Telecom operators link AI goals to cloud spend

Telecom operators are speeding up their move to the cloud because they want to automate their operations using AI.

Omdia predicts that global spending on cloud tech and software for telecom networks will jump from $17.4 billion in 2025 to $24.8 billion by 2030. This shows a steady growth of 7.3 percent each year, which means a big change in infrastructure.

For business leaders, this investment is an example of handling the switch from old systems to more flexible AI-powered setups. The trend is picking up fast; Omdia predicts 12 percent growth in 2025, twice as fast as in 2024. This increase is driven by better cloud tools, automation systems, and the use of AI in network operations.

The main result for companies is much better efficiency and service flexibility. By switching to software-defined, cloud-based platforms, telecom companies can use AI to automate how they set up, expand, and manage networks. This is key to creating new ways to make money and handle the needs of 5G and edge computing.

AI is a vital part of this new way of doing things. Omdia says that over 62 percent of companies now think AI is crucial when deciding on cloud infrastructure. Telecoms are starting to use on-site AI from companies like NVIDIA, Red Hat, and VMware, running AI to improve networks, predict when maintenance is needed, and spot fraud. This is similar to what other businesses are doing by using special AI platforms, like Google Vertex AI or AWS Bedrock, to create and grow AI applications.

Of course, this change comes with operational challenges. The main issue is moving from old, virtual network functions (VNFs) to new, container-based network functions (CNFs) without causing problems.

According to Inderpreet Kaur, Senior Analyst at Omdia, telecoms are quickly updating their infrastructure to support cloud-based network functions and AI automation. This update needs a careful balance.

“Telcos are rapidly modernising their infrastructure to support cloud-native network functions and AI-driven automation,” said Kaur. “The migration to CNFs is encouraging telcos to focus their investments on platforms that support both VNFs and CNFs.”

While spending on new platforms based on Kubernetes is expected to grow quickly at 25 percent each year, spending on older VM-only setups is slowing down. At the same time, most network tasks stay on-site for performance and legal reasons, but the use of public cloud is increasing. Omdia expects public cloud use for these funcations and AI tasks to increase from 3 percent in 2024 to 13 percent by 2030, as big cloud providers introduce more telecom-specific solutions.

Moving to containers and Kubernetes isn’t the final goal; it allows automated systems that add business value. Omdia’s study shows that a vendor’s ability to automate the entire process of managing clusters is what sets them apart.

Standardising platforms is important for managing mixed setups. The report says Red Hat is the leader in cloud infrastructure management with 25 percent of the market, which shows the need for a platform that can connect VNF and CNF environments.

The future of infrastructure depends on its ability to run AI. The focus is now not just on virtualisation, but on creating a setup that can handle the AI automation that will shape the next ten years of operations.

Tech leaders everywhere, not just in the telecom industry should note: to prep for the future with a smart setup, you need to switch to a cloud-based, automated, and AI-ready base. This change isn’t easy, but the boost in speed and flexibility it offers is now a must-have to retain a competitive edge.

See also: How Vodafone is tapping AI to automate 5G network operations

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Tags: ai, automation, cloud, connectivity, infrastructure, networks, telecoms