Telcos are becoming the AI economy’s lifeline

Telcos are in a position to significantly contribute to the growth of the AI economy. Hailed as the technological revolution of our time, artificial intelligence is using more energy and computing power than ever before. Nevertheless, a crucial obstacle still exists: AI’s ravenous need for real-time, high-quality data to reach its full potential.

This discrepancy between data availability and computation capacity has become a problem for the entire business. These days, sophisticated AI models use as much energy as 1,000 households a year. However, because of inadequate access to the appropriate data streams, an astounding 40% of that compute capacity is left idle. Meanwhile, it’s estimated that more than 65% of AI research initiatives fail or are delayed due to data-related bottlenecks. 

Enter telcos, armed with vast networks and access to 180 zettabytes of annual global data traffic. Now, telcos have the opportunity to evolve beyond mere connectivity providers to become the critical enablers of AI-driven innovation, unlocking a multi-billion-dollar market by monetising data streams.

The AI Data Paradox: Compute Without Content

With strengths in language, vision, predictive analytics, and other areas, AI models are developing at a rapid rate. However, these models’ efficacy depends on their ability to obtain high-quality, real-time data. When data pipelines are ineffective or lacking, AI systems struggle even with increases in processing capability. This inefficiency is a huge waste of resources in addition to impeding innovation.

To close this gap, telcos are in a unique position. Global connectivity is already supported by their infrastructure, which creates and handles enormous data streams from smart cities, industrial IoT networks, consumer devices, and more. IDC estimates that 90% of the world’s data is “dark data”—info that has been gathered but never used—pointing to an untapped resource that telecoms might take advantage of. By strategically activating this data, telcos can solve the paradox of idle compute power and unmet AI potential.

The Untapped Goldmine: Telco Data Streams

Telecom companies are at the centre of the skyrocketing growth in global data traffic. IoT devices and connected ecosystems are predicted to generate 75% of all data in real-time in 2025. However, rather than being a primary source of income, a large portion of this data has long been viewed as a consequence of connectivity services. This view is shifting. Telcos are starting to see how valuable their data assets are, especially when it comes to enabling AI processes.

Key Opportunities for Monetisation:

1. Real-Time Data for AI Training: Whether used for conversational AI, autonomous systems, or predictive analytics, AI models flourish on real-time data streams. In order to facilitate quicker and more precise training cycles, telcos can bundle and sell anonymised, aggregated statistics to AI developers.
2. Partnerships for Edge Computing: As 5G networks proliferate, telcos are able to provide edge-based, low-latency data processing. According to McKinsey, up to 75% of enterprise-generated data will come via edge computing by 2025, opening up a $250 billion market.
3. AI-owered Services for Enterprises: Telcos may offer value-added services like hyper-personalised marketing solutions for enterprises or predictive maintenance for industrial equipment by fusing their data assets with AI capabilities. According to studies, businesses that use predictive AI can save up to 20% on operating expenses.
4. Energy Optimisation Solutions: Given the energy-intensive nature of AI, telcos can leverage AI-driven insights to optimise their own network operations, reducing costs and improving sustainability. These solutions can then be offered to enterprise customers facing similar challenges.

Challenges on the Road Ahead

While the opportunities are vast, telcos face several hurdles in capitalising on this market. One major challenge is data privacy and security. As custodians of sensitive data, telcos must navigate complex regulatory landscapes to ensure compliance while monetising their data assets. Transparent data handling practices will be crucial in building trust with both customers and partners.

Another key challenge is interoperability and scalability. To support diverse AI workflows, telcos must ensure their platforms and data pipelines are compatible with various AI tools and frameworks. At the same time, scalability will be critical to meet the growing demand.

Finally, telcos face the need for a cultural shift. Transitioning from a connectivity-focused mindset to a data-centric business model requires significant organisational change. This includes investments in talent, training, and the development of new business processes to support this transformation.  

Why 2025 is the Inflection Point

Several converging trends make 2025 the perfect storm for telcos to embrace this new role:

• Maturation of AI Ecosystems: AI technologies have reached a level of maturity where real-world applications are driving significant economic value. This creates a surge in demand for reliable data streams.
• 5G Expansion: The global rollout of 5G networks provides telcos with the infrastructure needed to deliver high-speed, low-latency data services essential for AI applications. By 2025, the global 5G market is projected to exceed $700 billion.
• Growing Awareness of Sustainability: As AI’s energy demands come under scrutiny, telcos can offer solutions to optimise compute-resource utilisation, aligning with global sustainability goals. Reports indicate that optimising AI workloads could reduce energy consumption by up to 30%.
• Shifts in Enterprise Strategy: Enterprises across industries are increasingly adopting AI to gain competitive advantages. A Gartner study predicts that by 2025, 60% of organisations will use AI-driven insights to enhance decision-making, doubling demand for reliable data streams.

Telcos as AI’s All-You-Can-Eat Buffet

2025 is shaping up to be the year telcos stop being mere delivery drivers of data and start operating as the all-you-can-eat buffet for AI’s voracious appetite. By unlocking the value of their data assets, telcos can transform their role in the digital economy, becoming indispensable players in the AI ecosystem.

This evolution is not just about new revenue streams; it’s about redefining what it means to be a telco in the 21st century. The companies that seize this moment will not only drive AI innovation but also secure their position as leaders in a data-driven world.

As we enter this exciting new chapter, one thing is clear: the future of AI and the future of telcos are inextricably linked. Together, they will shape the next wave of technological progress, transforming industries and societies alike.

Photo by Nick Fewings on Unsplash

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Tags: ai, data, Iot, traffic