The telecommunications industry’s journey toward a cloud-native future is proving to be less of a technological sprint and more of a complex organizational marathon, where the most significant obstacles are deeply embedded in corporate culture and legacy thinking. According to Mallik Rao, CTIO of Telefónica Germany, successfully navigating this transition requires a fundamental, end-to-end transformation that goes far beyond simply upgrading equipment. This comprehensive shift must reshape network architecture, overhaul operational processes, and, most critically, redefine the organizational mindset. The vision is a progressive expansion “from core to the edge,” where cloud-native principles are methodically introduced in one domain and then spread throughout the entire network infrastructure. For this ambitious migration to succeed, the cloud cannot be viewed merely as a new technology platform; it must be embraced as the core enabler for next-generation capabilities like advanced automation, network APIs, and innovative digital services that will define the future of connectivity. While significant progress has been made in migrating IT systems, the core network remains the most challenging and final frontier in this transformation.
The Cultural and Technical Roadblocks
The most formidable barrier slowing the telecommunications industry’s evolution is not technological but cultural. Telcos have historically excelled at incremental adoption, mastering the art of gradually integrating new generations of technology into existing frameworks. However, this cautious, step-by-step approach is fundamentally at odds with the disruptive nature of cloud-native architecture. Rao candidly states that while telcos are proficient at gradual change, they are “extremely bad” at the kind of wholesale, transformative shifts that cloud adoption demands. This deep-seated cultural inertia creates a powerful resistance to the new operational models, agile development cycles, and collaborative ecosystems inherent to the cloud. Overcoming this requires more than executive mandates; it necessitates a profound cultural reset, empowering teams to experiment, fail fast, and abandon long-held practices in favor of a more dynamic and software-centric approach to building and managing networks. Without this psychological and organizational shift, even the most advanced technology will fail to deliver on its full promise.
Compounding the cultural challenge is the immense weight of legacy infrastructure, which acts as a technical and financial anchor slowing the industry’s forward momentum. A primary constraint is the persistent requirement for backward compatibility with older network technologies like 2G and 3G. Maintaining these aging systems consumes valuable resources, complicates network management, and prevents operators from fully committing to a streamlined, forward-looking architecture. True progress often requires making difficult, disruptive decisions to break from the past. A case in point is Telefónica Germany’s own early shutdown of its 3G network. While a challenging move, it was a necessary disruption that forced the organization to accelerate its focus on building more efficient and modern systems. This example underscores a broader industry dilemmthe reluctance to decommission legacy services, while seemingly prudent in the short term, ultimately hinders the very innovation needed to remain competitive and build the networks of the future.
Navigating Vendor Dynamics and Real-World Progress
Interestingly, the classic concern of vendor lock-in is not seen as the primary impediment in this new cloud-centric landscape. Instead, a more nuanced challenge has emerged: a misalignment of incentives and operational speed between different players in the ecosystem. According to Rao, vendors are often caught in a difficult position, having to balance the aggressive, cloud-forward demands of pioneering operators with the more cautious pace of those slower to adapt. This tension creates friction and can slow down the development of truly telecom-grade cloud solutions. This dynamic was clearly illustrated when Telefónica Germany embarked on moving its packet core to the public cloud with partners Nokia and AWS. The project required deep, intensive collaboration because the underlying technology was not initially mature enough to handle the stringent performance and reliability demands of critical telecom workloads. This experience highlights that the path to a cloud-native network is not a simple procurement process but a co-creation journey where operators and vendors must work in lockstep to mature the technology and adapt their processes.
Despite these significant hurdles, Telefónica Germany’s journey demonstrates that tangible progress is achievable through a focused and persistent strategy. The operator now successfully runs 1.5 million packet core customers on the public cloud, a significant milestone that validates the viability of its approach. Looking ahead, the company has set a clear objective of achieving “cloud at scale,” which it defines as having at least 20% of its total business operations running on cloud-native infrastructure. This commitment signaled a permanent departure from the traditional, on-premises vertical stack model that has defined telecommunications for decades. The transition was understood to be an irreversible one, with the expectation that the adoption of cloud-native principles would only accelerate with the eventual arrival of 6G. This long-term vision provided the necessary framework for navigating the complexities of the present, reinforcing the idea that each successful migration and cultural adjustment was a critical step toward building a more agile, efficient, and innovative network for the future.
