Channel partners and telcos are fielding demands for higher bandwidth connections to power proliferating cloud- and AI-based applications in the enterprise.
Telco carriers have preached over the last two years that AI could lead to a renaissance in margins as enterprises demand faster, lower-latency connectivity. Data from research firm Omdia and anecdotes from partners lend credence to those claims. Gigabits per second is growing for the average business retail circuit, in some cases pushing toward 100 Gbit/s — a rate usually reserved for data center connections.
An Omdia survey of 419 large enterprises found that 18% have more than ten 100 Gbit/s ports across their offices and data center exchanges, and the ratio will move to 35% in one year’s time.
Avant Communications just processed a customer’s order for four 400 Gbit/s connections into a data center site.
“That is just the start, as they have another 12-plus locations to do that around the world,” Chip Hoisington, Avant VP of engineering connectivity, colo and wireless, said in an email. “In fact, their ask was for 1.6 Tbit/s connections for each site, but that does not even exist yet.”
Hoisington said 800 Gbit/s will soon become widely available as optical technology providers Ciena and Nokia-owned Infinera complete trials of their new equipment.
“I know they are testing those electronics now, and we are likely to have 1.2 or 1.6 Tbit/s per connection available in the next 24 months,” Hoisington said. “It is interesting that we can stack multiple 400 gig connections just like we did in the old days with Double T1s and Double T3s.”
Retail bandwidth growth
The bandwidth frenzy is not confined to the data center.
Service providers have been providing 100 Gbit/s since the 2010s, and hyperscalers have been buying it since 2019, but 100 Gbit/s is hitting the mainstream in B2B retail, Brian Washburn, Omdia Chief Analyst of B2B telco solutions, wrote in the report.
“The technology is reaching large enterprises to upgrade Ethernet ports in the data center, and occasionally, network access. Large enterprises may not be close to filling 100 Gbit/s of traffic yet. But many see rapid growth in data center and cloud connect traffic,” Washburn said.
Trust Technology Consultants recently sold a 5 Gbit/s circuit to one of its clients in Northwest Louisiana.
“For our region, that's bonkers. That's the most anybody's ever bought,” Co-owner Mack Slaughter told Channel Dive.
Bandwidth is also up in terms of quantity. Slaughter said he’s seeing more tertiary circuits — often through satellite or fixed wireless providers — tacked onto the primary and secondary fiber circuits and managed through software-defined wide area networking. Slaughter said businesses can’t afford any downtime in their applications.
ACS Cloud Partners President Eric Asquino sees AI as the chief driver of increased bandwidth requirements. Businesses are adding cloud-heavy, AI-heavy applications at their offices.
“At this point, there's pretty much nothing left on-prem, so they're connecting to everything. Their apps are getting more sophisticated, and they're using more of them,” Asquino said. “If they're doing any kind of AI in their own environment, then that's going to eat up some bandwidth as well.”
End of the race to zero?
Elevated bandwidth requirements are just one part of an AI-fueled telco renaissance. The quiet hope of carriers and the partners that sell them is that prices will increase, or at least snap out of their death spiral.
“It's been a long, long, long time since we've seen an increase,” Asquino said.
On the contrary, prices have consistently plummeted over the years.
“The prices are just rock bottom from those guys, and it's a real danger to a lot of people,” Slaughter said.
None of the partners Channel Dive spoke to said they’ve seen an uptick, but they did see prices largely level off from their descent in 2025.
“Pricing is starting to level out and is no longer a race to the bottom. When 100 Gbit/s connectivity demand rose, we did see pricing on 10 Gbit/s connections come down,” Hoisington said. “Similarly, we are seeing 100 Gbit/s pricing starting to decrease as more providers come out with their 400 Gbit/s offerings.”
Asquino said he’s skeptical that the price per gigabit would rise, as cable companies and local exchange carriers battle for customers.
“For some reason bandwidth is the only thing that doesn't follow inflation,” he said.
Partners have been working to offset their shrinking circuit businesses by targeting other parts of the IT stack. Unified communications, cybersecurity, and cloud infrastructure are among the cross-sell plays at their disposal.
“As an agent, where can we capture more wallet share to make sure we're still paying the light bill?” Slaughter said.
Disclosure: Informa, which owns a controlling stake in Informa TechTarget, the publisher behind Channel Dive, is also invested in Omdia. Informa has no influence over Channel Dive’s coverage.
