With new cloud-based 5G networks, tech giants and other newcomers to the mobile telecoms market pose challenges to incumbent mobile network operators.

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Of America’s biggest telecoms, T-Mobile has led the 5G race, while AT&T and Verizon have encountered delays. Soon all three will have launched large-scale 5G upgrades. They will be followed closely by a new kind of competitor, Dish Networks. If its launch is successful, the company long known for satellite television is expected to become the country’s fourth-largest mobile carrier. This month Dish and AT&T were the top winners of wireless spectrum in a U.S. Federal Communications Commission (FCC) auction.

The Dish 5G network would be the first in America to exist almost entirely in the cloud. The virtual portion will run on Amazon Web Services (AWS), bringing Amazon into the mix. Other big cloud providers are there as well. As computing clouds such as AWS and Microsoft’s Azure advance, their ability to power mobile networks is increasing. Through acquisitions and partnerships in recent years, Microsoft, Google and Amazon have all gained the capabilities to offer 5G networks for operators.

Dish’s mostly virtual network will have some advantages over conventional mobile networks. Being automated and using minimal equipment, it will cost less to set up and run. But Dish is hardly the only carrier working on the so-called cloudification of 5G. AT&T’s 5G network will run on Microsoft’s Azure cloud. India’s Reliance Jio also has plans for a large-scale cloud-based 5G network.

Another newer entrant to the mobile telecoms market is Rakuten, which has built a 5G network similar to that of Dish. But unlike Dish and other American telecoms, Rakuten does not outsource its cloud operation. Instead, the Japanese tech giant built its own and formed a subsidiary, Rakuten Symphony, to offer the system to operators.

Cloud-based networks still face daunting technical hurdles, such as the need to run edge cloud services at a massively distributed scale. Managing a network is vastly complex, giving the advantage to entrenched telecoms firms, some with generations-long customer relationships. There is also the matter of data protection. European governments are wary of running their networks on foreign clouds, giving American or Chinese tech firms access to them. Carriers in Europe and elsewhere are loathe to lose more business to tech giants like Amazon, Google and Microsoft.

Regardless of how these matters are resolved, given the way the telecoms industry and the cloud business are becoming enmeshed, telecoms “will look very different a few years from now”, according to The Economist. The competition to control the telecoms cloud will intensify, but ultimately cloud providers and network operators will likely have to work together in an interdependent new world of mobile telecoms.

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