Telcos may soon offer AI services to customers, but there are other ways to leverage new tech too
AI is touching every corner of the tech industry, including telecommunications. For decades, the industry’s core business model has remained relatively static — sell connectivity. But as AI reshapes enterprise technology, telcos are discovering that their existing infrastructure puts them in a uniquely valuable position.
The shift is already underway. Current B2B AI revenues across the telecom sector are projected to reach $4 billion in 2025, with expectations to grow at a 65% compound annual growth rate through 2030. That trajectory reflects a broader industry realization — that the same assets that enable connectivity can be repurposed to deliver AI-powered services, turning telcos from utility providers into technology companies.
Market growth
The financial opportunity around AI is substantial, but capturing it requires telcos to rethink their role in the technology stack. Historically, telecommunications companies have operated as infrastructure providers – essential, but largely invisible to end users except when something goes wrong. AI changes that equation by creating demand for compute, low-latency processing, and intelligent services that telcos are uniquely positioned to deliver.
The projected growth rate reflects both supply and demand dynamics. On the demand side, enterprises across every sector are seeking AI capabilities but lack the infrastructure or expertise to build them internally. On the supply side, telcos possess data centers, edge networks, and customer data that can be monetized in new ways. The challenge lies in execution – transforming legacy operations into agile, AI-driven service offerings.
Early movers are already demonstrating what’s possible. Some telcos report 2x in-year returns on investment from generative AI implementations, while proprietary AI tools optimizing customer support have delivered 9-12x ROI. These figures suggest that the monetization opportunity is real, but success depends on identifying the right use cases and deploying capital efficiently.
Key strategies
Telcos are capitalizing on AI through several primary revenue channels, each leveraging existing infrastructure in distinct ways.
GPU and computing services represent one of the most direct monetization paths. With GPU demand consistently exceeding supply, telcos can monetize their data centers by offering AI computing power to enterprises and government entities seeking sovereign AI solutions. This effectively transforms telecommunications companies into GPU-as-a-service providers, or NeoClouds, competing alongside traditional cloud hyperscalers. The advantage telcos bring is geographic distribution – data centers positioned closer to population centers can offer lower latency and meet data residency requirements that centralized cloud providers cannot.
AI-Driven customer engagement builds on capabilities telcos have developed internally. Years of managing high-volume customer interactions have forced telecommunications companies to invest heavily in automated support systems. Those same AI-enhanced customer service capabilities can now be packaged as enterprise solutions for other organizations operating large call centers. The product isn’t just software – it’s operational expertise refined through millions of customer interactions.
Fraud detection and risk management offers another service-based revenue stream. Telcos have long battled subscription fraud, SIM swapping, and revenue leakage. By offering fraud detection as a service, they can monetize that expertise while enhancing customer trust. For enterprises in financial services, e-commerce, and other fraud-prone sectors, telco-grade detection capabilities represent a compelling value proposition.
Personalized marketing leverages one of telcos’ most valuable but underutilized assets: customer data. By applying AI to behavioral insights and usage patterns, telecommunications companies could deliver hyper-personalized offers that increase average revenue per user, and some telcos, like Airtel, have already started to experiment with this. The same capabilities can be offered to enterprise partners, creating new advertising and marketing revenue streams. This, of course, would have to be done with a privacy-first approach.
Edge AI and infrastructure may represent the largest long-term opportunity. With 5G networks already deployed and 6G on the horizon, telcos can offer AI services closer to end users than any cloud provider. Applications requiring ultra-low latency – autonomous vehicles, industrial automation, augmented reality – depend on processing that happens at the network edge rather than in distant data centers. Telcos own that edge infrastructure, positioning them as essential partners for next-generation AI applications.
Voice AI solutions round out the monetization portfolio. Integrating real-time voice AI services creates new products for subscriber engagement and retention. As voice interfaces become more prevalent across consumer and enterprise applications, telcos can leverage their experience managing voice networks to deliver differentiated AI-powered products.
Current performance and adoption
The numbers suggest that telcos are increasingly serious about AI as a revenue driver. Around 47-51% of telco generative AI implementations are now designed to provide AI-related services to enterprises, up from 25% earlier in 2024. The shift from internal efficiency projects to external revenue-generating services marks a meaningful evolution in how the industry views AI’s strategic importance.
The rapid increase in enterprise-focused AI implementations suggests that telcos are finding willing buyers for their new capabilities. Enterprises seeking AI solutions face a fragmented vendor landscape and often lack the infrastructure to deploy models at scale. Telcos offer a familiar commercial relationship, established trust, and infrastructure that’s already in place.
Evolution
The industry is evolving toward what some analysts call “Connectivity-as-a-Service,” where AI agents dynamically manage connectivity on behalf of users rather than customers purchasing static monthly plans. This transformation enables telcos to move from selling access to delivering intelligence-driven services.
In this model, connectivity becomes a component of a broader service package rather than the product itself. An autonomous vehicle doesn’t need a monthly data plan. It needs reliable, low-latency connectivity that adapts to its operational requirements in real time. AI agents can manage these requirements dynamically, allocating network resources based on actual demand rather than pre-purchased capacity.
For telcos, this evolution offers both opportunity and risk. The opportunity lies in becoming trusted AI infrastructure partners, deeply embedded in enterprise operations and capturing value through service delivery rather than commodity connectivity. The risk is that failing to make this transition leaves telcos vulnerable to disintermediation by cloud providers, equipment vendors, and AI-native companies that lack legacy infrastructure but move faster.
The telecommunications industry has reinvented itself before, from voice to data, from fixed to mobile, from analog to digital. The AI transition may prove equally transformative, turning connectivity providers into technology companies and opening new revenue streams that dwarf traditional subscription models. The question is whether telcos can execute quickly enough to capture the opportunity.
