The Information and Communication Technology (ICT) industry stands at a crossroads, balancing immense growth opportunities and significant challenges. While rapid technological advancements promise boundless possibilities, obstacles such as trade wars and geopolitical tensions threaten to impede progress.
Recently, the global economic environment has been strained by the US's new tariff plans, which could likely affect the ICT industry as a whole. As global demand for computing power surges, leading data center players are gearing up for a massive capital deployment, investing approximately USD 1.8 trillion from 2024 through 2030, according to BCG. However, tariffs could drive up the cost of materials needed for data center infrastructure, exacerbating supply chain constraints.
ICT has been proven to enhance organizational efficiency, boost productivity, reduce costs, and drive innovation.
Agility and Innovation
To navigate the choppy waters, telecom companies must remain innovative and resilient. Over the next decade, intelligence will catalyze a significant shift in the ICT industry, opines Bob Chen, President of Huawei Optical Business Product Line. Predictions indicate that the compound annual growth rate (CAGR) of global intelligence-related investment will reach 26.9%, with AI and automation increasingly being leveraged by enterprises, households, and individuals.
Competition around AI foundation models is expected to intensify as enterprises and government agencies integrate intelligence into various operations, including disaster prediction, public security, financial risk control, marketing, and manufacturing. At the individual level, innovations such as AI assistants, cloud esports, smart homes, and cloud computing will transform daily experiences.
Strategic network planning is essential for communication service providers (CSPs) to meet future demands. The planned transition away from legacy networks is a crucial component of telco growth strategies, whether it be through greenfield deployments, competitive overbuilds, or the replacement of outdated copper and coaxial networks with fiber infrastructure.
Chen stressed that building robust infrastructure networks and leveraging the synergy between computing and networking is crucial for business success in the AI-driven age.
Networks need to be upgraded in three parts. The first is bandwidth. AI applications require higher network bandwidth for multi-modal interaction. The second is latency. The device-cloud synergy mode of AI applications requires deterministic low latency. The third is reliability. Intelligent computing training and collaboration have higher requirements on network reliability.
Moreover, cloud-native technology is becoming indispensable in unlocking the full potential of 5G and will be a prerequisite for 6G and beyond. Early adopters of this transformation stand to gain a competitive advantage, ensuring quicker functionality deployment and industry leadership.
Modern network architectures, including 5G Core and Cloud RAN technologies, have already been designed with a cloud-native approach, highlighting the inevitability of network transformation as part of modernization efforts. Industry leaders like Zain KSA are advancing Cloud RAN through partnerships with Nokia, while Mycom (newly rebranded) is enhancing network assurance via AWS. Meanwhile, du is supporting hybrid cloud transformations, and AWS is facilitating large-scale cloud transitions, such as RTA’s migration.
Long-Term Investment for Sustained Growth
To sustain its growth, the telecom sector must attract long-term global investment while working closely with regulatory bodies. For instance, UAE-based CSPs should collaborate with the Telecommunications and Digital Government Regulatory Authority (TDRA) to implement forward-thinking policies, streamline regulatory procedures, and embrace digital transformation.
Li Peng, Huawei’s Corporate Senior Vice President and President of ICT Sales and Service, delivered a keynote speech at the Global MBB Forum 2024. He shared his views regarding the state of intelligence within the ICT industry, and expanded on how entities can make the most of new opportunities in an era in which AI is changing every aspect of our lives and work.
AI agents will change how we work and live. They will facilitate the introduction of intelligent services everywhere and drive explosive growth in data.
Operators need a new framework to guide capital expenditure (CapEx)/operating expenditure (OpEx) spending to ensure a strong return on investment (ROI). Instead of focusing solely on cost reductions, companies should strategically allocate investments to drive growth. A proactive approach—scouting potential partnerships, involving external stakeholders, and exploring netco-based models and mergers and acquisitions (M&As)—will attract investor interest.
For instance, center3’s acquisition of CMC Networks is enhancing its global connectivity footprint, while SES’s USD 3 billion acquisition of Intelsat has created a dominant multi-orbit satellite operator. ZainTECH’s purchase of Adfolks has boosted its cloud and AI service offerings, and Nokia’s acquisition of Infinera has advanced its optical networking capabilities. Meanwhile, Amphenol’s acquisition of CommScope’s Outdoor Wireless Networks business has revived the ANDREW brand, and Salam’s dual strategy of selling fiber assets to TLS while acquiring a 60% stake in the company reinforces the potential of infrastructure-driven growth investments.
Similarly, academia and industry collaboration are essential to address foundational industry challenges and drive innovation.
Unconventional Verticals
Apart from traditional business growth models, telcos must explore innovative service offerings to achieve long-term success. For instance, in the automotive sector, connectivity infrastructure investments in network slicing, AI-powered radio controllers, and cloud-native architectures will optimize logistics, digital tools, advanced driver assistance systems (ADAS) technologies, and parts distribution.
This strategy extends to the broader business-to-business (B2B) space, where network application programming interfaces (APIs) can be leveraged to enhance 5G monetization and create new applications by utilizing 5G features such as speed-on-demand, low-latency connections, and edge computing. Moreover, APIs bring significant business benefits and opportunities that stand to contribute to emerging technologies such as the Internet of Things (IoT), blockchain technologies, wearable technologies, and so on.
In an exclusive interview with Telecom Review, Atul Purohit, Head of Technology, Cloud and Network Services, EMEA, delved into the intricacies of how APIs function within the framework of network monetization for operators.
Looking at the value of APIs in the medium- to long-term, high-value APIs like Quality of Service on Demand (QoD), or network slicing APIs, makes a lot of sense because the Middle East region has different use cases across various industries, such as oil and gas and ports, which are inherently ripe for high-value applications.
By investing in sustainability initiatives, the ICT industry can inherently improve its financial performance while appealing to investors, governments, and customers. With over USD 50 trillion in assets managed by environmental, social, and governance (ESG) investors, telcos prioritizing green solutions could benefit from higher valuations and external investment. Additionally, with 30-50% of corporate profits potentially impacted by environmental regulations, sustainability can be considered both a business imperative and a strategic opportunity.
To optimize energy efficiency and consequently reduce operating expenses, operators can leverage four key strategies: utilize a zero-based design approach to mobile network site creation, optimize energy through analytics, strategically innovate in energy procurement, and decommission legacy fixed networks.
Also Read: Partner, Build, or Buy? How Telcos Can Succeed in the Long-Run
An Opportunity to Embrace Digital Transformation, Internally
Telecom infrastructure is the backbone of digital transformation. Despite ongoing challenges, telcos possess valuable assets, including strong brand images, extensive customer bases, rich data sets, vast infrastructure, and skilled talent pools.
Opportunities abound for telecom operators willing to embrace internal transformation. By leveraging their strengths and adapting to a rapidly evolving industry landscape, telcos can position themselves for long-term success, regardless of the strategic path they choose.
Also Read: Collaboration and Innovation: The Factors Driving ICT Forward in 2025
