AI is a ‘monster of an opportunity’ for telcos – but also an outsized risk unless they adopt one of three strategies, finds STL Partners
3 min read- Telcos can benefit greatly from the potential to carry and process distributed AI workloads
- However, they need to play smart and invest carefully
- STL Partners suggests specific recommendations depending on telcos’ strategic approaches
LONDON – – 10 April 2025 – Telcos have a huge potential opportunity to carry and process distributed AI workloads, but they need to be strategic in how they prioritise their network investments because it is impossible to predict how these workloads will spread out across the network.
This is the key takeaway from STL Partners’ latest report, ‘Networks for AI: Segmenting the growth’, which outlines recommendations for operators that seek to capture new opportunities unlocked by the rapid development in AI.
“AI is a monster of an opportunity – but it will take human intelligence and judgement if telcos are to capture it and not be consumed by it,” claims David Martin, senior analyst and author of the study.
The report takes a deep dive into three broad strategic approaches that telcos can take to capturing the AI networking opportunity: AI connectivity and infrastructure provider (also known as the ‘infraco’ play); AI enabler and service provider (‘servco’); and AI company (‘techco’).
For each of these strategies, the risk and the potential reward profile for the same types of investment are “radically divergent”, because “there is no magic silver bullet that will pay off for all types of telcos”, Martin explains.
He further suggests that telcos’ investments in AI inferencing capabilities at the edge are challenging from a skills and technology perspective, and are also unlikely to generate significant short- to medium-term return on investment – so any telcos wanting to splash out on GPUs at the RAN (the AI-and-RAN concept of the AI-RAN Alliance) should carefully qualify the business case for such a move first.
Investments in AI infrastructure, services and technologies by different types of telcocost of a one-month delay of an indicative data centre project
“Telcos should pursue a balanced investment strategy. They should not ‘put all of their eggs in one basket’ by overemphasising any one particular strategy or investment that may prove short-lived”, Martin concludes.
Find out more insights from the report by downloading a summary here.
For media enquiries, click here to get in touch with our team.
STL Partners is a leading research and consulting company that focuses on the telecom industry and adjacent markets by helping telcos and their partners innovate, grow and stay ahead of the competition.
