Microsoft takes on Ericsson in UAE using Azure Operator Nexus

Update:

An Ericsson communications official contacting us to clarify the information in our news article:

Ericsson is Etisalat’s provider of User Data Management (UDM), a part of Ericsson’s Core portfolio, since 2020. We are not the incumbent packet core provider. Ericsson’s relationship with Etisalat, which also includes many other products of our broad portfolio, continues as is and has not been impacted by the cited contract with Microsoft.

Karl O’Doherty, Senior Communications Manager, BCSS MC Communications

Microsoft gave a strong signal with Azure Operator that telecom industry will soon follow the AI path and now, the giant has signed a 5G deal with Etisalat that paves the way for a strong development in the industry.

Etisalat has taken Microsoft’s 5G core network applications to host them on the Nexus platform. The 5G packet core is a development of the Affirmed technology bought by the Redmond giant in 2020, fused with the technology picked up from another telecom acquisition of Metaswitch.

Now, everything comes together and it seems that the major loosing party in this deal is Ericsson, who had Etisalat as a core customer. According to a 2023 Ericsson press release, the European company was celebrating reaching the 13 Gbps 5G downlink speed threshold with Etisalat.

The Ericsson official cleared this issue out saying that the above press release was related to Radio Access Network (RAN), not to Core.

How will Etisalat use Microsoft’s technology?

In an interview for LightReading, Yousef Khalidi, the corporate vice president of Microsoft’s Azure emphasized the importance of this deal with the United Arab Emirates’ Etisalat company:

This is not just a small network on the side, an IoT or backup network. This is real production going on.

However, according to the official, Etisalat will not simply set all its core in the public cloud. Azure Operator Nexus is a hybrid cloud solution which allows the operator to run its user and control planes of the network on premises. Only the management plane data will flow to the cloud.

Microsoft addresses the sovereignty concerns about sensitive data storage in other countries when it set up its public cloud facilities in UAE in 2019, so there is no need for further concerns.

What is Microsoft future in the telecom industry?

Big telecoms are reluctant to handle their platforms though a third-party cloud operator and prefer handling this data themselves, but they are also behind innovation.

Microsoft is already preparing a cloud core deal with the smallest UK mobile network operator, Three, which previously had a deal with Nokia for this operation.

And it seems that the common denominator for Microsoft’s success in this business are its AI infused cloud solutions.

My message to all of them is that they need to look at the option of moving up the stack and using more AI apps in their system, to look at adding value as opposed to doing plumbing. Leave the plumbing the plumbers. I have to admit not all of them are there yet, but there is movement.

Yousef Khalidi, corporate vice president of Microsoft’s Azure in an interview for LightReading.

The telecom industry, like any other, is prone to change and evolution and it seems that Microsoft has the right recipe for that.

What do you think about the Microsoft Etisalat deal? Let’s discuss it in the comments section below.