Finnish telecom equipment maker Nokia has warned of rising costs for network infrastructure in India, citing supply chain disruptions and growing demand linked to artificial intelligence (AI). The company said that evolving AI-driven data usage will also change how telecom networks handle traffic, prompting operators to gradually adjust their infrastructure strategies.

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Rising Equipment Costs Amid Supply Chain Pressure

Nokia said shortages of key components, particularly memory chips, are pushing up the cost of telecom equipment, including 4G and 5G radio infrastructure. The supply constraints have been aggravated by ongoing geopolitical tensions in West Asia, which have disrupted global supply chains.

The company noted that cost pressures had already been building due to a shift in manufacturing capacity towards AI-focused hardware. The recent disruptions have accelerated the trend, making procurement more challenging for vendors and operators alike.

Nokia has initiated discussions with telecom operators in India about these rising costs, which are expected to increase capital expenditure for network expansion. The company remains a key supplier to major operators such as Reliance Jio, Bharti Airtel and Vodafone Idea.

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AI to Shift Network Traffic Patterns in India

Nokia said artificial intelligence is beginning to change the fundamentals of telecom traffic, with a gradual shift from download-heavy usage to higher uplink demand expected.

At present, nearly 90% of mobile network traffic is driven by downloads such as video streaming. However, AI-led applications are expected to increase the volume of data sent from devices to the cloud, altering this balance over time.

The company said Indian telecom operators are not yet undertaking large-scale upgrades specifically for AI. Instead, they are focusing on incremental improvements, including optimising existing 5G networks and enhancing efficiency through software upgrades.

Nokia added that AI-driven traffic patterns remain difficult to predict at this stage, and network changes are likely to be gradual as adoption scales.