A new study shows how AI is reshaping the telco value chain: Two experts decode the story behind the numbers

The telecom industry is undergoing a massive change. Communication service providers (CSPs) who embed AI across their operations not only optimize costs—they also gain a head start in unlocking entirely new revenue streams. This shift redefines the role of CSPs in the digital economy and positions them as key innovators.

The numbers tell a compelling story. According to IBM's latest research, “Telecommunications in the AI era”, 77% of telecom executives say that AI is already improving their responsiveness to market disruptions. In fact, 75% report that AI delivers clear competitive advantages. Yet here's the critical gap: 65% admit their AI initiatives haven't delivered the expected value.

What separates AI leaders from laggards in telecom? It's not just the technology—it's the capacity to deliver at scale with precision and impact.

Rahul Kumar, Senior Partner and Vice President and Global Industry Leader for Telco and Media at IBM Consulting and Gina Holmes, US Telecommunications Industry Leader and VP and Senior Partner at IBM Consulting, decode the findings from the study. They reveal how forward-thinking CSPs are moving beyond isolated pilots to transform their entire value chain.

The era of AI as an experimental add-on is over. The study reveals that more than 80% of telecom executives say that generative AI redefines the role of their organization within the next three years. These developments aren't marginal gains—they signal a fundamental shift in how telecoms operate and compete.

CSPs are moving from isolated pilots to enterprise-wide transformation, embedding AI across the value chain from customer care to network optimization. Notably, 44% of CSPs have deployed autonomous AI in customer chatbots to enhance service and reduce friction.
But the real differentiator is how quickly and effectively CSPs can scale these efforts beyond individual use cases to transform entire business models.

Despite growing adoption, a value gap exists. According to the same study, 55% of AI investment currently supports efficiency initiatives like network performance optimization and automated customer service. That proportion is projected to decline to 46% by 2027. Meanwhile, investment in business model innovation is rising—from 14% today to 19% in 2027—signaling a fundamental redesign of how CSPs create and capture value. 

The gap lies not in ambition, but in execution. Many organizations still lack the data infrastructure, governance and cross-functional alignment needed to scale AI effectively.

Merely deploying the AI technology is not sufficient. The key to success lies in integrating it into the operating model. That means building AI centers of excellence, modernizing data platforms and maintaining human-in-the-loop governance, in support of driving responsible business outcomes.

The IBM Institute for Business Value study shows that generative AI is live in customer care for 69% of telecoms. Meanwhile, agentic AI—capable of autonomous decision-making—is being used by 44% of CSPs. These technologies are enabling real-time insights, personalized experiences and operational efficiency across the board.

Momentum is building in areas such as network automation, edge intelligence and service assurance, but leading CSPs are already pushing further. 

For example, Bharti Airtel, a leading CSP in India, has deployed an AI-powered anti-SPAM network that flags over 8 billion spam calls and 1 billion spam SMS messages. It identifies nearly 1 million spammers daily. The company also launched an AI-driven RAN energy management solution, expected to save USD 12 million annually while reducing its carbon footprint.

Meanwhile, China Mobile has introduced over 24 AI products. One of them, Lingxi—an intelligent customer assistant—handles 90% of first-line inquiries and has boosted customer satisfaction by 10% in pilot regions. The company also uses AI-powered predictive analytics to reduce network repair times by 30% and AI-based energy management to dynamically optimize power usage across its RAN infrastructure.

As AI becomes embedded in critical infrastructure, telecom providers are turning to performance dashboards to bring transparency and accountability to AI-driven initiatives. These tools help shift AI from a black box to a visible engine for business value—tracking model drift, triggering retraining and alerting teams when KPIs fall below thresholds. Governance dashboards also support regulatory compliance by offering transparency logs for audit purposes.

To ensure sustained impact, continuous monitoring and agile feedback loops are essential. But measuring the right things matters equally. Focusing solely on cost can obscure gains in customer experience or business growth.

That insight is why leading telecom adopters track a balanced set of KPIs—most often cost savings, customer satisfaction, AI-driven revenue growth and operating margin. Over the past year, CSPs have reported real, measurable improvements across these high-priority performance areas.
By anchoring AI initiatives in business outcomes and operational KPIs, CSPs can ensure that innovation translates into growth, efficiency and long-term competitive advantage.

Based on the IBV research and our work with leading CSPs worldwide, these strategic actions separate AI leaders from followers: 

1.    Integrate AI across high-value business functions with cross-functional teams, measurable KPIs and governance for ROI-driven innovation. Invest in AI Co-Es to build momentum, increase adoption and establish the enterprise-wide approach to using AI to deliver business outcomes.

2.    Unlock faster ROI with small language models trained on telecom-specific and your enterprise data. These models enable optimized costs for AI and tailor the outcomes based on your data, differentiating you from the competition.

3.    Enable scalable, real-time AI with data products and industrialized data pipelines to power personalized experiences, operations, assurance and optimization.

4.    Co-create AI-powered, industry-specific solutions in partnership and collaboration with ecosystem stakeholders. Coupled with sovereign data and AI offerings, this strategy creates monetization opportunities across customer segments, from government and large enterprises to small and medium businesses.

5.    Shift investments to leverage latest advancements in AI to gain early advantage. For instance, piloting and strengthening agentic AI capabilities can progress zero-touch and closed-loop outcomes, enabling highly optimized and proactive operations with human-in-the-loop oversight.

The future of telecom is intelligent, agile and ecosystem-driven. CSPs that act now—armed with a clear strategy and trusted partnerships—will lead the next wave of industry transformation.

AI is no longer a theoretical advantage. It’s a competitive necessity. As CSPs navigate this new era, success depends on their ability to scale AI with purpose, modernize their infrastructure and deliver measurable outcomes.

The journey is underway—and the leaders are already emerging.

Read more about the IBV study “Telecommunications in the AI era”