Telcos have high hopes for AI-enabled gains – report

• A lot of telecom sector hopes are being pinned on AI
• Ciena commissioned a study to gauge what kind of impact it could have
• An extensive survey of telco and IT engineers found that a majority believe network efficiency gains of more than 40% are possible
• And the vast majority expect telcos to generate new revenues from AI traffic

There are high hopes in the telecom sector that the increasing use of AI tools will lead to improvements in the efficiency of network operations and, according to the results of a recent survey of telco and IT engineers conducted on behalf of Ciena, about 60% of respondents believe efficiency gains of more than 40% are very possible. 

The survey garnered the opinions of more than 1,500 telecom and IT engineers and managers at communications service providers (CSPs) in 17 countries across the world, and it seems clear that AI capabilities are regarded as some kind of silver bullet for network operations teams at a time when data traffic loads are already putting great strain on networks. In addition, the increasing use of cloud-based AI workload processing will only add further pressure on telco capex and opex budgets as petabytes of data flow between enterprise IT systems and cloud platforms.

The rosy outlook isn’t just limited to the potential for AI-enabled operational efficiencies, as 85% of the survey respondents expressed confidence (either very confident or somewhat confident) in the ability of CSPs to “monetise AI traffic across networks.” The industry verticals that are expected to generate the most AI traffic (and therefore offer up the best revenue opportunities) are financial services (identified by 46% of respondents), media and entertainment (43%), and manufacturing (38%). 

As for how those new revenues will be generated, Ciena notes that: “40% believe it will be from opening their networks to third-party integrations; 37% believe revenue will come from security and privacy services; the same number (37%) believe it will come from new product offerings; 35% believe it will be from the creation of tailored subscription packages; and 34% believe revenue will be from differentiation on quality of service for connectivity.” 

Interestingly, there were some stark differences between respondents from different countries when it came to the question of AI traffic monetisation: For example, the vast majority (more than 90%) of CSP respondents in the likes of India, Indonesia, Singapore, South Korea, Norway and Mexico are confident about AI traffic monetisation, whereas far fewer respondents in the US (55%) and Japan are in any way confident of such an outcome. 

Let’s hope that 85% is borne out, because if the CSPs aren’t able to generate incremental revenue streams from the AI traffic running over their networks, they’re likely to struggle even more financially, as they’ll be getting an increasingly poor return on their network investments. 

That the overall view of the survey respondents was positive was not lost on Ciena. “The survey highlights the optimistic long-term outlook of CSPs regarding AI’s ability to enhance the network as well as the need for strategic planning and investments in infrastructure and expertise to fully realise the benefits,” stated Ciena’s international CTO Jürgen Hatheier. 

And it’s those strategic investments that are of prime interest for Ciena: It wants to be at the front of the queue as and when the telcos decide they need to invest in greater data transport capacity – Ciena is an optical networking equipment giant and has an increasingly popular line of packet routing platforms – and also provide the smart software that will help the telcos achieve those network efficiency gains. Handily, Ciena’s software unit, Blue Planet, recently unveiled a cloud-native network management platform, which includes an “AI Studio that can apply machine learning and AI-based capabilities developed by CSP data science teams, Blue Planet, or third parties, to any mix of product applications or operational processes.” 

Naturally, Ciena wanted to know from the survey respondents which technologies they thought might need to be deployed in order to help CSPs benefit from AI. The good news for the vendor, and its data networking sector rivals, is that the telco respondents identified a need for new traffic and network analysis software (selected by 49% of respondents), upgrades in switches and routers (43%) and investment in 800G technology (40%). 

- Ray Le Maistre, Editorial Director, TelecomTV