Providers’ Strategies for Cloud Services Revealed in Extensive New RAD Survey

Telecom operators are undergoing one of the most profound shifts in their history. The traditional telco model, providing connectivity through voice and data services, is being reimagined to meet the demands of enterprise digitalization and AI-based innovation. While the end goal, namely greater agility, profitability, and relevance, is clear, the paths telcos are taking to get there are anything but uniform.

Some telcos opt to become NetCos, placing their focus on infrastructure. Others are focusing on service bundling as a means to become ServiceCos. And some are evolving into fully fledged TechCos: Agile, software-centric players inspired by hyperscalers and startups alike.

To understand how this transformation is playing out in practice, we at RAD conducted a wide-ranging global survey of 250 senior telecom professionals across North America, Europe, and Asia-Pacific, in collaboration with the research firm Global Surveyz. The results, captured in the newly released 2025 Telco Cloud Services Survey Report, highlight the motivations, strategies, and investments shaping this shift.

At its core, the research demonstrates a fundamental truth: Communications service providers (CSPs) see the telco cloud that is positioned at the edge of their networks as their launchpad into the future.

From Connectivity to a Full-Service Cloud Model

Providers are no longer content to compete solely on connectivity. As this survey shows, CSPs are building their own telco clouds at the network edge to enable new business models and unlock monetization opportunities.

These efforts are not theoretical. Our 2025 report reveals that CSPs are actively transforming their infrastructure to support hosting services, managed data services, and enterprise-grade applications. Among the stated objectives:

• Techcos: Hosting business customer workloads (25%) and third-party applications (22%), extending cloud compute power closer to where enterprises actually consume services.
• ServiceCOs: Delivering telco-owned data services (29%), frequently enhanced by AI and IoT integration.
• NetCos: Supporting virtualized and cloud-native network functions (24%), enabling agility and automation.

The survey makes clear that edge-based telco cloud infrastructure is no longer an experiment but rapidly becoming a necessity.

IoT as the Leading Growth Driver

One of the standout insights from the survey is the leading role of IoT data services in CSP roadmaps.

54 percent of providers plan to bundle IoT data services with connectivity, making it the most common managed service strategy. This move reflects providers’ urgency to escape the trap of commoditized connectivity by layering intelligence and business insights on top of their networks.

CSPs (ServiceCos) envision themselves as critical partners for enterprises seeking real-time, AI-driven operational intelligence through IoT. Beyond connectivity, they are looking to provide managed platforms that collect, analyze, and act upon IoT data.

Additional IoT-focused strategies include:

• 47% are planning to dedicate network slices for IoT traffic, ensuring differentiation and reliability.
• 44% are embedding Secure Access Service Edge (SASE) capabilities into SIM cards, strengthening IoT security.
• 44% are enabling single-CPE solutions that consolidate enterprise and IoT services seamlessly.

We believe this layered IoT approach is crucial for CSPs to demonstrate tangible value to enterprises. This value lies in the ability to help them streamline operations, unlock cost efficiencies, and create new digital experiences.

The Rise of AI-as-a-Service

If IoT is the biggest managed service play, AI is the most disruptive enabler.

Our survey reveals that 58 percent of providers plan to offer AI-as-a-Service (AIaaS). This will allow CSPs to expose network intelligence-based APIs and monetize their AI-driven insights.

In fact, 64 percent of respondents see APIs for third-party developers as central to their strategy. This signals a deliberate shift: providers want to move beyond raw connectivity and instead aggregate, process, and expose network intelligence as a platform for innovation.

It is clear that communication service providers intend to take an active role in enabling AI for third-party applications. Their approaches reflect a broader trend of CSPs maintaining an infrastructure-first mindset and providing a foundation for others to build applications on their platforms.

Just as cloud hyperscalers democratized access to compute and storage, CSPs aim to democratize AI-ready, network-driven intelligence.

AI at the Edge: Inside the Next-Generation CPE

The survey also underscores the value of AI inference models embedded within next-generation CPEs. This represents a powerful extension of edge intelligence, moving from centralized AI compute to distributed, real-time AI embedded at the very edge of the enterprise network.

The key benefits identified by CSPs include:

• Application detection and differentiation (39%), enhancing the ability to deliver quality-of-service-driven offerings.
• Power consumption optimization (33%), responding to growing sustainability mandates.
• Cybersecurity enhancement (28%), leveraging AI pattern recognition to detect anomalies and threats in real time.

By embedding AI models into CPE hardware, CSPs gain the ability to deliver autonomous, closed-loop operations, including optimizing traffic, managing resources dynamically, and securing networks without human intervention.

Business Customer Motivations: Location, Bundles, and Services

From the customer lens, CSPs believe the location of the telco cloud at the edge is the single biggest driver of enterprise demand.

• 55 percent of providers say enterprises prefer the telco cloud due to its network-edge positioning, enabling managed, private access to cloud services with guaranteed data sovereignty and performance.
• 26 percent cite bundled packages of network, security, and cloud services as compelling to enterprises.
• 19 percent pointed to the attraction of managed services, particularly IoT-led solutions.

Enterprises increasingly need to scale their resources and augment their private data center with out-of-campus cloud resources. The Telco cloud allows them to expand while maintaining performant secure access to their workloads and data.

Security as a Cornerstone

Security is becoming a first-class citizen in telco cloud access. Providers no longer treat it as an add-on but as a network-native functionality.

The survey identifies Secure Service Edge (SSE) (26%), zero-trust access (21%), and device visibility (19%) as foundational elements. Importantly, 34 percent indicated that a mix of these services will be embedded within telco cloud offerings.

Looking ahead, CSPs also expect to pioneer quantum-safe networking, introducing next-generation encryption and crypto-resiliency, facing the threats introduced with the projected availability of Quantum computing.

Deterministic Networking and Application Differentiation

The rise of real-time digital applications and Business AI lifecycle demands deterministic networking. The latter will also be needed for industrial applications such as industrial automation and remote-controlled robotics, CSPs are responding by extending L2/L3 VPNs into bounded-latency, ultra-reliable services at the edge.

Nearly a quarter (21%) of surveyed providers are planning upgrades toward deterministic networking. Meanwhile, 39 percent are pursuing advanced application differentiation strategies, including network slicing (15%) and ultra-reliability guarantees (14%).

With deterministic networking, CSPs offer new classes of service that require control of the underlay network.

The ability to support deterministic networking and application differentiation is expected to become critical for TechCos hosting business workloads and data. What’s more, such capabilities could potentially assist such CSPs in becoming edge neoclouds.

Conclusion: CSPs Taking Their Place as Techcos

The 2025 Telco Cloud Services Survey Report underscores the magnitude of this industry inflection. CSPs globally are pursuing cloud-at-the-edge as their pathway to transformation, expanding from raw connectivity into value-add services.

To support these ambitions, each of the new telco archetypes (NetCo, ServiceCo and TechCo) involves specific priorities and uses of the telco cloud, for IoT data services, AI platforms, or secure, differentiated enterprise networking.

Read the full 2025 Telco Cloud Services Survey Report.