The adoption of Generative AI (GenAI) in telecoms is growing, highlighting its transformative impact on the industry. Telcos are integrating AI into operations and developing innovative solutions for enterprise clients. Key trends include a focus on in-house large language models, multi-model platforms, and the emergence of telco-specific solutions, signalling a dynamic shift in the sector.
GenAI drives transformation across the telecom industry
GenAI is rapidly gaining traction within the telecom industry, with nearly 300 implementations recorded by November 2024, according to STL Partners’ Telco generative AI adoption tracker. This represents a 40% increase since August 2024 and a staggering fivefold growth over the past six months. The rise underscores the significant role AI-driven technologies are playing in reshaping telco operations and services.
In the tracker we have identified activity from 69 telecom operators, reflecting a robust push towards AI integration. Among these implementations, 51% are in full deployment, while 8% remain in trial phases, and 41% are in exploratory stages. This demonstrates the diverse levels of progress telcos have made in adopting and integrating AI technologies, while also showcasing their agility in leveraging GenAI across operations and product offerings, challenging initial scepticism within the industry.
Global distribution of generative AI implementation by telcos
Source: STL Partners
Shifting industry dynamics and strategic trends
Three significant trends are shaping the telco sector’s approach to GenAI:
1. Our research revealed that 47% of GenAI projects by telcos focus on developing solutions for enterprise clients. Telcos are creating offerings such as AI-powered chatbots and GenAI-enabled infrastructure to cater to businesses lacking the time, skills, or interest to develop these capabilities independently. This trend signals a strategic pivot by operators to expand their value propositions and deepen customer relationships in the enterprise market.
2. Many operators are focusing on developing in-house large language models (LLMs). This approach reduces their reliance on third-party providers like OpenAI or Google, ensuring greater control over their AI capabilities and data.
3. Telcos are working on creating multi-model platforms. These platforms help telcos avoid dependency on a single vendor, providing the freedom to choose and combine the best solutions for various applications while maintaining a competitive edge in the rapidly evolving AI landscape.
Telco-specific GenAI solutions are emerging
The surge in GenAI adoption has spurred a wave of innovation among solution providers. In November 2024, STL Partners identified 50 new GenAI solutions designed to support telco-specific needs, with over 75% tailored exclusively for the industry. The remaining solutions are optimised for telecommunications as part of broader, multi-industry applications. This flurry of activity underscores the growing competition among solution providers and vendor partners, with 44 solution providers and 17 vendor partners actively seeking to contribute to this transformation. It also reflects the telecom sector’s ambition to rapidly adopt and scale GenAI technologies to drive innovation and efficiency.
Generative AI solutions for the telecom industry
Source: STL Partners
Still a long road ahead
Despite the impressive growth, STL Partners believes the industry is still in its early stages of GenAI adoption. With many telecom operators are yet to unveil their GenAI initiatives, there is substantial untapped potential for innovation and transformation in the sector. As the ecosystem evolves, the impact of GenAI on the telecom industry is expected to grow strongly.
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