telefónica Germany’s standalone 5G core with full cloud compatibility in June, it said the 5G network core would be operating in a commercial environment before the end of this year.

“The industrial use case proof of concept is the right approach as 5G interest and adoption is still light, said Zeus Kerravala, principal analyst at ZK Research, adding that the environment is “ideally suited for 5G.”

Telefónica Germany said it is “investing a double-digit million Euro amount in the virtualization of the network,” which puts the total investment in the range of $11.9 million to $117.9 million. By achieving lower costs for development, provisioning, and operations, the operator said it expects to realize a potential 20% savings overall.

The changes in infrastructure will boost agility via SDN, speed the deployment of enterprise use cases, and deliver elasticity and scale via AWS, Townsend said.

“We are shifting essential functionalities of our 5G core network to the cloud. This turns hardware-centric technology into an extensive solution,” Mallik Rao, the operator’s chief technology and information officer, said in a statement.

“Based on Ericsson’s modern cloud-native software architecture as a link to the AWS cloud solution, we can easily, quickly, and flexibly integrate new 5G industry applications into our network and offer them to our customers with our 5G cloud,” Rao added.

The proof of concept framework also applies to experimentation and testing Telefónica Germany plans to do with enterprises to ensure the security of data and confirm compliance with applicable data protection guidelines for specific industry standards. Telefónica Germany said all of the data from its virtualized 5G core network will remain exclusively on AWS servers in Germany.

The carrier said it will also use AWS Outposts, the cloud provider’s managed service that extends its infrastructure, services, APIs, and tools to any data center or colocation facility.

“Telefónica’s 5G core will leverage AWS cloud technology within the AWS Frankfurt region and their on-premises data centers through AWS Outposts,” Dave Brown, VP of Elastic Compute Cloud (EC2) at AWS, said in a statement.

“By building their 5G core network on AWS, Telefónica Germany is opening the door to cloud-native infrastructure, delivering full automation and elasticity at scale, with the ability to dynamically scale and allocate 5G network capacity to meet the need of their business customers,” Brown said.

Telefónica Germany noted that AWS Outposts can also be deployed in close proximity to enterprises’ facilities, thereby enabling edge computing, but it didn’t mention AWS Wavelength, which the hyperscaler developed specifically for network operators to provide an edge compute service.

Verizon, one of the first operators to make use of AWS Wavelength, deployed the service for developers in Boston and the San Francisco Bay Area last month, and plans to bring it to an additional 10 markets before the end of the year.

“Edge is becoming table stakes in these deployments and I would bet Telefónica will also leverage AWS Wavelength down the road,” Townsend said.