The Core

Verizon takes cautious cloud approach

Ed Chan, Verizon's chief network engineering officer, told the financial analysts at Cowen that the operator has no immediate plans to shift its core network operations into the cloud like AT&T and Dish Network plan to do.

However, he said Verizon will continue to look for ways to team with cloud computing providers. For example, Verizon has extensive deals with Amazon and Microsoft for edge computing but those agreements don't cover Verizon's core network operations.

Chan's comments on the cloud are noteworthy considering Verizon is spending an extra $10 billion over the next three years to upgrade its 5G network with C-band spectrum. And that spending is in addition to the roughly $50 billion Verizon paid for C-band spectrum licenses.

Chan made his comments to the Cowen analysts as part of the firm's 7th Annual Cowen Communications Infrastructure Summit. In their summary of Chan's comments about the cloud, the analysts wrote that he "sees some benefits but it has its limits and does not seem likely to follow" AT&T and Dish.

"While the idea is to get control and flexibility in managing the network (AT&T migrating its core functions, likely subscriber management and the ability to network slice), much of the core network is COTS (commercial off-the-shelf) equipment, and the core is tightly tied to OSS/BSS (care/billing) systems, thus Verizon believes it would be difficult to migrate to a cloud platform," the analysts wrote of Chan's comments on the matter.

Dish unveiled a massive new agreement with Amazon Web Services (AWS) earlier this year that essentially paves the way for the operator to run its network operations inside AWS' public cloud. The deal has been heralded as a seminal event in the global wireless industry, given networking trends toward cloud, virtualization and software-defined operations.

Indeed, just week's after Dish's deal with AWS, AT&T announced it would offload its core cloud networking operations to Microsoft. The deal essentially allows AT&T to run its core 5G network inside Microsoft's Azure cloud.

But according to Chan's comments to the Cowen analysts, Verizon has no concrete plans to follow suit. He told the analysts that the bulk of Verizon's 5G spending today is focused on its access network, primarily installing C-band-capable radios atop cell towers around the country. He said that spending is split roughly evenly between the hardware and the construction costs.

However, Verizon remains open to working with cloud computing companies in other areas. Indeed, Verizon has inked extensive agreements with both AWS and Microsoft for public and private edge computing services.

"Verizon does see working with cloud operators, especially on the edge (Verizon provides the access, the cloud provides the platform for developers), potentially expanding its own relationship with AWS, and is more about the relationship/arrangement between two big companies rather than the technology integration," the Cowen analysts summarized.

Other tidbits that came out of Chan's conversation with the Cowen analysts:

  • Verizon is currently deploying its C-band spectrum and its CBRS spectrum with separate equipment because transmissions in the two bands operate at different power levels. However, he said Verizon is working on creating a dual-band radio for CBRS and C-band for small cell environments where power requirements would be similar. Similarly, he said Verizon is looking at dual-band radios for its 39GHz and 28GHz spectrum deployments.
  • Both Ericsson and Samsung Verizon's two main C-band vendors have committed to enabling open RAN specifications. However, Chan said open RAN software still needs work.
  • Verizon plans to upgrade some unspecified portion of its remaining 14 million DSL customers with fiber.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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