AI in Telecommunication Market

AI in Telecommunication Market Size

The global AI in telecommunication market was valued at USD 2.7 billion in 2024 and is projected to grow at a CAGR of 32.6% between 2025 and 2034.

The growing dependence on AI-based solutions within telecommunications is changing network operations, customer care, and infrastructure management. For instance, Ericson Mobility Report, 2023 indicated that mobile data traffic will increase by three times in the years between 2025 and 2029, which will create a need for automation in network management, consequently increasing the use of AI automation technology.

The AI integration in the telecom networks as well as fifth generation technology incorporates automation, real-time analysis, and anomaly detection. With AI, spectrum control is augmented, resulting in better bandwidth management and reduced lags in high traffic zones. Cyber threats are financially mitigated using AI powered fraud detection systems.

By way of example, the joint venture of Nvidia and Softbank in the United States launched their first AI & 5G integrated telecom network in November of 2024. This telecom system referred to as ‘Artificial Intelligence Radio Access Network’ is remarkably capable of efficiently servicing autonomous vehicles, robotic systems, and many other advanced AI technologies.

AI is further revolutionizing the aspect of telecom directly interacting with the clients using chatbots and digital assistants. AI systems have been deployed in call centers to automate responses to recurring interactions, increasing efficiency within the telecom system. Manual coding of bots to resolve issues using natural language processing. These initiatives are aimed at increasing customer satisfaction while significantly reducing support costs. In February 2023, for example, Bharti Airtel launched an AI solution in collaboration with NVIDIA that automatically responds to incoming contact center calls.

AI in Telecommunication Market Trends

• The implementation of AI in telecommunications is driven by the improved service delivery processes and the reduction of costs. Telecom operators can utilize AI-powered predictive maintenance to fix network problems, therefore decreasing downtime.
  
• Additionally, AI algorithms are helpful in managing network traffic for uninterrupted service. For instance, in January of 2024, the GSMA and IBM partnered to facilitate the use of generative AI in telecom by launching two initiative programs; an AI Training course under the Advance Program and the Foundry Generative AI Program which aims to assists telecom leaders.
  
• The development of 5G telecommunication networks is a great opportunity for the AI implementation in the telecommunications industry. The automation provided by AI improves the efficiency of network sharing, enabling telecoms to shift resources in response to a demand. For instance, Ericsson, a telecommunications and networking company reported that mobile subscriptions globally reached 8.46 billion in 2023 and are projected to reach 9.21 billion by 2029, further driving the demand for AI based management of telecom networks.
  
• Despite its benefits, AI adoption in telecommunications faces challenges related to high implementation costs and data security risks. These complexities discourage investment in AI by telecom providers who find it hard to merge modern AI technology with the existing obsolete infrastructure. Moreover, the integration of AI systems requires large customer data, which intensifies concerns over privacy issues and cybersecurity risks.
  

AI in Telecommunication Market Analysis

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Based on the component, the AI in telecommunication market is segmented into solution and service. In 2024, the solution segment held a market revenue of over USD 1.7 billion and is expected to cross USD 26.3 billion by 2034.

• From business processes automation, fraud detection to network performance monitoring, telecom companies are making use of AI tools. For example, in February 2024 ServiceNow along with NVIDIA expanded their partnership to develop Generative AI for the telecommunications industry to improve service delivery and automate processes.
  
• Telecommunication infrastructure increasingly rely on AI-based fraud detection tools to protect it from cyber security threats. Such tools apply machine learning to automatically identify and stop fraudulent actions in real time, thus, enabling telecom providers to adhere to stringent regulations and reduce financial damages due to security incidents. It strives to enhance service response through AI automation. For example, a messaging solutions provider, Tuvis, claimed that in the summer of 2024, there was a 177% increase of ransomware attacks in the telecom industry.
  
