AT&T is turning to Microsoft to help it deploy its 5G network, and will rely on Microsoft Azure to manage its network traffic.

Like virtually every major carrier, AT&T is racing to deploy its 5G network. The company recently spent more than $23 billion at the FCC’s 5G spectrum auction.

AT&T is now looking to Microsoft to help roll out its 5G network, with plans to use Azure to manage its network. The companies will begin with the 5G core, and work to migrate existing and future network workloads to Azure for Operators, Microsoft’s version of Azure specifically targeted at telecoms.

As part of the deal, Microsoft will gain access to AT&T’s intellectual property, including acquiring AT&T’s Network Cloud, which the company has been using to run its 5G network since 2018. Microsoft will be able to integrate Network Cloud’s features and abilities into Azure for Operators.

“AT&T has one of the world’s most powerful global backbone networks serving hundreds of millions of subscribers. Our Network Cloud team has proved that running a network in the cloud drives speed, security, cost improvements and innovation. Microsoft’s decision to acquire these assets is a testament to AT&T’s leadership in network virtualization, culture of innovation, and realization of a telco-grade cloud stack,” said Andre Fuetsch, executive vice president and chief technology officer, AT&T. “The next step is making this capability accessible to operators around the world and ensuring it has the resources behind it to continue to evolve and improve. And do it securely. Microsoft’s cloud expertise and global reach make them the perfect fit for this next phase.”

“With Azure, operators can provide a more flexible and scalable service model, save infrastructure cost, and use AI to automate operations and differentiate customer offerings,” said Jason Zander, executive vice president Azure, Microsoft. “Through our collaboration with AT&T, Microsoft will expand its telecom portfolio to support operators with a carrier-grade cloud that provides seamless experiences across Microsoft’s cloud and the operator’s network.”

The deal is a big win for Microsoft, especially as it pushes its Azure for Operators, and will give its cloud platform a major boost in the telecom market.