The rapid rise of neocloud providers is introducing new pressures on telecom networks, forcing both vendors and operators to adapt to faster scaling cycles, unpredictable traffic patterns, and evolving operational models.
According to Mark Bieberich, vice president of portfolio marketing at Ciena, the first defining characteristic of this segment is its pace. “There’s a growing number of them. They are increasingly well capitalized and they have a lot of investment to go out and fulfill their business models,” Bieberich told RCR Wireless News.
That growth is being driven by strong demand for AI infrastructure across enterprises, hyperscalers, and cloud providers. As a result, network requirements are expanding quickly, often outpacing internal expertise. “Many of the neoscalers do not have a deep bench of optical expertise or network engineering know-how… the network is not always something that they know exactly how to operationalize and to scale.”
This dynamic is creating new opportunities for vendors and service providers to step in with both infrastructure and operational support. At the same time, it is reshaping how networks are deployed—particularly for players without owned fiber assets.
“If they do not own their own fiber… then they’re relying on the service provider community for wavelength services,” Bieberich said, adding that these services are critical in early growth phases. However, as operators scale, control becomes a priority. “They need more control over how the network behaves… and how to add capability to the network.”
The result is a hybrid model, where some neocloud providers continue to rely on wholesale services while others begin building and operating their own networks. This shift is also opening new monetization paths for telecom operators. “They have the ability to bring to market more flexible, more on-demand, dynamic services at higher rates of capacity to meet the neoscalers’ needs,” Bieberich said.
At the same time, AI workloads are driving fundamental changes in traffic patterns. “The demand for AI applications is unpredictable… the level of bandwidth that’s required at any given time really can’t be predicted right now,” Bieberich said.
To address this, networks must become more flexible and programmable. “That behavior necessitates a lot of flexibility in the network… the ability to turn on bandwidth fast and in lockstep with customers’ demand.”
As neocloud providers scale, the combination of rapid growth, limited in-house expertise, and unpredictable demand is redefining how networks are designed, deployed, and operated.