• Telecom companies are implementing AI powered customer services tools such as chatbots and virtual assistants for better customer interaction. By automating services with AI powered natural language processors, telecom providers can enhance customer satisfaction by being able to attend to clients at a faster pace, solving their issues with little to no human participation, which decreases costs while also increasing brand loyalty.
  

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Based on the deployment model, the AI in telecommunication market is divided into cloud-based and on-premises. The cloud-based segment held a major market share of around 65% in 2024 and is expected to grow significantly over the forcast period.

• Private AI implementations remain the top option for telecom providers that deal with sensitive customer and operational data. Such implementations provide higher levels of control over security, compliance, and data privacy regulations as telecoms secure their data within industry specific regulatory boundaries.
  
• Dell Technologies released the Dell AI for Telecom in September 2024. The application was designed to aid service providers in adopting AI via private deployments that could improve the network and customer service functions.
  

• The telecom sector is rapidly adopting Cloud based AI solutions AI due to its scalability, flexibility, and cost savings. With the incorporation of cloud computing, telecom providers were able to embed AI into their businesses without having to invest in a large base infrastructure, therefore making adoption at a broader level much simpler.
  
• AI as a Service (AIaaS) is gaining more traction among telecom operators because it permits access to data driven business intelligence for firms with limited resources. Such companies do not have the requisite in-house developers to service their needs. Specialized AI products catering to telecom service providers further streamline the development process while minimizing costs. AI-as-a-Service (AIaaS) market was valued at USD 9.7 Billion and is expected to grow at a CAGR of over 33% from 2024 to 2032.
  
• Network performance has been improved significantly with new Edge AI solutions which enables real-time data processing at the network edge. Such solutions have proven to decrease latency, enhance bandwidth control, and optimize telecom operations during high traffic loads ensuring better performance for mobile and broadband services.
  

Based on application, the AI in telecommunication market is segmented into Machine Learning (ML), Natural Language Processing (NLP), Deep Learning, and others. Machine Learning segment dominated the market and accounted for over USD 1 billion in 2024.

• Machine learning is a technology that enables predictive maintenance, network optimization, and fraud detection for AI powered telecom solutions. Telecom service providers use network-ML algorithms to reinforce service delivery by minimizing the possibility of network failures.
  
• Moreover, machine-learning-based technologies analyzes and identifies patterns and discrepancies in activities, mechanisms, and administrative controls improving the existing fraud detection measures and consequently reducing the losses suffered due to impersonation.
  

• The telecoms industry’s automation of customer support through advanced chatbots and AI virtual assistants, aided by NLP technology, is innovative. AI systems streamline customer interactions by tailoring responses according to previous interactions with the customer, and resolving issues quicker, enhances user experience. At the same time, telecom service providers take advantage of NLP as they are able to answer a wider range of consumer questions, thus achieving higher retention rates. As of 2023, the global market for Natural Language Processing (NLP)  has achieved a revenue value of USD 5.5 billion and is projected to grow more than 25 percent from 2024 to 2032.
  

• The use of deep learning algorithms for speech recognition and self-service automated call routing is on the rise among telecom outlets contact centers. This capability of AI classifies and routes calls automatically, thus customer calls are directed to relevant departments immediately and do not need any guidance from intermediaries.
  
• The use of AI in speech-to-text services is improving user engagement with telecom systems among people living with disabilities. The application of AI in transcription and translation has created new opportunities of communication for people from different backgrounds, which fosters diversity and inclusion. Aside from this, speech-to-text services have enhanced the indexing of telecom content, facilitating the retrieval of relevant information from the voicemail and call records.
  
• Automation powered by AI is also very important in the administrative control of a telecommunications network. With the use of AI, algorithms that specialize in the automation of certain activities related to the control of system resources are able to observe the functioning of the network, forecast failures, and allocate necessary resources to increase efficiency. According to Statista, the number of mobile subscribers using smartphones is expected to reach 7.7 billion by 2028, which emphasizes the increasing need for AI-powered telecom solutions.
  

