Microsoft has announced the sale of its former private 5G unit, Metaswitch, to telecommunications provider Alianza. This business move, expected to be finalized by the first quarter of 2025, marks a shift in Microsoft’s venture into enterprise networking. The financial terms remain undisclosed.
Originally, Microsoft acquired Metaswitch in 2020, alongside Affirmed Networks, targeting the provision of core 5G networks to enterprises and operators. However, the initiative faced challenges. Microsoft’s attempt in the enterprise networking space did not achieve expected success. The private 5G efforts of Metaswitch have been inactive since summer.
Despite this sale, Microsoft emphasizes its ongoing commitment to the telecom sector. It has announced plans to work closely with Alianza, a provider serving numerous communication projects, including mobile operators. The focus will be on promoting its enterprise cloud and applications.
Alianza, founded in 2009, will gain access to Metaswitch’s voice and communications software services, IP protocol, and engineering talent with this acquisition. This development boosts Alianza’s reach to about 1,000 service providers, including leading mobile operators. The acquisition is anticipated to open doors for service providers to explore the cloud-native and AI service economy, improve service revenue, and modernize their infrastructure.
Rohit Mehra of IDC comments on the deal’s importance, explaining it in the context of competition faced by telcos from over-the-top (OTT) service providers, which challenge traditional telecom services. “Operators face increasing threats from OTTs, whose services are gradually eroding their long-held positions in… voice and collaboration services,” said Mehra.
The acquisition also addresses the telco industry’s struggle with revenue growth amidst increased network capacity investments. Service providers have historically expanded networks, hoping for revenue increases, but results have been stagnant. This scenario left many with outdated infrastructure needing upgrades.
