Telecom Operators Embrace AI and Cloud to Modernize Networks

Telecom Operators Accelerate AI-Driven Cloud Adoption

Telecom operators worldwide are rapidly adopting cloud infrastructure and artificial intelligence (AI) to revolutionize their operations. Market research firm Omdia forecasts that global spending on cloud technology and software for telecom networks will surge from $17.4 billion in 2025 to $24.8 billion by 2030, reflecting an annual growth rate of 7.3 percent. This significant investment highlights the industry’s dedication to transitioning from traditional systems to advanced, AI-driven frameworks. The shift is vital for improving operational efficiency, network scalability, and service flexibility in the era of 5G and edge computing.

The trend is accelerating, with Omdia projecting a 12 percent growth rate in 2025—twice as fast as in 2024—thanks to the advancement of cloud tools, automation technologies, and AI-driven network management. By implementing software-defined, cloud-native platforms, telecom providers can harness AI to automate network deployment, expansion, and upkeep. This transformation is unlocking new revenue streams while meeting the increasing demands of modern connectivity solutions.

AI: The Cornerstone of Telecom Evolution

The role of AI in the telecom sector has become indispensable, with over 62 percent of companies citing it as a critical factor when choosing cloud infrastructure solutions, according to Omdia. Industry giants like NVIDIA, Red Hat, and VMware are equipping telecom operators with on-premises AI solutions to optimize performance, predict maintenance needs, and detect fraud. Similar to how companies use platforms like Google Vertex AI and AWS Bedrock for specialized AI applications, telecoms are leveraging customized AI solutions to elevate their network performance and respond to consumer demands more effectively.

However, transitioning to AI-powered systems presents operational challenges. For instance, telecom operators must carefully navigate the shift from virtual network functions (VNFs) to container-based network functions (CNFs) to avoid service interruptions. Inderpreet Kaur, Senior Analyst at Omdia, emphasizes the need for balanced investments in platforms that support both VNFs and CNFs. This modernization is facilitating the adoption of Kubernetes-based environments, which are expected to grow at an impressive annual rate of 25 percent, making outdated virtual machine-only approaches a thing of the past.

The Role of Public Cloud and Standardized Platforms

While most telecom network functions remain on-premises due to performance requirements and regulatory compliance, the use of public cloud services is on the rise. Omdia predicts that public cloud adoption for telecoms will increase from 3 percent in 2024 to 13 percent by 2030, signaling growing trust in cloud providers to offer telecom-specific solutions. This shift is marked by the development of platforms capable of managing hybrid environments that integrate both VNF and CNF systems.

One industry standout is Red Hat, which currently dominates 25 percent of the cloud infrastructure management market. Their platform’s ability to seamlessly connect VNFs and CNFs demonstrates the importance of standardization and compatibility in managing mixed environments. The move to containers and Kubernetes is not the ultimate goal but rather a stepping stone toward achieving fully automated, AI-enabled operations that drive business value and innovation.

The Future of Telecom Infrastructure

The telecom industry’s momentum toward AI-powered, cloud-based architectures sets the stage for a dramatic transformation over the next decade. Future infrastructure must prioritize AI readiness to meet growing demands for automation and intelligent network management. Transitioning to cloud-native systems is no longer optional but a necessity to remain competitive in an increasingly digital world.

For telecom leaders and other businesses alike, the message is clear: invest in smart, cloud-native, AI-driven operations to secure long-term agility and scalability. While the journey to adopt these technologies may be complex, the operational and competitive advantages they provide are pivotal to thriving in the evolving connectivity landscape.