As 2025 begins, cloud computing has become a cornerstone of global digital infrastructure, with significant investments flowing into the United States. Amazon, Google, and Microsoft—The Big Three—are expanding their data centers and workforce training to attract developers, enterprises, and governments to their platforms. While North America remains a critical focus, these cloud giants are also increasing their presence in global markets, including key emerging economies.
The physical infrastructure supporting “the cloud” is vast, with the U.S. hosting 37% of the world’s data centers, according to Data Center Map. Northern Virginia’s “Data Center Alley,” home to nearly 350 facilities, processes approximately 70% of the world’s internet traffic daily, showcasing its critical role in the digital ecosystem. This powerful infrastructure is the backbone for deploying advanced technologies like AI and generative AI, which rely heavily on cloud computing to scale effectively.
Cloud’s Role in Telecom and Future Growth Prospects
A study by Strategy& highlights the transformative potential of cloud adoption for telecommunications operators. By leveraging cloud technologies, companies can unlock the capabilities of 5G, edge computing, IoT, and software-defined wide-area networks (SD-WAN). Financially, the benefits are equally compelling: every USD 1 invested in the cloud generates an average return of USD 5.4, primarily through reduced capital and operational costs.
The cloud computing industry, valued at nearly USD 500 billion, is projected to grow by 20% annually through 2027. Telecom operators are at the forefront of this trend, with Juniper Research forecasting a rise in cloud service investments from USD 26 billion in 2024 to USD 65 billion by 2028. This growth is fueled by a 110% surge in cellular data usage, driven by the expansion of 5G networks and the emergence of cloud-native 6G technologies.
Cloud Expansion Fuels AI Innovation
Leading cloud providers are driving massive global investments in infrastructure, underpinned by the rising demand for artificial intelligence (AI). In 2025, EDGNEX Data Centers by DAMAC aims to develop 2,000 MW of capacity in the U.S., targeting hyperscalers and AI innovators with a transformative USD 20 billion initiative.
AWS has announced a USD 11 billion expansion in Georgia, creating over 550 high-skilled jobs and reinforcing the synergy between cloud computing and AI innovation.
Similarly, Microsoft plans to invest USD 80 billion in AI-enabled data centers during fiscal 2025, with additional billion-dollar investments in India and Mexico, also focused on cloud and AI infrastructure.
Oracle is also scaling its presence, with more than USD 1 billion allocated for cloud and AI in Spain, USD 6.5 billion for a public cloud region in Malaysia, and USD 8 billion over the next decade in Japan.
Taking this into consideration, the connection between cloud and AI is integral, as enterprises increasingly rely on hybrid cloud models to power AI and generative AI systems. Hybrid cloud enables seamless access to data across on-premises, edge, and public or private environments. This flexibility empowers businesses, particularly telecom operators, to scale AI projects and unlock the full potential of their data-driven innovations.
How Telecom Cloud Is Unlocking New Opportunities in 2025
The timeline of telecom cloud’s development, while not entirely clear, reaches a defining moment in October 2012. This date marks the publication of the “Network Functions Virtualization” (NFV) white paper, which was a catalyst for the cloudification of telecom networks. Since then, the telecom cloud has evolved significantly, and today, it’s undergoing a rapid transformation driven by the adoption of advanced technologies like 5G, edge computing, and AI.
One of the most significant predictions for the future of telecom cloud is the shift towards fully container-based platforms. Containers, as Pure Storage’s analysis suggests, are set to become the cornerstone of the telecom cloud’s future, particularly for scaling 5G services. Containers provide the automation, resiliency, and scalability necessary for efficient cloud computing. With containers, telecom providers can streamline the delivery of services, especially at the network edge, where 5G’s full potential is realized.
The telecom cloud sector is on track for substantial growth as telecom companies leverage cloud’s benefits for a variety of purposes, from scaling services to enabling technological transformation. Research from Infosys highlights how telecom companies are using cloud to deploy new services like Internet of Things (IoT), machine-to-machine communication, and robotics.
