AI in Telco: From Opportunities to Key Deployment Challenges

The telecommunications industry is no stranger to Artificial Intelligence (AI). However, with the recent explosion of public interest in AI, newer and more powerful AI applications are emerging, and the global market for AI in telco is projected to grow from USD 4.73 billion to USD 58.74 billion by 2032.

This has created a major issue for telcos to navigate: the sheer quantity of information online makes it difficult to distinguish between surface-level and specialist AI insights, as well as to understand which details are relevant within a telco context.

Let’s solve both of those issues by identifying the main opportunities for leveraging AI within telecommunications organizations, as well as some of the key challenges to be aware of.

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Why telcos are leveraging AI

In 2023, 41% of telco organizations claimed they were using or in the process of implementing AI within their business — and it’s obvious why so many are doing so. AI can have massive benefits in terms of speed, efficiency and consistency, helping telcos to streamline multiple areas of business and refocus their efforts on more strategic objectives. For instance, NVIDIA’s 3rd ‘State of AI in Telecommunications’ report found that 84% of telco professionals have increased annual revenue due to AI, while 77% have reduced operating costs.

Making these productivity gains is even more important in 2025, due to three key factors:

• The 5G era requires ultra-high speeds and low-latency, the likes of which can only be provided by AI decision making.
• There are now more than 16.6 billion IoT devices across the world. AI will be crucial to managing the data of all of those devices at the edge.
• Only 34% of telco customers are satisfied with their current service, according to the World Economic Forum. As customers and their demands grow, AI is the best way to improve consistency.

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How AI can benefit telco operations

There have been many high-profile applications of AI within the telco landscape in recent years. Ask AT&T (a plain language Gen AI tool) has helped shorten AT&T’s development cycles by 10-30%, while T-Mobile’s IntentCX has reportedly automated around 75% of the company’s customer service interactions. 

But the potential opportunities for AI extend well beyond these two use cases. Here are some of the main areas where telcos could make improvements with AI…

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AI telco opportunity #1: Support

Improving customer service is one of the biggest use cases, with 48% of Communication Service Providers (CSPs) and AI professionals ranking it as the primary goal of their AI implementation. Potential opportunities include…

• Customer service: Advanced chatbots and automated care.
• Issue escalation: Rapid issue diagnosis and delegation.
• Call transcripts: Automated transcripts, analyses, and summaries.
• Marketing: Hyper-personalized and AI-generated content.
• Sales: Data-led B2B lead enrichment.

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AI telco opportunity #2: Networks

Operational costs take up 65-70% of a telco’s average revenue, and network operations alone are expected to represent 50% of total operating expenses by 2027. There is therefore a huge opportunity for AI to improve network performance, with applications including…

• Optimization: Real-time service configuration and resource / traffic management.
• Maintenance: Predictive AI anticipating hardware / software faults.
• Security: Real-time threat detection and incident response.
• Expansion: Data-led identification of optimal locations for upgrades / expansions.
• Experimentation: Digital twins for simulating scenarios / configurations.

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AI telco opportunity #3: Development

Ever-increasing customer demands mean that telcos must deploy updates faster and more often. AI can play a vital role in this space…

• Code: AI-generated code / changes.
• Software lifecycle: Automated deployment and validation of changes.

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AI telco opportunity #4: Organizational

AI can also produce significant improvements behind the scenes, with organizational opportunities including…

• Decision-making: Data-led insights and decision-making.
• Employee support: AI assistants with Gen AI capabilities.
• Fraud prevention: Automated customer behaviour analysis.

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Five key challenges to leveraging AI within a telco environment

Integrating AI within a telco organization is a years-long process. Along the way, there are five key challenges that you’ll inevitably have to solve…

1. Navigating the skills gap: According to NVIDIA, 43% of telco professionals believe that finding AI experts is the key obstacle to adopting AI at scale. Remember, any talent you bring to your team will need to be highly knowledgeable in both AI applications and telecommunications.
2. Data quality: AI models are not infallible. They are prone to hallucinating and will replicate any biases in the data they are trained on. Data quality will improve over time, but it’s important for humans to continue validating any mission-critical AI outputs for the foreseeable future.
3. Regulatory compliance: AI is a highly regulated industry, and more regulations are likely to be released over the coming years. Handling the vast amounts of data produced by AI in a responsible manner will be key to success.
4. Cybersecurity: Malicious actors will inevitably use AI to increase the effectiveness of their cyber attacks. While AI can help you detect and respond to these threats, the models that AI defenses are built upon are also vulnerable to attack.
5. Infrastructure requirements: It’s essential that telco organizations ensure the continuation of their legacy systems, which can make integrating AI tools more complex and expensive. Telcos need to have a robust infrastructure in place (such as private clouds through OpenStack) before attempting to leverage AI. 

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What telcos need to do to start leveraging AI effectively

In order to leverage AI effectively, it’s essential that telcos have three technical prerequisites in place first. First: the relevant skills, experience and knowledge within the team to get started. Second: the tools to start exploring AI applications. And finally (and perhaps most importantly): the necessary policies and governance frameworks in place to ensure that AI is being used compliantly and responsibly.

If you want to upskill your development team and learn everything you need to know about leveraging AI within a telco environment, LabLabee’s hands-on training labs provide the practical experience and in-depth knowledge needed. Explore our full collection of hands-on training labs and upskill your team today.