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Telefónica Germany CTIO Mallik Rao on cloud-native transformation: Telcos are ‘very good at adoption, but extremely bad at disruption’
Cloud-native networking has become one of the most overused phrases in telecom, but for Telefónica Germany, it represents more than a new deployment model; according to the telco’s CTIO Mallik Rao, it’s a fundamental shift in how networks are designed, built, and operated.
On the most recent episode of Unmuted, Rao emphasized that cloud-native networking must be treated as an end-to-end transformation, spanning technology, operations, and organizational culture. Cloud, he said, is both a technology and an enabler, noting that while IT and digital services are already years ahead, networks remain the most challenging domain. For Rao, a cloud-native network must evolve “from core to the edge,” enabling automation, network APIs, and new digital capabilities across the lifecycle, from engineering and planning to build and operations.
Despite Telefónica’s progress, Rao was candid about the biggest barriers holding the industry back. “I think the biggest one, I would say, is culture,” he said, adding that telcos are “very good [at] adoption, but we’re extremely bad [at] disruption.” Legacy infrastructure remains another major constraint, particularly the industry’s insistence on backward compatibility. “While we launch 5G, 5G SA, maybe we’ll do 6G, but we will never forget 2G. We will never forget 3G,” Rao said, pointing to Telefónica Germany’s early 3G shutdown as a rare but necessary disruption that forced the organization to build forward-looking systems.
Vendor lock-in, however, is not Rao’s primary concern. Instead, he worries about supplier incentives and speed. “I’m actually not too worried about vendor lock-in,” he said, explaining that long vendor relationships are already the norm in telecom. The real challenge, he argued, is that vendors must balance the needs of operators moving aggressively toward cloud-native architectures with those that are not.
That tension has been particularly evident as Telefónica Germany moves critical workloads into public cloud environments. Early packet core deployments with Nokia and AWS required deep collaboration, Rao said, because “technology is not ready” at the outset — especially when adapting hyperscale infrastructure to telecom-grade network workloads. “Network workload will tell you how the hardware should behave,” he explained. Today, Telefónica Germany has 1.5 million packet core customers running in public cloud and plans to migrate at least 20% of its total packet core workload.
Looking ahead to 6G, Rao sees cloud-native principles accelerating rather than being replaced. Telefónica Germany is now focused on “cloud at scale,” defined as having at least 20% of the business running on cloud infrastructure across central, edge, and on-prem environments. “It will not go back to on-prem kind of say vertical stack world,” he said.
