Telefonica taps Microsoft as private 5G teammate

Telefonica tapped longtime strategic partner Microsoft to strengthen its private 5G network product with integrated edge compute capabilities, in a move meant to boost industrial deployments.

Gonzalo Martín-Villa, CEO of IoT and Big Data at Telefónica Tech, said in a statement combining the capabilities of both companies will allow it to offer customers “a framework for the creation, deployment and operation of industrial solutions and their private communications in an integrated way inside and outside the factory.”

Yousef Khalidi, Microsoft’s corporate VP of Azure for Operators, added partnerships like the one with Telefónica are “critical in helping us meet the on-premises needs of our industrial customers.”

In a press release, Telefónica noted the introduction of an integrated architecture model will help speed adoption of smart factory business processes, which rely on the digitization of equipment, intensive computing and artificial intelligence to improve decision making and security, and require data to remain on-premises.

Microsoft and Telefonica are far from strangers. The companies formed a strategic partnership in February 2019 focused on exploring how artificial intelligence and machine learning could be used to optimize network performance and reduce costs. A year later, they expanded their collaboration to include cloud technologies, with Microsoft committing to open a new data center region in Spain as part of the arrangement.

RELATED: Microsoft charts a new data center in Spain, tightens partnership with Telefónica

Telefónica’s decision to tap it for private wireless notably follows Microsoft’s acquisitions of Affirmed Networks and Metaswitch last year, which bolstered its telco chops and teed it up to launch private networks products.

In August 2020, Affirmed announced it was working with Swedish company Netmore to deploy a private 5G wireless network in the U.K. A few months later, Microsoft EVP of Worldwide Commercial Business Judson Althoff mentioned private 5G networks as one use case that could leverage the company’s edge compute capabilities.

During Fierce's Private Wireless Networks Summit earlier this week, Verizon Business CRO Sampath Sowmyanarayan said the operator expects the private wireless market to represent a $7 billion to $8 billion opportunity by 2025.