Cloud computing has become integral for delivering services efficiently, encouraging innovation, and extending global reach, especially as telecom providers look to capitalize on the promise of 5G.
According to Capgemini, the telecom cloud sector is expected to grow by 50% over the next five years, with a significant portion of global telecom network capacity—31% of 4G and 5G networks—currently being serviced by cloud platforms. This number is expected to rise to 46% in the coming years, driven by the shift to cloud-native network functions (CNFs) and software-defined networks (SDN). These advancements align with the growing demand for telecom services, especially as businesses move toward digital-first operations.
- Telecom Cloud Strategies
This transition is not without challenges, but it’s clear that telecom companies have a significant opportunity to evolve from traditional network operators to digital service providers (DSPs). This transformation is being driven by a combination of strategies: adopting NFV and SDN, integrating open-source software, implementing DevOps practices, and embracing automation and AI. These practices enable telecom providers to streamline service design and rollout, unlock opportunities related to 5G and IoT, and ultimately support sustained growth in the telecom industry.
Cloud migration has already proven highly effective, with 77% of telecom executives reporting significant cost savings and improved performance. In 2024, TELUS successfully completed its ambitious data modernization journey, partnering with Google Cloud and Onix. The migration eliminated more than 30% of obsolete data stored on older, on-premises infrastructure, significantly reducing TELUS' energy consumption and carbon footprint while delivering substantial cost savings.
Additionally, the adoption of Cloud Radio Access Networks (C-RAN) is enabling telecom operators to optimize network resources, accelerate service deployment, and improve service quality.
Telecom operators such as Rogers have already begun to embrace network slicing and cloud-native technologies, with the Canadian company trialing Cloud RAN on its commercial 5G network. Rogers believes that cloud-native technology will enable faster response times to both consumer and enterprise demands, while also improving network reliability, resiliency, and energy efficiency.
Cloud-based solutions like CloudRAN offer telecom operators the ability to build user-centric elastic networks capable of supporting both 4G and 5G connectivity. With CloudRAN, telecom operators can pool hardware resources, optimize network performance, and automate service deployment. This flexibility enables telecom providers to respond to changing market demands while maintaining high service quality.
The partnership between Dell Technologies and Ericsson is another example of how telecom operators can benefit from cloud technology. By combining their expertise in telecom software and cloud solutions, the two companies are helping CSPs navigate their cloud transformation journeys, particularly in the area of radio access networks (RAN).
- Telecom Cloud for Revenue Growth
The telecom cloud presents new business opportunities and revenue streams for telecom operators. By controlling mission-critical network assets, telecom cloud providers are poised to become dominant players in the B2B cloud market. Leveraging cloud computing capabilities enables telecom operators to enhance their software and develop customer-centric services, going beyond the role of commodity providers. This evolution allows telecom operators to remain competitive and create lasting value.
For example, Nokia has extended its multi-year agreement with Microsoft Azure for another five years to solidify its position as a key strategic supplier for Microsoft's global cloud infrastructure.
Similarly, Oracle has announced the integration of AT&T's IoT connectivity and network APIs into its Enterprise Communications Platform (ECP). This integration allows Oracle's industry cloud application customers to seamlessly connect and manage their IoT devices on the AT&T network, all within a single unified platform.
In Q4 2024, Lumen and AWS announced a partnership to enhance data center connectivity and optimize cloud technology delivery across the U.S. Lumen plans to utilize AWS technologies like AI, ML, and security to modernize its systems, while providing fiber connectivity to AWS data centers. This will empower enterprise customers to build scalable AI applications across AWS Regions and Local Zones.
Conclusion
The evolution of the telecom cloud is a direct response to the increasing demands for faster, more efficient, and scalable services. As the industry continues to adopt cloud technologies, the opportunities for growth and innovation are boundless. The future of telecom cloud will be shaped by the continued integration of 5G, IoT, AI, and edge computing, all of which will contribute to the creation of a more connected, agile, and service-driven telecom ecosystem.
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