Microsoft to acquire AT&T’s cloud infra to pad up its telco cloud stack

Microsoft on Wednesday said it will acquire wireless services company AT&T Communications’ Network Cloud technology and associated workforce to help operators streamline operations.

Microsoft will gain access to AT&T’s intellectual property and technical expertise to grow its telecom flagship offering, Azure for Operators. AT&T’s 5G core network runs on its carrier-grade Network Cloud platform technology.

Microsoft will assume responsibility for both software development and deployment of AT&T’s Network Cloud immediately and bring AT&T’s existing network cloud to Azure over the next three years. 

The companies did not disclose details on financial terms. AT&T will continue to operate its network and retain its customer relationships. 

AT&T will move its 5G mobile network to the Microsoft cloud, as part of the announced deal to allow for all of AT&T’s mobile network traffic to be managed using Microsoft Azure technologies.

The two companies will start with AT&T’s 5G core, the software at the heart of the 5G network that connects mobile users and IoT devices with internet and other services, as per a statement.

Bringing existing and future network workloads to Azure for Operators will enable AT&T to increase productivity and cost efficiency while focusing on the delivery of large-scale network services, the statement said.

AT&T’s Network Cloud platform has been running AT&T’s 5G core at scale since the company launched 5G in 2018. It now expects to bring real-world production 5G workloads to Azure for Operators.

The Network Cloud platform engineering team will receive offers to join Microsoft.

Microsoft will also acquire AT&T engineering and lifecycle management software used to develop and deploy a carrier-grade cloud that runs containerized or virtualized network services. It will make the platform applicable to other carriers through Azure for Operators.

“AT&T has one of the world’s most powerful global backbone networks serving hundreds of millions of subscribers. Our Network Cloud team has proved that running a network in the cloud drives speed, security, cost improvements and innovation. Microsoft’s decision to acquire these assets is a testament to AT&T’s leadership in network virtualization, culture of innovation, and realization of a telco-grade cloud stack,” Andre Fuetsch, executive vice president and chief technology officer, AT&T, said.

The next step, Fuetsch added, is to ensure that the to-be-acquired asset has the resources behind it to continue to evolve and improve in a secure manner, using Microsoft’s cloud expertise and global reach.

With Microsoft’s hybrid and hyperscale infrastructure, AT&T said it can substantially reduce engineering and development costs, letting it rapidly innovate and launch new services and customer experiences enabled by 5G.

In 2020, Microsoft acquired Affirmed Networks and Metaswitch Networks to start building on a secure telecom network in the cloud for operators.  

As per global lobby group Global System for Mobile Communications Association (GSMA), operators are expected to spend $900 billion worldwide between 2021 and 2025 in mobile capital expenditures. About 80% of spending will be in 5G, and thereby cloud infrastructure.