Telcos are no longer defined solely by networks and connectivity. As AI moves closer to customers through inference, operators are evolving into digital platforms that deliver intelligence, automation and security. By combining unified data, AI agents and edge capabilities, telcos can launch new services that feel more personal for consumers and more strategic for enterprises, from advanced cybersecurity to real-time decision support.
However, scaling AI remains a challenge. Fragmented data, legacy infrastructure, governance concerns and talent gaps often prevent proof-of-concept projects from becoming profitable services. A governance-first approach is critical, ensuring AI workloads are secure, auditable and predictable from day one. With unified data platforms, responsible AI guardrails and repeatable architectural patterns, telcos can safely deploy AI at scale. The result is a clear path from experimentation to monetization, allowing operators to reposition themselves from connectivity providers to AI-powered digital platforms.
Mitch Wagner:
What are some of the practical examples of AI-powered services or innovations that telcos can deliver both for businesses and for consumers?
Rick Lievano:
Telcos today, they're just not stringing cables and deploying the next G anymore, right? They're rapidly embracing AI to deliver services that are both practical, but maybe more importantly, revenue-generating. Think of it as moving from pipes and connectivity, which is a traditional telco, to platforms and intelligence.
At Microsoft, we have a product called Foundry. You may know it as our unified AI platform. It includes things like the Azure OpenAI service, which I'm sure everybody's heard about at length, Microsoft Fabric, which is our data platform, Copilot, of course, which provides that automation. If you take all these things together, operators can really now roll out an entirely new class of AI-powered offerings.
We're talking about advanced security services. I'll have a great example for you on that. Carrier-grade AI agents that can juggle voice, messaging, network intelligence. Emerging AI marketplaces, that's a big one, a lot of hype around marketplaces. Of course, edge-hosted industry solutions that run workloads closer to the customer. In other words, Telcos are just no longer just connecting people. They're really becoming AI-led digital platforms.
I think of the value as being very real. We've got innovations like programmable connectivity APIs, like those that are championed by Project Camara, Linux Camara, enterprise AI factories. We've got next-best-action experiences that help businesses make smarter decisions in real time. For consumers, that means services that feel more personal, more secure, and frankly, just more useful.
The example I was talking about was Lumen. At our Microsoft Ignite event in November, they announced the Lumen Defender Advanced Managed Detection service. This is really a fully-managed cloud-native security solution that combines the best of Lumen, their global network intelligence, coupled with Microsoft Sentinel, our SIEM product, targeted at our enterprises, so we'll go co-sell this thing together. It helps proactively detect and stop sophisticated cyber threats. It's like having a digital guard dog that never sleeps. Maybe this one doesn't bark at the mailman, but super critical and that's a great innovation. It's a fine example of a new AI-enabled product that we've launched together with Lumen.
Mitch Wagner:
Okay, great. What are some of the biggest challenges that telcos face in becoming leaders in AI? How can they overcome those challenges?
Rick Lievano:
We've all heard about these challenges, right? The fragmented data states, the legacy infrastructure that really feels like it belongs in a museum. We've got weak governance. I can tell you, governance alone has probably elevated from maybe being a top three, four issue to being a top issue across most of the C levels with regards to their ability to scale AI. We have talent gaps. Of course, the ever-tricky task of scaling AI into services that actually make money, which is another critical thing.
From Microsoft's perspective, though, the way forward and how we're helping telcos is really about turning those potholes into stepping stones, because first we've got to help them unify their network and business data with products like Microsoft Fabric, for example, so you're not stuck with silos. You've got to apply responsible AI guardrails. Absolutely critical that when you start this journey, responsible AI has got to be a top priority. It's got to be there from the beginning. Those guardrails help you through standardized pipelines. Nobody wants the wild west of AI running loose across your critical network, for example.
Add to that repeatable architectural patterns. We just announced, again, at Microsoft Ignite, a pattern, we call it the network operations AGM framework, which really provides those network AI blueprints, right, so you can deploy safely. You've really got a playbook instead of just a guessing game. You got guidance that helps you be successful in your AI deployment.
Now, I mentioned governance being so critical. We released at Microsoft Ignite a really interesting component here. I'll talk about it briefly, but it's called Microsoft Agent 365. Agent 365 is really like that air traffic controller for AI workloads. It provides governed enterprise-grade framework for building, for deploying, for supervising agentic workflows across telco domains. It really provides or enforces a centralized policy for auditing, for role-based access, deterministic agent behavior, costs, agent analytics, so you know how agents are behaving, which ones are successful.
If you put it all together, we've got capabilities like Fabric, Foundry, Copilot, Agent 365, and then our operators really get a governance-first path to being able to transform AI proof of concepts into secure, reliable, revenue-generating services. In short, telcos can really move beyond, as I said earlier, just being connectivity providers, and really reposition themselves as AI-powered digital platforms. They can do this. If they do it right, they go from being pipes and towers, connectivity, to platforms and intelligence, without all those potholes.
Mitch Wagner:
All right. Let's leave it there. Thank you, Rick.
Rick Lievano:
Thank you so much, Mitch.