New study shows how AI is reshaping the telco value chain

The integration of artificial intelligence (AI) into the telecommunications (telco) value chain is a transformative dynamic that is reshaping the landscape for communication service providers (CSPs). According to a recent study conducted by the IBM Institute for Business Value, AI technologies, particularly generative and agentic AI, are making significant strides in enhancing operational efficiency, improving customer experiences, and driving profitability within the telecommunications sector.

### Current AI Adoption in Telecommunications

The study highlights that 69% of telecom companies have incorporated generative AI into their customer care operations. This technology enables these providers to offer real-time insights and personalized experiences, streamlining customer interactions while reducing operational costs. Meanwhile, agentic AI—capable of autonomous decision-making—has been adopted by 44% of CSPs. This evolving AI landscape indicates a growing reliance on machine learning and intelligent systems to optimize performance.

Telecom providers are increasingly investing in AI technologies that facilitate network automation, edge intelligence, and service assurance. Notable examples of companies pushing the envelope include Bharti Airtel, which has developed an AI-powered anti-SPAM network that identifies nearly 1 million spammers daily—flagging over 8 billion spam calls and 1 billion spam SMS messages. Furthermore, Airtel’s AI-driven radio access network (RAN) energy management solution is projected to save the company USD 12 million annually while minimizing its carbon footprint.

China Mobile is another industry leader, having introduced over 24 AI products, including “Lingxi,” an intelligent customer assistant that handles 90% of first-line inquiries. The introduction of Lingxi has reportedly improved customer satisfaction by 10% in pilot regions. Additionally, the company employs AI-powered predictive analytics to reduce network repair times by 30% and manages energy usage intelligently within its RAN infrastructure to optimize power consumption.

### Transparency and Governance in AI Utilization

As AI technologies become deeply embedded into critical telecommunications infrastructure, CSPs are prioritizing performance dashboards to bring transparency and accountability to their AI initiatives. These tools are essential for transforming AI from a “black box” into a transparent driver of business value, allowing companies to track model performance, assess when retraining is necessary, and identify when key performance indicators (KPIs) sink below acceptable thresholds.

Moreover, governance dashboards are increasingly vital for achieving regulatory compliance while offering audit trails in an age marked by stringent data protection and privacy regulations. Continuous monitoring and agile feedback loops are critical for the long-term success of these AI-driven operations. However, organizations must balance their focus on cost-saving metrics with a recognition of improvements in customer experience and overall business growth.

### The Importance of Balanced Metrics

Leading telecoms are realizing that a singular focus on cost containment may obscure significant gains in customer satisfaction and operational performance. To that end, many pioneering CSPs track a balanced set of KPIs, which include not just cost savings, but also customer satisfaction, AI-driven revenue growth, and operating margins. Over the past year, CSPs have reported measurable gains across these key performance areas, attesting to the positive impact of AI integration.

By anchoring AI initiatives firmly in business outcomes and operational metrics, CSPs can transform innovation into growth, operational efficiency, and sustainable competitive advantage. The broader implications for the telecommunications industry cannot be overstated; consistent reporting on both financial and customer-centric KPIs ensures that stakeholders remain informed and engaged with the performance of AI-driven initiatives.

### Future Perspectives

Looking ahead, the telecommunications industry stands on the brink of a major evolution fueled by AI capabilities. As CSPs increasingly deploy sophisticated technologies that extend beyond basic automation to include predictive analytics and intelligent network management, they are likely to achieve unprecedented levels of operational agility and customer service excellence.

Moreover, as AI technologies continue to evolve, the industry may also witness innovations that further drive business efficiency and customer satisfaction. Upcoming trends, such as AI’s role in the 5G rollout and enhanced network resilience, will provide new opportunities for CSPs to enhance service delivery and capitalize on emerging markets.

### Conclusion

The findings from the IBM Institute for Business Value study reveal that the telecommunications sector is in the midst of a significant transformation fueled by generative and agentic AI technologies. By leveraging these innovations, CSPs can streamline processes, enhance customer interactions, and drive profitable growth. However, it is essential for telecom providers to adopt a balanced approach to KPI tracking, ensuring that their focus includes both financial success and the overarching customer experience.

As AI technologies become increasingly integral to the telco value chain, the potential for long-term benefits will grow, rewarding those that prioritize transparency, accountability, and continuous monitoring. With a strategic focus on business outcomes, the future looks promising for CSPs willing to embrace AI as a key driver of innovation. As they forge ahead, the lessons learned and successes achieved will serve as a blueprint for the entire telecommunications industry, guiding the path for AI integration in the years to come.

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