Telefonica Picks IBM and Oracle for Network Upgrades

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By: Mary Jander

In a move to modernize and upgrade its network services, Spain’s Telefonica SA will work with IBM (NYSE: IBM), Red Hat, and Juniper (NYSE: JNPR) to build out its 5G network, while enlisting Oracle (NYSE: ORCL) to extend its support services to the cloud.

The two announcements, made separately, extend Telefonica’s existing relationships with IBM and Oracle, and they highlight the telco’s efforts to advance its infrastructure. Until recently, Telefonica’s spending on network improvements has been relatively modest compared with other first-tier telecom companies. While Telefónica expanded its reach through arrangements with other carriers, such as a deal with Vodafone for “bilateral active network sharing” in Germany, or a joint venture with Liberty Global’s Virgin Media in Europe, the carrier has held back on major capex. Now that seems to be changing.

Telefonica’s Big Plans with Big Blue

Telefonica is building its 5G core network service, dubbed UNICA Next, through a multi-year agreement with IBM, with which Telefonica's shared past projects. Big Blue will provide its artificial intelligence (AI)-equipped Cloud Pak for Network Automation (which was unveiled this past June at the Mobile World Congress in Barcelona), along with Red Hat OpenShift and Red Hat Advanced Cluster Management, to virtualize 5G core network functions and orchestrate and manage them in a cloud-native, container-driven environment. Also in the mix will be Juniper’s QFX switching equipment and Juniper's Apstra intent-based networking (IBN) and intent-based analytics (IBA) platform, which automates network design and operations.

The resulting automated 5G environment mimics a similar implementation by Verizon (VZ), which also worked with IBM Global Business Services, the same integrator at work for Telefonica, to leverage OpenShift to create an automated 5G core.

The news here is not just Telefonica’s upgrading; it’s also interesting to see how IBM is continuing to expand its role as ecosystem matchmaker, supporting an integrated approach to 5G that includes major equipment suppliers. In Barcelona, the spotlighted Cloud Pak integration was with Cisco (Nasdaq: CSCO); now, IBM is showing that Juniper can stand in too. And for its part, Juniper is showing it too works with an ecosystem of players in telecom networks.

These are wise moves in a market where competition is emerging from many sides, including from cloud players AWS and Microsoft (Nasdaq: MSFT), which is shifting the entire 5G core network of AT&T (NYSE: T) to Azure, as well as from Hewlett Packard Enterprise (NYSE: HPE) and VMware (NYSE: VMW), which have keen interest in assisting telecom providers.

Telefonica Extends Oracle

Telefonica also announced that it will extend an existing relationship with Oracle by moving most of its business databases, already Oracle-based, to the Oracle Exadata Cloud@Customer. That platform shifts existing on-premises Oracle databases to a cloud based in the customer data center that is managed by Oracle. In Telefonica’s case, this will allow the telco’s operations and business support systems (OSSs and BSSs), customer relationship management (CRM), billing, and various business applications to perform better while complying with data regulations. The approach also will fuel new services for applications such as Internet of Things (IoT) and 5G, Telefonica says.

A New Era for Telefonica

While Telefonica may have lagged a bit in next-gen wireless, the news above indicates it’s ready to enter the 5G fray, in particular competing with top European carriers such as Deutsch Telekom and Orange.

Notably, Telefonica appears to be taking aim at enterprise business customers. The telco’s announcement early in 2021 with IBM of Cloud Garden 2.0, a service that uses OpenShift to help business customers redesign and shift their applications to public, private, or hybrid clouds, is the kind of offering Telefonica wants to provide.

With these latest announcements, Telefonica is taking its own advice and pointing the way for businesses to follow. It is also probable that Telefonica will attempt to make headway in private wireless. Whatever the strategy, Telefonica's cloud infrastructure is shaping up to respond competitively.