AI could become a new revenue engine for Indian telecom companies: Survey

Indian telecom and network service providers are increasingly looking at artificial intelligence not just as a technology upgrade, but as a new source of revenue, according to a recent survey by network technology company Ciena.

As many as 67% of Indian service providers surveyed strongly believe AI-driven network services will become a major driver of revenue growth over the next three to five years. Another 27% somewhat agree with the view.

The survey, conducted by Censuswide for Ciena among 1,200 telecom providers, wholesale fibre operators and regional service providers across 12 markets, included 100 respondents from India.


But what exactly will telecom companies sell to make money from AI?

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Connecting the AI infrastructure

A big opportunity is expected to come from simply connecting the growing number of AI data centres and computing clusters.

As companies build AI infrastructure across multiple locations, they will need high-speed networks to move huge amounts of data between data centres, clouds and enterprises.

Ciena's survey found that 98% of Indian respondents expect multi-operator fibre network (MOFN) services to generate revenue by connecting distributed AI computing clusters over the next three years. Nearly half, or 48%, expect this to be a significant source of revenue.

This means telecom and network providers could increasingly make money by providing the underlying connectivity that AI systems need to function.

Selling premium AI connectivity

AI workloads also require networks that are faster and more reliable than traditional enterprise traffic. That creates another potential revenue stream: charging businesses for premium connectivity with guaranteed performance.

Some 93% of Indian respondents said next-generation optical technology will be critical to making AI connectivity services profitable and competitive. Meanwhile, 88% said optical network upgrades are urgently needed to provide the low-latency and reliable connections enterprises will expect from premium AI services.

Network automation is another piece of the puzzle, with 94% calling it important or critical to capturing AI-related opportunities.

In simple terms, telecom operators will need to build smarter, higher-capacity networks first and then sell that performance to businesses as a premium service.

AI at the edge could open another market

As AI moves closer to factories, warehouses, hospitals and other workplaces, telecom companies could provide the connectivity and computing needed to run AI applications closer to where the data is generated.

This includes services such as edge computing, private wireless networks, local AI processing and GPU-as-a-Service.

Ciena said 88% of Indian respondents expect these services to generate at least 10% of their total enterprise revenue over the next three years. About 35% expect them to contribute more than 20%.

Physical AI is another emerging opportunity. This includes applications such as industrial robots, machine-vision systems and remotely controlled equipment.

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Around 93% of respondents see moderate or high revenue potential from physical AI for private networks and edge computing. Further, 59% expect physical AI to contribute more than 15% of their total AI enterprise revenue within five years.

Moving data between clouds

AI also means companies will be moving increasingly large amounts of data between different cloud platforms. That creates opportunities for telecom providers to sell cloud connectivity and bandwidth as services.

According to the survey, 58% of Indian respondents expect to generate revenue from managing multi-cloud connectivity, while another 58% see consumption-based bandwidth services as a potential revenue stream.

The basic business model is therefore shifting from simply selling a network connection to selling different layers of connectivity, computing and performance depending on what an enterprise's AI workload requires.

"After going through one of the fastest 5G roll outs globally, Indian service providers are now shifting focus to AI infrastructure builds and AI monetization," Gautam Billa, vice president, solutions engineering and chief technology officer, Asia Pacific, India and Japan, Ciena, said.

The survey suggests India's telecom industry sees AI as more than a traffic generator. The bigger opportunity could be charging enterprises for the infrastructure, connectivity, computing and performance needed to run AI applications.