At the recent Connected Britain 2025 event, telecommunications experts gathered to discuss AI and data centers. Among them, EY‘s Rob Atkinson explored the challenges and opportunities in the telecom sector. The industry’s transformation from “telco to techco” has been a frequent topic, but a complete business model overhaul remains elusive.
Rob Atkinson, a Partner at EY, indicated that many telecom companies today are hesitant to fully revamp their operations. Instead, they focus on tightening operations and making strategic choices between service and network-centric approaches. “The telcos are being more deliberate in the choices they are making – in some cases, between servco and netco,” noted Atkinson. The aim is to optimize assets without overextending their reach.
AI, particularly agentic AI, is a significant factor in this transformation narrative. However, many AI initiatives face hurdles. A recent study reveals that an astonishing 95% of AI pilots have failed, largely due to outdated IT systems stalling progress. “There’s no shortage of engagement – everyone knows there’s opportunity,” Atkinson remarked, highlighting organizations’ difficulty in fully embracing new technologies.
The conversation around data centers further raised critical points. Despite substantial investment announcements, numerous obstacles remain, from planning permissions to sustainable energy access. Large-scale projects require innovative cooling systems and energy reuse solutions, or they may not proceed beyond announcements. “It’ll be interesting to see, of all the hyperscale projects we’ve seen, which actually get shovels in the ground,” Atkinson said, stressing the importance of these elements in continuing development.
Innovations in data centers are imperative as they consume significant energy, underscoring the need for environmentally friendly operations. If the industry fails to solve energy and carbon-related challenges, many data center projects may falter. This highlights the ongoing balancing act between technological advancement and environmental responsibility.
This dialogue at Connected Britain showcased the telecom sector’s crossroads, underscored by the pivotal roles of AI and data centers in shaping its future. With organizations navigating between visionary goals and practical implementations, the road ahead demands daring moves and strategic focus.
