Artificial intelligence has the potential to rewrite a telco's investment case, but only if CEOs force a strategic rethink. They must urgently move their organization away from today's isolated, cost-cutting AI pilots to an organization-wide transformation focused on value creation.
By shifting the agenda, they can engineer an organizational renewal, fully reimagining key processes such as customer service and network operations with autonomous AI agents. This not only drives efficiency but can unlock new growth engines.
Becoming an AI-first telco like this can deliver a 15 percentage-point uplift in EBITDA and a 10 percentage-point uplift in EBIT. That is a financial transformation long overdue in an industry where conventional efficiency projects are yielding diminishing returns and ARPU growth is elusive.
The Productivity Agenda
Customer care is a key opportunity. This is much more than deploying AI chatbots to divert calls from human operators. AI agents should authenticate and detect intent, then offer an always-on omnichannel digital concierge. Calls that need human attention should be aided by real-time scripts, including agent coaching based on best-performer models. Agents should then perform root cause analysis and generate customer insights for sharing across the company.
This can deliver a productivity gain of 45% to 60%.
Network operations can also see significant improvement. Again, this should go beyond simple AI deployment that fixes isolated pain points. A series of reusable assets and agents can operate across the tech stack, from sensor agents monitoring telemetry to agents that schedule engineers and provide on-site advice. A higher-level “agent orchestrator” can coordinate the overall action plan, including deploying diagnostic agents for root cause analysis and prevention.
Productivity here can increase by 40% to 50%.
Significant but smaller productivity improvements can also be seen in IT/digital platforms, including software development and IT operations, as well as in corporate functions such as procurement and HR.
Overall, we see the potential for a 30% to 40% productivity gain.
Growth on the Menu, at Last
The productivity gains are valuable—but telcos have been down this path many times. The AI-enabled telco has something new, however: a growth opportunity.
Our AI-first scenario includes a 2% to 3% revenue increase. This is driven by hyper-personalized customer value management and dynamic pricing, which can help increase ARPU. It also includes new growth engines such as network-as-a-service (NaaS), which allows enterprises to consume bandwidth via software. These drive roughly 30% of the projected EBITDA improvement.
An added bonus is reduced revenue leakage through automated revenue management. This is particularly helpful in ensuring all value-added services for enterprise customers are properly captured and billed.
The AI-Enabled Nervous System
These benefits cannot be realized by simply deploying AI; they come from reshaping the organization. This allows multiple AI initiatives to connect to deliver end-to-end transformation, with assets and AI agents reused.
The “agent orchestrator” role mentioned earlier is an important element, organizing more specialized AI agents to handle even more complex tasks. This, in turn, unlocks high-level benefits, such as root-cause analysis. Only a strategic approach can ensure that this complex “observe-plan-act” cycle connects key processes across the enterprise.
Of course, an investment case is needed, and there will be increased recurring costs—for instance, the costs of running the AI engines. However, the organization will retain at least 70% of the net benefit and perhaps as much as 90%, delivering a five-year internal rate of return of 20% to 35%.
The Journey to Being AI-First
A purposeful approach is needed. First steps:
- Execute a readiness self-check. Secure C-level and business alignment, establish a three-year investment horizon, and make sure each major solution has clear P&L accountability.
- Apply the 10-20-70 rule. Put 10% of the effort on algorithms, 20% on tech, and 70% on people.
- Get the data ready. This is critical in achieving consistent agent performance.
- Accept the need for some internal development. Off-the-shelf solutions can be useful, but sometimes only internal development can deliver the business context, reusability, and the right architectural fit.
- Above all, don’t deploy—reshape. Strategic, enterprise-wide benefits come from redesigning end-to-end workflows with embedded AI. This inherently introduces cross-functional integration as analytics, operations, and customer engagement must operate as part of a single, orchestrated system rather than in silos.
A New Narrative for Telcos
AI-powered transformation disrupts the pessimistic investor narrative around telcos, which, aside from some emerging-market players, are seen as low-growth and investible only because of dividends. Weak monetization of 5G and fiber-to-the-home has reinforced this view.
However, timing is key. Although productivity improvements are available to all, the revenue growth opportunities will be seized by the first movers in each market. Only those who move now will capture the full benefits of being an AI-enabled telco.
