Telecom operators are increasingly turning to artificial intelligence (AI) and cloud technologies to offer more services beyond traditional telecommunications, according to Amazon Web Services (AWS).
“I believe the telecom industry underpins innovation across all sectors and serves as the connective tissue that makes this possible,” Jayanth Nagarajan, head of Telecommunications Industry, Asia Pacific & Japan at Amazon Web Services (AWS), said in an interview with Back End News at re:Invent 2025 held in Las Vegas.
He noted that telecom companies are well positioned to move into their next phase of growth.
“Telecom companies provide a highly valuable service that enables innovation, and we see an opportunity for them to do more,” Nagarajan said.
The cloud company is also helping telcos focus on data and AI. While AI and machine learning (ML) have been around for decades, recent improvements in algorithms, access to large data volumes, and powerful cloud computing have created new possibilities.
“Cloud providers like us are helping companies such as Globe and PLDT optimize data strategies and set up AI Centers of Excellence, driving the next phase of growth,” Nagarajan said.
Telecom networks remain the largest area of spending for operators as they invest in future technologies like 6G while looking for efficiency. New ways people use networks are also changing how they need to operate. The company says cloud technology aligns well with next-generation networks such as 5G, which are built on a service-based architecture that complements the cloud.
“AWS is helping telecoms and their equipment and software partners upgrade and prepare these networks for the future,” Nagarajan said.
Telcos are also shifting toward operating more like tech companies, a trend that has been happening for some time. AI is accelerating this change, providing new opportunities to grow and use technology.
“So, if you look at the number of operators now setting up digital-native businesses, like Globe with GCash, Maya with PLDT, or mobile operators creating sub-brands, this is a trend we are seeing,” Nagarajan said.
The company said that telcos are using this transformation to also change their organizational culture. This is especially important with AI, as companies work on developing their people alongside the technology to fully realize its potential.
Telcos that successfully transition to tech companies share common traits. Transformation starts at the top, with boards and leadership teams showing a clear vision and commitment to move beyond traditional connectivity services. Successful operators also invest strategically in technology and innovation.
Nagarajan cited SK Telecom in South Korea, which publicly committed to becoming an AI-first company. The company has invested in partnerships with AI providers like Anthropic, joint ventures with other telcos to create industry-specific AI models, and collaborations with the cloud company to build an AI Factory.
Adaptability is another factor for companies to successfully transform. Leading telcos design business models that encourage experimentation while limiting risk. By reducing the cost of innovation, teams can test ideas without major losses and quickly scale initiatives that succeed.
Nagarajan said telcos that transition successfully combine leadership vision, strategic technology investment, and agile, innovation-friendly business models that allow them to experiment, fail fast, and scale fast.