Telecommunications industry outlook

The biggest trend in the telecommunications industry—and the business market as a whole—is artificial intelligence. Even though the hype surrounding AI has been steadily building since ChatGPT was released in late 2022, we are currently in the early stages of the AI computing cycle. If similar patterns from past computing cycles hold true, the first wave of monetization generally involves semiconductors; the second, infrastructure; and finally, software and services associated with the new computing tool.

The largest growth from AI so far has been from the companies that manufacture semiconductors and the AI companies developing the large language models. The next wave should see increased growth in infrastructure, mainly through data centers needed to handle the increase in computing power. The ultimate business model will be the software and services that use the AI models to perform specific tasks that drive efficiency, increase automation and increase production.

Regulation tends to be more reactive than proactive. With connectivity to almost everything increasing, the telecommunications industry is ripe for more regulation. Over the last year, new compliance standards have largely focused on three broad categories: cybersecurity, reliable connectivity and consumer transparency. Companies need to be nimble to comply with the shifting regulatory landscape and avoid potential penalties—and they need to stay informed on multiple fronts, as significant regulation can come from local, state, federal or even international bodies.

Since 2000, over 9,600 satellites have launched into orbit, with LEOs accounting for over 88%. Their popularity stems from lower costs and better coverage, but concerns about space junk and regulatory oversight are growing.

Companies navigating this space must balance innovation with regulatory compliance and environmental responsibility to capitalize on the potential of LEO constellations while mitigating risks.