As demand grows, hyperscalers have taken the lead in shaping the industry, but to stay relevant, network operators must embrace major change, especially to take full advantage of AI and automation. Success will require a clear understanding of customer needs, spotting new opportunities early and working closely with tech partners.
In the keynote panel at ITW 2025, which brought together leading voices from the telecoms, cloud and interconnection platforms, panellists highlighted how much the industry has changed, and more importantly where it must go.
Speakers
- Nadine Hawkins, editor – Capacity (chairperson)
- Sarah Mills, global head of wholesale – Telstra
- Ivo Ivanov, CEO – DE-CIX
- Veer Passi, Group CEO – Kalaam Telecom
- Pankaj Sachdeva, senior partner – TMT – McKinsey
A decade of acceleration
Reflecting on a decade of telecoms, Kalam Telecom group CEO Veer Passi, said: “The first half was largely defined by the rise of cloud operators,” highlighting the influence of hyperscalers like Amazon and Microsoft.
But, the real tipping point, he argues, was what he called the “bank era”, a time when “consumer behaviour driven by OTTs, e-commerce, cloud security and everything digital” pushed telcos to rethink their role.
Historically sitting at the bottom of the value chain, telcos were relegated to infrastructure providers. But that’s changing.
He stated: “To move up the value chain, we need to adopt new models – like Network-as-a-Service (NaaS), software-defined networking, and APIs. These are still fairly new to most telecom operators, and we are evolving.”
However, CEO of DE-CIX, Ivo Ivanov noted how the transformation has manifested across geography and service diversity.
“Geographically, interconnection has become more distributed,” he explained.
“New hubs are now being developed to support telecom services and local interconnection.” And it’s not just about where infrastructure is located. It’s who’s participating.
“Just 7- 8 years ago, companies like Netflix and Apple didn’t have their own presence at Internet Exchanges. Today, they have over 250 direct connections to exchanges and data centres around the world. They’ve transformed from being purely enterprises to global network operators.”
That diversification is spreading across industries: from banks and healthcare to automotive and logistics, all are becoming network architects in their own right.
Sarah Mills, head of global wholesale at Telstra International, agreed that demand has reshaped expectations.
“The most significant [inflection point] has been the exponential growth in data demand,” she said. “The shift to automated, self-managed, and highly autonomous networking has been a critical turning point.”
She emphasised that connectivity is no longer just about bandwidth, but about personalization, compliance, and sustainability. “That’s how we stay relevant and deliver value,” she said.
Meanwhile, Pankaj Sashteva, senior partner at McKinsey, outlined three seismic shifts.
“Cloud adoption, network virtualisation, and fibre densification.” He pointed out that “cloud adoption went from below 20% to over 50% of workloads” in just a decade, with enterprises increasingly adopting multi-cloud strategies.
That, in turn, is boosting demand for cross-connects and cloud-neutral interconnection, he claimed.
The end of the traditional telco
Looking forward, panelists were asked whether the traditional telco model is reaching its end , and what new business models could take its place.
Ivanov stated: “Oh, definitely”, citing virtualisation, AI-as-a-Service and hybrid strategies as driving forces.
“Traditional telcos have evolved significantly. Some have become carrier-neutral data centre operators, which was unthinkable 10 or 15 years ago,” he stated.
Ivanov also pointed to the rise of hyperscalers investing in their own subsea cables and data centres. “That’s a huge shift,” he noted.
As an example, he shared a striking statistic about localisation in the Middle East: “In 2012, 90% of prefixes used in the region were served from outside. By 2022, only 3% were served from outside. Latency dropped from 250ms to 3ms, and IP transit prices fell from $80 to under $1.”
Pasi reinforced that shift. He stated: “Just six years ago, Microsoft opened a region in Dubai. Today, there are around 15 cloud and SaaS providers with multiple regions in 8–10 countries across the Middle East.”
These players, he noted, are increasingly “going more inward and organic, with fewer dependencies on telecom infrastructure,” he noted.
What will define leadership in 2030?
With all panelists in agreement that the sector is in the midst of profound transformation, the question becomes: what will define success in the years ahead?
Mills believes leadership will come from those who build adaptable, tailored networks with regulatory and sustainability considerations at the forefront.
Meanwhile, Sashteva added that “the networked, interconnected world will look significantly different five to seven years from now compared to today.” The winners will be those who keep up with – and help shape – that evolution.
Additionally for Ivanov, it’s about continuing to build a diverse and inclusive interconnection ecosystem: “It’s always been about community,” he said.
Pasi concluded: “In this digital world, customers now expect the same level of experience they get from Apple, Amazon, Uber. Simplicity and seamlessness are the benchmark. And if telecom operators don’t meet those expectations, we fall behind.”
