Telecommunication companies are entering a new phase as artificial intelligence pushes networks toward software-driven architectures — but telco transformation may struggle more with internal change than with the technology itself.

With all the enthusiasm around AI, there is also a recognition that while much is changing, telecom’s fundamental purpose — reliable, ubiquitous connectivity —  remains the same, according to Chris Lewis (pictured), managing director of Lewis Insight Ltd., an independent telecom industry advisory firm. The bigger obstacle to transformation may well be organizational rather than technical.

“The biggest challenge is people at the moment, because breaking down the silos and talking about how, within a telco organization … they’ve built themselves up, focused on building the network and eventually they offer a service to the customer,” Lewis told theCUBE. “The relationship between the engineering [side] … and then the lines of business who make the products and sell the products and the channel, it’s a massive change.”

Lewis spoke with theCUBE’s John Furrier and Dave Vellante at MWC Barcelona, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed how telco transformation is increasingly being driven by organizational change, as operators struggle to break down internal silos between engineering, information technology and business teams responsible for building and selling services. (* Disclosure below.) 

Telco transformation in focus

One way to understand how uneven telco transformation has become is to look at where network investment and traffic growth are actually occurring. The explosion in inter-data center traffic — where hyperscalers and global backbone providers dominate investment — stands in sharp contrast to what’s happening on the access network, where telecom operators still generate most of their revenue, Lewis said.

“What’s interesting is that the real edge out to you and I as users — or individuals in the business — AI’s not really impacted that traffic yet,” he noted. “It’s about 1% of access traffic.”

That divide is also shaping how the industry thinks about the network edge. The real inflection point will come when AI models begin running directly on phones, laptops and other endpoint devices — a shift that could dramatically change traffic patterns across telecom networks. In that scenario, operators will need to prioritize uplink capacity rather than simply focusing on peak downlink speeds, Lewis explained.

“We’re moving away from a predominantly downlink model to an uplink model,” Lewis said. “I think we have to be very careful not to confuse the explosion of traffic going on in data centers, between data centers and what’s actually happening out on the access network, because … the access network is where the telcos actually make most of their money.”

Yet even as AI reshapes network architecture and opens new opportunities for telecom operators, the industry’s core responsibility remains unchanged: delivering reliable connectivity for the services people rely on every day, Lewis said.

“I think the issue today is that telcos have got to invest — and they are investing — to make sure their systems and their processes work most efficiently because we rely on those guys,” he explained. “They’re not going to go away. We need that connectivity to be in place. In fact, we need it even better than it has been.”

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of MWC Barcelona:

(* Disclosure: TheCUBE is a paid media partner for MWC Barcelona. Sponsors of theCUBE’s event coverage do not have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE