The telecommunications industry is at a critical crossroads. As AI reshapes global value chains, communications service providers (CSPs) must determine their strategic position: will they remain infrastructure enablers or evolve into full-scale participants in the AI economy?

A new Fierce Network Research report — “Risk, Reward and Revenue: Defining Telcos’ Role in the AI Economy” — examines this identity challenge — and how network operators are recalibrating for the next generation of network-driven intelligence.  Based on a global survey of 500 technology decision-makers across 40 countries, the findings reveal a pronounced industry divide. A majority (57%) of operators see their core opportunity in infrastructure — networks, data centers, and secure connectivity — while 43% advocate for a more integrated position, aspiring to orchestrate AI ecosystems (19%) or participate fully in the AI value chain (24%).

Some of the industry’s early adopters are already showing what that future might look like.

• AT&T reports a twofold increase in cash flow for every dollar it invests in AI, emphasizing measurable outcomes over vague productivity gains.  An AT&T executive said that success in the AI era depends on “Goldilocks governance” — a balance not too rigid to stifle innovation, and not too loose to compromise compliance and trust.
• Bell Canada is moving in a similar direction, targeting a doubling of enterprise AI revenue by 2028 and positioning its Ateko subsidiary and AI Fabric platform as the backbone of a “sovereign digital spine” for Canada.
• “We’re using AI to enhance our products and services and make them better,” Ed Fox, MetTel CTO.  The company provides a private network to deliver integrated communications and IT services to U.S. businesses and government agencies, including voice, data, network, cloud, mobility, IoT and security solutions. MetTel also provides managed network services such as SD-WAN and secure access service edge (SASE).
• Rick Lievano, Microsoft CTO for the worldwide telecommunications industry, sees operators expanding their use of AI beyond efficiency. “Initially, the first place where telcos began to experiment with AI is around efficiency gains — how can I save money, and how can I do more with fewer people? That’s been the target of the first couple of waves of AI,” Lievano said. “However, their eyes light up when we talk with them about new revenue opportunities,” Lievano said.

The research highlights that telcos possess critical assets few other industries can match: globally distributed data center capacity, secure and resilient networks, and deep, long-standing relationships with enterprise and government customers. But the barriers are equally significant — from proving the business case for AI infrastructure to navigating a shortage of data science and AI talent. Legacy technology debt continues to drag, with one executive lamenting that 145 years of accumulated systems make modern data integration “extraordinarily complex.”

A new Fierce Network Research report reveals how communication service providers are navigating the AI economy amid uncertainty about their role and strategy. (Google Gemini)

The bottom line is clear: to remain relevant in the AI-driven economy, telcos must modernize both infrastructure and business models — transforming from connectivity providers into intelligent digital enablers.  However, we’ve heard that cry for telco transformation from dumb pipes to intelligent and autonomous network and IT providers, but it has yet to be realized. Will this time be any different?

References:

https://www.fierce-network.com/cloud/dumb-pipes-or-ai-powerhouses-telcos-face-identity-crisis

Full REPORT: “Risk, Reward and Revenue: Defining telcos’ role in the AI economy.”

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