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North America dominated the global AI in telecommunication market with a major share of over 35% in 2024 and U.S. leads the market in region.

• In the United States, AT&T, Verizon, and T-Mobile utilize AI technologies for network optimization and predictive maintenance. That's like saying SK Telecom acquired US AI startup Perplexity in February 2024 to provide their users with an AI powered search engine. The partnership enhances the digital services already offered by Perplexity, clearly showing how AI is revolutionizing the telecom industry.
  
• Other states like California and Texas are leveraging 5G integrated AI technologies IoT devices for network dependability and bandwidth management. These initiatives are equally as important to the AI telecom market as smart city projects.
  

The AI in telecommunication market in Europe is expected to experience significant and promising growth from 2025 to 2034.

• The application of Artificial Intelligence within Europe’s telecommunication industry is evolving with the funding that has been put into AI over Europe’s telecom sector. Suppliers utilize AI for fraud protection, as well as for the automation of several network functions and improvement of customer service. In predictive analytics, AI is employed to single out devices on a network that have a high probability of failure and require maintenance, thus reducing the exertion of service resources. Statista reports that in 2023, mobile coverage reached 99.2% of the population in rural areas, providing a very strong foundation for the telecommunications industry which relies on AI.
  
• In addition, automated systems powered by AI which reduce the need for human involvement in the management of telecom networks are also very efficient and cost effective. Uswitch, a telecom comparison business, notes that active mobile subscribers in the UK, exclusive of M2M subscriptions, hit 83.25 million at the closing of March 2022, which indicates a higher increase in usage of automation in the telecom’s business.
  

The AI in telecommunication market in the Asia Pacific is anticipated to witness lucrative growth between 2025 and 2034.

• China, India, and South Korea are leading the market in AI telecom innovations, investing heavily in smart cities and 5G infrastructure. Automation powered by AI is optimizing telecom processes and enhancing customer service. For instance, in February 2024, ServiceNow and NVIDIA partnered to provide generative AI solutions to the telecommunications sector, driving AI adoption in the APAC region.
  
• In the Asia Pacific Telecommunication market, AI powered predictive maintenance and cybersecurity solutions are becoming standard to ensure the integrity of a network during rapid digital transformation. The increasing adoption of AI in telecom fraud detection and call routing is further enhancing the region’s telecom landscape, driving operational efficiency and improving service quality.
  

The AI in telecommunication market in MEA is expected to experience significant and promising growth from 2025 to 2034.

• The MEA countries such as UAE and Saudi Arabia have begun incorporating AI into their telecom systems to enhance their smart city initiatives. The use of AI in automating service delivery, as well as in network traffic optimization has improved the efficiency of the network and the experience of the customers.
  
• The adoption of AI is also advanced through the use of AI-assisted analytics to optimize telecom revenue while preventing fraud. Additionally, predictive maintenance and AI-powered cybersecurity solutions support telecom service reliability as well as enable seamless connectivity and operational resilience within the region.
  

AI in Telecommunication Market Share

• Top 7 companies of AI in telecommunication industry are IBM, Google, Amazon Web Services (AWS), Microsoft, Nokia, Ericsson, Oracle, collectively hold around 40% of the market in 2024.
  
• As a consequence of heightened spending in AI predictive maintenance analytics and AI network automation, IBM is collaborating with telecom partners to enhance the automated AI network analysis and service delivery.
  
• Google is expanding the domain of AI in telecommunications by offering cloud AI services permitting automated network optimization and automation of customer service functions. The company is using machine learning models to improve network and customer satisfaction. For instance, in May 2024, Google Cloud and Bharti Airtel entered into a long-term collaboration to deliver cloud solutions to Indian businesses. The strategic collaboration offers a suite of cutting-edge cloud solutions from Google Cloud to fast-track cloud adoption and modernization for Airtel’s customers.
  
