AWS isn't going to war with telcos on private 5G

AWS Re:Invent LAS VEGAS: Amazon Web Services (AWS) announced a lot of new products this week, but its Private 5G offer is perhaps the one that’s grabbed the most attention. The news was greeted with speculation that AWS is looking to go head-to-head with operators on 5G, positioning itself as a competitor rather than a collaborator. But AWS executives and AvidThink analyst Roy Chua told Fierce that’s really not the case.

For those not already in the know, AWS’ Private 5G product is a fully-managed private wireless system which uses CBRS spectrum (3.5GHz spectrum) and a pay-as-you-go pricing model. A thorough rundown of everything included in the solution can be found here.

On the surface it might seem like AWS is mounting a challenge to traditional wireless operators, many of which are peddling private 5G to enterprise customers. But Chua said if you dig deeper, it’s clear that’s not AWS’ end game.

First, he noted the system AWS put on the table is really more of a “starter kit” for private 5G than a fully fledged system like the ones vendors like Nokia and Ericsson provide. Additionally, while CBRS will allow it to undertake solo deployments in the U.S., different spectrum regulations in other countries mean it will likely have to partner with operators to go to market in other areas.

RELATED: AWS surprises with AWS Private 5G

“It’s a wake up call, not a weapon,” Chua said. “They did this because they were frustrated with what they were seeing with uptake of private 5G and the high cost and complexity around the solutions that are on the market today.” He explained that thus far there’s been a very high barrier to entry for enterprises looking at private 5G, with deployment costs ranging upward from $250,000.

“For enterprises who don’t quite know yet, they just want a simple solution they can try out and play around with,” which is what the AWS offer provides, he said. But if and when it comes time to scale that up “it’s not clear to me that AWS itself will be able to fulfill that or want to fulfill that, and I think that's where the CSPs [communications service providers] actually fit in.”

While AWS could really go after the private 5G market with substantial investment, Chua doesn’t think it will. To him, partnering with telcos makes more sense for AWS strategically.

“It should be viewed as an acceleration of the market,” he said. Chua added the money for Amazon isn’t in private 5G but in privatization and digital transformation more generally. If those take off, AWS captures that market with its computing and infrastructure solutions.

Chua’s view is supported by comments from AWS executives, who have stated the company is looking to collaborate, not compete, with CSPs. AWS VP of Engineering Bill Vass explicitly told Fierce it sees itself “as a partner, not a competitor” to operators when asked about the Private 5G offer. "Our goal is ultimately to make it easy for people to connect," he said.

Ishwar Parulkar, AWS’ Chief Technologist for Telecom and Edge Cloud, and Adolfo Hernandez, VP of AWS’ Global Telco Business Unit, made similar statements. In a breakout session at re:Invent, Parulkar stressed it is looking “for potential collaboration opportunities with our telco customers.”

“They bring a lot of assets like spectrum, experience in managing networks and operating networks, so we’re looking at how we can integrate that into offering this service to our customers,” he said. Parulkar added partnering could also benefit telcos by increasing their spectrum utilization and monetization opportunities.