Telecommunications Industry Investment in Artificial Intelligence Software, Hardware, and Services Will Reach $36.7 Billion Annually by 2025

Network Management and Automation Applications to be the Leading Driver of AI Adoption Among Telecom Network Operators

The telecommunication service provider market has historically been a capital-intensive industry with high fixed costs, which has put pressure on network operators to control their operating expenses, particularly human capital. This tension surrounding profitability is intensifying. Many network operators crossed the point where revenue per bit is lower than cost per bit in 2017. Telecom operators are threatened by fast and highly efficient web-scale companies and are straining under the challenge of digital transformation. On top of all that, telecom operators must solve how to profitably manage and operate the dizzyingly complex next-generation 5G/Internet of Things (IoT) networks.

According to a new report from Tractica, these market conditions and economic pressures will drive significant demand among telecom network operators for artificial intelligence (AI)-driven automation solutions in the years ahead. The market intelligence firm forecasts that global telecommunications industry investment in AI software, hardware, and services will reach $36.7 billion annually by 2025.

The leading use case for telecom AI deployments will be network operations monitoring and management, representing 61% of the sector’s AI spending between 2016 and 2025. Other key AI applications will include virtual assistants for customer service and marketing, intelligent customer relationship management (CRM) systems, and cybersecurity, among others.

“The telecom industry is ripe for AI-driven solutions, with their promise of lowering costs and boosting efficiencies through automation,” says principal analyst Mark Beccue. “Many telecom operators have begun to experiment and deploy AI-driven solutions in both customer-facing and internal organizations.”

Tractica’s report, “Artificial Intelligence for Telecommunications Applications”, examines the market and technology issues surrounding telecom AI use cases. The technologies covered include machine learning, deep learning, natural language processing, and machine reasoning. It presents profiles for key industry players throughout the ecosystem. The report also includes global software, hardware, and services market forecasts for telecom AI, segmented by region and use case, covering the period from 2016 through 2025. An Executive Summary of the report is available for free download on the firm’s website.

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