Deutsche Telekom: Device-to-Cloud AI Traffic Won’t Force RAN Upgrades or Increase CAPEX
Introduction:
Deutsche Telekom is in the process of “upgrading mid-range plans,” according to Dhananjay Mirchandani, DT’s senior VP for group controlling and the group’s next CFO from May 1, 2027. “I cannot recall a single conversation in which Alex Jenbar [CTO of Telekom Deutschland] … or somebody else approached us and said, ‘in addition to whatever we currently have on our roadmaps for RAN modernization, that there is an incremental requirement for an investment to be able to prepare ourselves for additional uplink/AI-related traffic,'” he said. “[That’s] just to give you a sense of the degree of confidence we have in terms of our own capex planning, specifically related to mobile network capacity,” he added. His assessment on medium-term mobile capacity is bound to be sobering for its radio access network (RAN) vendors in Germany: Ericsson, Huawei and Nokia.
The rise of agentic and physical AI could upend decades of mobile network design that dedicates most bandwidth to download speeds (i.e., downlink) and much less to the data channels for uploads (i.e., uplink). It’s not certain how or when traffic patterns will change in a big way, but telcos are talking about preparing for a wave of AI-fueled traffic coming from smartphones, smart glasses or robots.
The Reality Check – No Incremental RAN Capex:
During an investor event, financial analysts directly pressed Deutsche Telekom’s incoming CFO, Srinivas Mirchandani, on whether capital intensity would escalate after 2027 to handle the upstream traffic generated by physical AI, wearables, and smartphone-based LLM queries.
• The Stand: Mirchandani honestly noted that he could not recall a single internal conversation where the CTO of Telekom Deutschland (Alex Jenbar) requested incremental investment beyond their existing radio access network (RAN) modernization roadmaps to handle AI uplink traffic.
• The Baseline Numbers: DT’s long-term guidance (established at its 2024 Capital Markets Day) mandates that capital spending outside the U.S. and spectrum will sit at 21% of service revenue by 2027. While DT is trading slightly above that now, it is entirely due to heavy fiber-optic rollouts in Germany, not mobile radio expansions.
| Attribute | Deutsche Telekom (Europe Group) | T-Mobile US |
|---|---|---|
| Capex Stance | Rigid cap on mobile intensity; excess savings diverted strictly to German landline fiber infrastructure. | Confirmed network architecture expansion funded via standardized 5G-Advanced cycles. |
| AI Traffic Philosophy | Believes traffic peaks are manageable within existing, scheduled modernization roadmaps. | Views the network explicitly as the “connective tissue for physical AI and AI wearables.” |
| Uplink Solutions | Delaying heavy structural changes; emphasizing spectrum efficiency under legacy boundaries. | Implementing Uplink Carrier Aggregation, Uplink MIMO, and Transmit Switching under 5G-Advanced. |
- Delaying Capex via Software: Panelists from across the telco ecosystem—including Turkcell and Deutsche Telekom’s own group partnering division—noted that AI is actually delaying capex cycles rather than accelerating them. Operators are deploying AI algorithms inside the radio access network to optimize power consumption, conduct predictive capacity planning, and boost edge throughput. In short: AI software is making existing hardware last longer.
- The Opex ROI Conundrum: Telcos are seeing immediate financial returns from “AI for the network” (e.g., DT projects €2.5 billion in cumulative cost savings by 2030 through AI automation). However, the business model for a “network for AI”—where consumers or enterprise clients pay a premium for high-speed, low-latency uplink to feed remote LLMs—remains entirely unproven.
- The 6G Boundary Wall: Most Tier-1 operators now view massive, structural upstream re-architecting as a 6G-era investment narrative rather than an immediate 5G sub-6GHz demand. Until dedicated enterprise use cases validate moving further up the value chain, hardware vendors will have to wait for a significant revenue lift from device-to-cloud AI traffic.
Source: Deutsche Telekom, Photo: Norbert Ittermann
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Conclusions:
Deutsche Telekom (DT) indicates that rising device-to-cloud traffic volumes will not necessitate premature radio access network (RAN) upgrades. Technical analyses suggest that upcoming capacity demands driven by agentic AI may not immediately accelerate RAN capital expenditure.
DT does not see AI uplink traffic driving an incremental increase to its RAN capex plans in the medium term. DT is holding a rigid perimeter around its long-term financial guidance. By 2027, capital intensity (excluding the US and spectrum) is strictly capped at 21% of service revenues. Excess capital is not being funneled into expanding cell site capacities for upstream AI traffic; it is being aggressively diverted toward landline fiber-optic buildouts in Germany.
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- Uplink Carrier Aggregation (CA): Allows the network to combine multiple frequency bands (e.g., mid-band and low-band) exclusively for the upstream path. This maximizes the utilization of already-deployed spectrum without requiring operators to acquire or build new macro tower infrastructure.
- Uplink MIMO & Transmit Switching: Enhances data throughput from consumer AI wearables and smartphones back to the cloud by multiplying the data paths between the device and the tower antenna arrays. [1]
- Network Slicing: Under 5G SA, carriers can allocate a virtualized, highly efficient “slice” of the existing spectrum explicitly for low-latency AI queries. This avoids general network congestion and isolates upstream data paths without needing incremental physical hardware upgrades.
References:
https://www.openranforum.com/home
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