Communications Service Providers Utilize Wavelength Services to Monetize AI Traffic

What's Happening?

Communications service providers (CSPs) are preparing for a significant increase in network connectivity demand driven by artificial intelligence (AI) over the next three years. According to a report by Heavy Reading, CSPs expect high bandwidth wavelength services to become the dominant transport service for AI connectivity. The report surveyed 77 global service providers, with half representing North America. Findings indicate that 18% of service providers anticipate AI will contribute to over half of their metro network traffic, while nearly half expect AI to account for more than 30% of metro traffic. Expectations are higher for long-haul traffic, with 29% predicting AI will contribute more than half of long-haul traffic, and 52% expecting AI to account for 30% of long-haul traffic. CSPs aim to leverage AI traffic to compete with hyperscalers, benefiting when traffic transitions from hyperscaler networks to their own.

Why It's Important?

The anticipated increase in AI-driven network traffic presents both challenges and opportunities for CSPs. As AI applications proliferate, CSPs must enhance their infrastructure to manage the influx of data, particularly in long-haul networks. This shift could enable CSPs to capture more market share from hyperscalers, who currently dominate data transport. By investing in wavelength services, CSPs can offer tailored solutions for AI traffic, potentially increasing revenue streams. The ability to efficiently handle AI traffic will be crucial for CSPs to remain competitive and capitalize on the growing demand for AI connectivity.

What's Next?

CSPs are likely to continue investing in infrastructure upgrades to accommodate the expected rise in AI traffic. This may involve expanding wavelength services and exploring new business models to monetize AI connectivity. As AI applications evolve, CSPs will need to adapt their strategies to meet changing demands and maintain a competitive edge. Collaboration with technology providers and ongoing research into AI traffic management will be essential for CSPs to optimize their networks and capitalize on emerging opportunities.