• AWS is leading the AI services for cloud computing in the telecom sector for predictive analytics and fraud detection. For instance, in 2024, AWS worked with telecom service operators for the implementation of AI self-automation for active network performance monitoring and security management.
  
• Microsoft is pursuing cybersecurity and telecoms solutions driven by AI to assist operators in network resilience improvement. The firm is developing AI-driven customer engagement tools as well as foresight analytics for telecom infrastructure optimization.
  
• Nokia is integrating AI and 5G through its suite of products for Spectrum Management and Network Sharing. The firm has developed AI applications for telecom operators that are designed to improve network uptime. For instance, in December 2024, Nokia revealed the activation of its advanced AI-driven MantaRay SON (Self-Organizing Networks) technology in India’s Vodafone Idea (Vi) 4G and 5G networks. This initiative is intended to enable high capacity and energy-efficient connectivity for Vi customers.
  
• Ericsson is using AI technology for the development of new intelligent tools for network and telecom service management geared towards raising their efficiency and lowering the response time. For instance, in 2024, Ericsson developed an AI-based platform for RAN automation to enhance real-time decision-making in the 5G environment.
  
• Oracle is developing its AI data processing and management systems for telecommunications operators to help them improve service delivery and regulatory issues. The focus of the company now is on AI-driven customer service and automation of procedures in telecom companies.
  

AI in Telecommunication Market Companies

Major players operating in the AI in telecommunication industry include:

• Amazon Web Services (AWS)
• AT&T
• Cisco Systems
• Ericsson
• Google
• IBM
• Intel
• Microsoft
• Nokia
• Oracle
  

Leading companies operating in AI in telecommunications market are investing in both facility optimization and service efficiency enhancement by leveraging AI-powered network automation and predictive analytics. There is an adoption of AI automation solutions by telecom operators to enhance network uptime, streamline operations, and enhance customer interaction and engagement.

Furthermore, the growth in demand for AI-enabled telecom solutions is stimulating the creation of custom AI applications aimed at fraud detection, customer service, and network security. As telecom providers try to achieve operational resilience and higher service quality, the shift towards more advanced AI solutions and cloud-based analytics will likely increase, driving market growth in the coming decade.

AI in Telecommunication Industry News

• In December 2024, Vodafone Idea (Vi) implemented the solution against spam messages together with Bharti Airtel and BSNL by adopting an AI- and ML-powered spam management feature. This feature has already flagged 24 million spam texts and alerts users by tagging potential spam messages as suspected spam.
  
• In December 2024 Tata Communications, a player in global communication technology unveiled Kaleyra AI, the AI portfolio aimed at enhancing customer engagement. This next-gen suite introduces three features that are beyond the conventional communication tools. Kaleyra AI utilizes Generative AI (GenAI) to enhance user interactions by providing effortless, highly effective, and extremely engaging experiences through the automatic incorporation of both voice and text communication channels, and live agent user interfaces.
  
• In November 2024, Skyvera completed the acquisition of CloudSense, a provider of cloud based Configure, Price, Quote (CPQ) and order management solutions built on the Salesforce platform for the telecommunications and media industries. This acquisition reinforces Skyvera’s position as a key player in the telecommunications software sector.
  
• In October 2024, Samsung cooperated with Japanese telecom operator NTT Docomo in the research on the application of AI in mobile communication, specifically in the network optimization and shifting to 6G. They intend to combine their joint competencies, market presence, and deep industry innovation to construct an AI framework for enabling new mobile technologies with the expectation to deploy 6G by 2030.
  

The AI in telecommunication market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($Mn/Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Solution
• Services

Market, By Deployment Model

• On-premises
• Cloud-based

Market, By Technology

• Machine Learning (ML)
• Natural Language Processing (NLP)
• Deep Learning
• Others

Market, By Application

• Network optimization
• Network security
• Customer analytics
• Virtual assistants
• Fraud detection
• Predictive maintenance
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa