Verizon signs up Microsoft, Nokia to help clients build private 5G networks

October 19, 2020 2:02 PM

By Supantha Mukherjee and Kenneth Li

STOCKHOLM/NEW YORK (Reuters) - Verizon (NYSE: VZ) said on Monday it has struck deals with Microsoft (NASDAQ: MSFT) and Nokia to improve the telecoms giant's ability to target business customers by offering clients the ability to automate factory floors, lower costs and speed up data traffic through private 5G networks.

Private 5G networks remove the need for businesses to jostle for speed with others on a public network and help enable data-intensive applications that use computer vision, augmented reality and machine learning to increase productivity.

Azure, Microsoft's cloud computing business, will run on top of Verizon's 5G network to processes the data generated by machines at the local facility and use artificial intelligence to automate operations. Microsoft launched the new service late last month directed at telecom operators.

U.S.-based logistics company Ice Mobility is the first customer for the new partnership, allowing it to track employees packing the products into the right boxes to skip quality control. https://youtu.be/XOgax6kgOr0

"This is about creating a new business opportunity for everyone," Verizon's Chief Strategy Officer Rima Qureshi said. She declined to disclose how the revenue would be shared between Verizon and Microsoft.

While 4G helped create multi-billion dollar businesses ranging from music and video streaming to cab hailing and food delivery, telecom operators seldom got a share of that growth.

Verizon is now keen on taking a share in new businesses that 5G might enable, either by partnering with bigger companies or by buying stakes in smaller ones such as virtual reality company 8i to Swiftmile, which makes charging systems for electric scooters.

In international markets, where Verizon doesn't have its own network, it is working with Nokia to build private networks for manufacturing and logistics companies.

"Next year will be all about deploying private 5G and not about commercial success and we will start seeing early monetization from 2022 onwards," Sowmyanarayan Sampath, president of Verizon's global enterprise business, told Reuters.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm and Kenneth Li in New York, Editing by Andrea Ricci)

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