European telcos are more and more lively within the provision of AI, cloud and information sovereignty options, however the income they generate from such companies remains to be a drop within the ocean in comparison with that of hyperscalers.
Throughout a webinar hosted by STL Companions, titled “Sovereignty: The place can telcos play and win?”, Marina Koytcheva, analysis director at STL Companions, mentioned early indicators of telco income technology from AI information facilities are rising, however the numbers embody sovereign and non-sovereign options and are nonetheless comparatively low.
As an example, Koytcheva mentioned SK Telecom, which frames itself as a worldwide AI firm, reported $366 million in income from AI information facilities in 2025, and $87 million within the first quarter of 2026 (Q1 2026). Singtel reported $245 million in income from information facilities in its monetary yr to March 31, 2025, and $127 million within the first half of FY26. Indosat Ooredoo Hutchison, in the meantime, reported $28 million in income from its AI Neocloud enterprise in 2025.
In distinction, Amazon Net Providers (AWS), Google Cloud and Microsoft Clever Cloud booked a mixed $92 billion in income in Q1 2026, Koytcheva mentioned.
Nonetheless, whereas telcos are “very, very small in comparison with these hyperscalers,” they need to definitely not be discouraged from focusing on this space, she mentioned.
“Telcos even have each proper to play in the case of providing digital sovereign options, as a result of they’re nationwide champions, they’re extremely regulated digital gamers, they already supply vital infrastructure, nationwide infrastructure, they command belief, so after all they’ll supply sovereign options,” Koytcheva remarked.
European telcos have been busy, with extra to return
Quite a lot of options have already been introduced by European telcos, for instance, and “we anticipate to see much more sovereign play from telcos within the subsequent months, quarters, and years, as a result of the world isn’t coming collectively,” Koytcheva mentioned.
Christof Stallmach, senior supervisor, know-how & gross sales at Crimson Hat, additionally famous that telcos have offered sovereign cloud options for many years as part of their vital nationwide infrastructure. The problem, he mentioned, is to show this right into a B2B alternative by focusing on extra localized, close-to-market alternatives that the tech giants are unable to deal with.
Right here, he cited a venture launched in Hamburg Harbour earlier this yr to put in automated cranes in its services. A key requirement was for low latency options to hyperlink cameras and sensors. “A hyperscaler could not ship the answer,” he mentioned, “so telcos may need a stake on this sport.”
Definitely, calls for for AI, cloud and information sovereignty at the moment are informing telco methods across the globe, as illustrated by bulletins from Deutsche Telekom, Orange, Vodafone – and extra in addition to. (See Orange Enterprise acknowledges limits of Europe’s tech sovereignty; Microsoft reveals who actually controls Europe’s ‘sovereign clouds’; Eurobites: Go-it-alone digital sovereignty is not the reply, says Vodafone research; Deutsche Telekom ramps up sovereignty agenda as T Cloud goes stay.)
A sew in time
Additionally taking part within the webinar was Andy Linham, principal technique supervisor at Vodafone Enterprise. Requested how telcos can earn a living from sovereign AI, he mentioned he sees the telco position as “stitching issues collectively, being that dealer of companies” and creating hybrid fashions relying on enterprise want and the capabilities which can be accessible.
“We’ve got entry to huge connectivity platforms [and] plenty of cloud [and] safety companies. We’ve got the individuals that may sew all of it collectively from skilled companies perspective. I do not suppose we’ll exit and construct the most recent best massive language mannequin, however I feel we do have a robust position to play in the case of offering a joined up strategy to most of these companies that not many different firms may recreate,” Linham mentioned.
Examples of Vodafone’s sovereign performs embody a partnership with AWS European Sovereign Cloud, the launch of FASTCloud in Italy by Fastweb + Vodafone, and Vodafone storm within the UK. (See Eurobites: Vodafone entrusts ‘sovereign’ cloud to AWS).
Linham additionally sees regulation and requirements as telco “superpowers” due to their lengthy expertise in each fields and their capability to navigate complicated regulatory regimes. (See Fragmented regulation complicates telco sovereignty agenda – Omdia.)
Total, the message from the panelists is that sovereignty isn’t a single product however a set of technical and architectural choices that stay viable as soon as regulatory and sovereignty constraints are utilized. The view is that telcos can use their regulatory know‑how and nationwide infrastructure footprint to orchestrate hybrid, requirements‑primarily based and open‑supply‑enabled options which can be regionally compliant however globally succesful.
