Christina Patsioura, Lead Analyst, IoT and Enterprise, at GSMA Intelligence, has revealed key trends in IoT and enterprises for 2025.
Generative AI (genAI) Adoption in Enterprises
Surge in Enterprise GenAI Deployments: Major software vendors such as Microsoft (Copilot AI agents), Zoom (AI Companion), and SAP (Joule) are driving adoption.
Current Utilization and Potential: While 86 percent of enterprises involved in digital transformation use genAI, only 33 percent make advanced use of it. Enterprises aim to validate early use cases, experiment with new applications, and expand usage in 2025.
Implications for Infrastructure: GenAI adoption is expected to influence data traffic and security needs, prompting further network and digital infrastructure upgrades.
Shift in Cloud vs. On-Premises Deployments
Rethinking Deployment Strategies: The demand for AI-driven applications, such as genAI, has led to a reevaluation of cloud and on-premises solutions.
Emergence of On-Premises Solutions: In response to security concerns and the inflexibility of cloud contracts, enterprises are gravitating toward tailored, secure on-premises solutions, a trend expected to solidify in 2025.
Private Networks and 5G Evolution
Challenges in Monetizing Private Networks: Private 5G networks expanded in 2024 but face hurdles such as lengthy sales cycles and compressed profit margins. With nearly 40 percent of operators citing monetization as a challenge, some vendors may exit the market in 2025.
Mission-Critical 5G: Government agencies and large-scale infrastructure companies are emerging as key buyers for 5G mission-critical networks. Examples include collaborations like the US Department of Defense with Nokia and Verizon. Broader adoption of 3GPP-certified broadband mission-critical services is expected globally.
5G IoT Developments
Launch of 5G RedCap in the US: T-Mobile and AT&T will activate 5G RedCap in late 2024 and early 2025, respectively, setting the stage for its performance, use cases, and pricing to influence global adoption.
Cellular IoT Transition: IoT players are focused on migrating from legacy 2G/3G networks to newer technologies like LTE Cat 1, LTE Cat 1bis, NB-IoT, and LTE-M as older networks shut down.
Broader Impact on Enterprises
Public Sector Adoption: Agencies like FirstNet in the US and Virve 2 in Finland are adopting 5G-based solutions, signaling potential shifts from legacy networks like TETRA.
Vendor Landscape Consolidation: The competitive private network space may see clearer winners and losers in 2025 as vendors differentiate based on their ability to scale and monetize solutions effectively.
Implications from IoT and Enterprise Trends in 2025
The increasing investment in digital transformation by enterprises, averaging 10 percent of enterprise revenue from 2024–2030, signals a significant opportunity for IoT and AI solution providers.
Among technologies beyond connectivity, AI will dominate spending, capturing 14 percent of the budget. However, enterprises prioritize security, privacy, and confidentiality, highlighting the need for solutions that enhance operational resilience. Mobile operators can capitalize on this demand through secure private networks and robust data exchange capabilities. For instance, offerings like Orange Business Services’ GPU-as-a-service demonstrate how operators can support AI adoption while maintaining security and control.
The mission-critical 5G market presents a lucrative opportunity for mobile operators, driven by the need for secure, reliable communication in regulated environments. Public sector projects, such as FirstNet’s $8 billion upgrade in the US, exemplify the scale of investment. Operators in Europe should also focus on public safety and defense, as geopolitical uncertainties increase demand for secure communications. Additionally, sectors like railways, transitioning to 5G FRMCS as a replacement for GSM-R, provide further avenues for monetization.
For network vendors, the private network space offers potential but requires a long-term strategy. Despite only 2 percent of enterprises globally adopting private networks, early adopters report a high success rate (87 percent achieving expected benefits). Vendors must align with investors and management to ensure realistic timelines and sustained investment to scale effectively. The market remains largely untapped, and vendors positioned to address enterprise-specific needs can secure significant growth.
AI implementation challenges, including cost (31 percent), integration complexity (29 percent), and security risks (29 percent), will drive enterprises to seek optimized deployment strategies between cloud and on-premises solutions. Partnerships with operators and vendors will be crucial to secure data connections and facilitate reliable exchanges across sites. Notably, 38 percent of enterprises collaborating with operators rely on them for integrating networks and securing AI applications. This underlines the role of the broader networking ecosystem in enabling AI-driven digital transformation.
Rajani Baburajan
