A tale of two industries, then – right here, at the top of this newsletter stack. These two reports, both by Juan Pedro, capture opposite ends of the same AI infrastructure value chain – where hyperscalers, compelled to build new AI production engines, are fearless, agile, borderless, cash-rich, disruptive, scalable, and engaged in an arms race where under-investing might; and telcos, prompted to build new AI delivery networks, are fearful, entrenched, regulated, regulated, yield-oriented, defensive, linear, and burned by the scanty-ROI hype experience of their 5G build-outs, and disinclined to gamble the house all over again. Show me the money, first.

Dell’Oro Group says the RAN market was basically flat in the quarter, continuing five quarters of “stability” – treading water, in other words, between generational upgrade cycles. Of course, RAN means mobile, and telcos are, variously, trenching and ducting in more urgent fashion elsewhere, to bring AI workloads into internet pipes. Most of the telco cap-ex upside right now is with fiber and optical for transport, backbone, and interconnect networks. Where the sector used to be dictated by go-faster Gs, it is now, suddenly, following the geography of AI infrastructure demand – between data centers, everywhere, and into metro exchanges, plus other points of departure.

At some point soon (2027/28, before 6G is a new G-thing), it will encroach on RAN infrastructure, too – in national, metro, and edge setups. So the Dell’Oro headline doesn’t say everything, of course. Still, Moody’s projection – that hyperscaler cap-ex might approach $1 trillion next year; a 27 percent jump in just 12 months – underlines how different these industries are (of course), even as they combine in pursuit of this sketchy AI promised-land. The problem for telecoms, which every telco is grappling with, is that AI might drive future network usage, but not necessarily future telecom profitability. Hyperscalers have no such worries, even if the future is unclear.

AI is becoming their whole business model, very quickly. Moody’s says outstanding performance obligations surged by $700 billion over two quarters – meaning years of locked-in AI demand. Which explains their cap-ex philosophies, to an extent – miss the boat, and miss out; or catch a sail, and get dunked anyway. On one hand, the urgency to spend is a defensive position; on the other, the reluctance to spend is a defensive position. Which is why AI is an arms race for Big Tech, and unlike old infrastructure cycles in small tech. Even the warnings about a dotcom-style bubble burst seem hollow – because, unlike then, hyperscalers have truckloads of cash, and brilliant ecosystems.

Which is not to say there aren’t economy-sized risks with AI cap-ex; it just explains the logic behind different sectors’ gambles on the tech. The rest can be discussed another day.

In the meantime, don’t forget Test & Measurement Forum tomorrow (May 19) – where industry leaders, innovators, and engineers come together to tackle the most pressing test and measurement challenges in telco today. AT&T, Nokia, Rakuten Mobile, and Litepoint, Spirent, Viavia, plus lots of others will talk about intelligent networks, 6G, open RAN and NTNs – and the telco tactics about lots of what’s talked about in the column here. Shoule be good; hopefully see you there!

James Blackman
Executive Editor
RCR Wireless News

RCR Top Stories

RAN remains flat: Stable operator spending and regional improvements helped sustain the global RAN market in the first quarter, though Dell’Oro expects only modest long-term growth as carriers remain cautious on capex.

AI capex surges: AI-driven infrastructure expansion is pushing hyperscaler capex toward $1 trillion by 2027, according to Moody’s, as cloud providers race to meet surging compute demand despite rising financial pressures.

AI in Global South: Foxconn, Bull, and Amini are building sovereign AI infra across Africa and the Global South for governments, telcos, financial institutions, and energy companies – designed to be modular, and under local control.

Scaling telco AIOps: AIOps has helped operators improve visibility, correlate events, reduce alarm noise, and support root cause analysis. The next phase will be marked by converting AI-generated insight into governed, repeatable actions.

Sean & Will, part 4: In the latest episode of Beyond the Network, Sean Kinney and Will Townsend dig into the weird world of quantum computing, including about quantum-safe networking and a look at Cisco’s Universal Quantum Router.

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Beyond the Headlines

Schulman was right: Why CSPs are losing the customer relationship, betting on only half the experience, and where they can grab the other half – Alan Minney at MCE Systems has the answer.

Alibaba ups AI infra: Chinese company Alibaba Cloud plans a major expansion of AI infrastructure after reporting strong AI-driven cloud growth, with CEO Eddie Wu saying compute capacity could grow tenfold from 2022 levels.

Modular AI DCs: Data center operators are opting for modular, prefab infra designs for faster time to build and reduced construction risks, allowing deployment timelines to align with economics of AI infrastructure.

D2D for dead zones: US telcos AT&T, Verizon, and T-Mobile plan a joint venture to expand satellite-based direct-to-device coverage, as analysts say the move could accelerate the broader U.S. D2D ecosystem and reshape connectivity economics.

Federated telco edge: Vodafone and other big Euro telcos are advancing a federated edge-cloud as a home-grown hyper-scaler alternative to support sovereign AI and IoT workloads – attached to SLA-backed 5G slices, and the like.

What We’re Reading

Turkish AI infra: Colt has expanded its Istanbul network to boost capacity, resilience, and low-latency services for enterprises and data centres, while strengthening Türkiye’s role as hub linking Europe and Asia.

BAE taps BT: BT has a five-year deal with BAE Systems to provide secure connectivity across 40 countries, supporting digital change, operational efficiency, and flexible working – with an option to extend for three years.

Micronesia cable: NEC has completed construction of the East Micronesia Cable System (EMCS), a submarine cable connecting three Pacific island nations. The cable has been handed over to three Micronesian operators.

Future IoT networks: Kaleido Research, on behalf of floLIVE, takes a look at how IoT providers should reevaluate how they position network infrastructure on account of regulatory impacts and enterprise AI workload requirements.

OneLayer alliance: OneLayer has launched a Technology Alliance Program to bring together partners including Nokia, Ericsson, and Fortinet to accelerate secure private 5G adoption through integrated zero-trust solutions.

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