The telecom industry’s cloud transformation is accelerating—and fast. According to Omdia’s new Telco Network Cloud Market Tracker – 2025 Annual Forecast Report, global spending on telco network cloud infrastructure and software will climb from $17.4 billion in 2025 to $24.8 billion by 2030, a 7.3% compound annual growth rate (CAGR).
The report points to a major inflection point in 2025, with telco cloud spending projected to grow 12% year-over-year—twice the pace of 2024. The drivers? A potent mix of AI integration, cloud-native tooling, and automation frameworks that are finally mature enough for production-scale telecom operations.
“Telcos are rapidly modernizing their infrastructure to support cloud-native network functions and AI-driven automation,” said Inderpreet Kaur, Senior Analyst at Omdia. “The migration to containerized network functions (CNFs) is encouraging telcos to focus their investments on platforms that support both virtualized and containerized network functions.”
The New Cloud-First Telco
Telcos have long wrestled with legacy systems that limit flexibility and automation. Now, the shift toward cloud-native architectures—built around Kubernetes and containerized workloads—is turning networks into programmable, data-driven systems. Spending on Kubernetes-based platforms is forecast to surge at a 25% CAGR, while investments in VM-only environments slow down, signaling the sunset of traditional virtualized stacks.
AI Becomes the New Backbone
AI is emerging as a key decision driver: 62% of operators now consider AI and machine learning support critical when selecting cloud infrastructure. Industry leaders like NVIDIA, Red Hat, and VMware are already tailoring on-prem AI capabilities for telco-specific needs such as network optimization, predictive maintenance, and traffic orchestration.
Public Cloud Gains Traction
While telcos were once wary of public cloud, attitudes are shifting. Omdia forecasts public cloud usage for network workloads to grow from 3% in 2024 to 13% by 2030, as hyperscalers like AWS, Azure, and Google Cloud roll out telco-specific solutions that address regulatory, security, and latency concerns.
Vendor Leadership and Market Dynamics
Red Hat continues to lead the telco cloud infrastructure management market with a commanding 25% share, positioning itself as the top vendor in the space. Others, including VMware, Wind River, and Nokia, are sharpening their strategies around hybrid cloud orchestration and automation-driven lifecycle management.
The Road Ahead: From Virtualization to Continuous Automation
Omdia’s report underscores a clear mandate: cloud-native transformation and automation are now inseparable. Vendors and operators alike must embrace CI/CD pipelines, GitOps practices, and automated lifecycle management to keep pace with the demands of 5G, edge computing, and AI-powered network optimization.
In short, the telco cloud market isn’t just scaling—it’s evolving. As AI becomes embedded in the network fabric and public cloud adoption grows, the telecom industry’s digital backbone is being rebuilt in real time. The next few years will determine which players can truly turn this cloud-first ambition into operational advantage.
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