Despite Cisco's projections of a 6.6-fold increase in network traffic by 2035 due to AI, analysts from Analysys Mason and Omdia assert that existing telecom networks in developed markets have significant excess capacity. Major telcos like BT and Verizon are reducing capital expenditure, indicating that infrastructure is maturing and they do not anticipate unmanageable congestion from future traffic demands, including those from AI.
The assertion of excess network capacity directly challenges vendor narratives pushing for infrastructure upgrades driven by AI traffic. This suggests that operators, particularly in developed markets, are confident in their existing networks to handle growth without significant new investment, impacting vendor sales. For streaming providers, this implies network degradation due to AI traffic is less of an immediate concern than some forecasts suggest. Watch for telco capital expenditure reports in the coming quarters to see if current spending trends continue, especially as more AI services launch.
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