Market Overview
Global
Artificial Intelligence (AI) in Telecommunication Market is valued at
USD 3.6 billion in 2023, and it is further anticipated to reach a market value of
USD 131.2 billion by 2033 at a CAGR of 43.1%.
Artificial Intelligence (AI) in telecommunication is the process of using advanced computing techniques to enhance various aspects of communication networks and services. Optimizing network performance, managing resources efficiently, improving customer experience through personalized services, and automating processes like network maintenance and troubleshooting are the tasks included in these processes. It analyzes large amounts of data generated by network operations, customer interactions, and other sources which involves the use of algorithms and
machine learning models.
The market has gained momentum in the recent past and is predicted to grow significantly during the forecasted period as well. AI is important in improving network performance within the telecom industry. By including AI, telecom providers can effectively analyze data gathered from network sensors, allowing them to identify & address potential issues before they increase into outages, such a proactive approach allows telecom companies to take preventative measures, creating a more reliable & uninterrupted network service for their customers. There is a growing demand for AI in telecommunication to enhance network performance and customer experiences.
Key Takeaways
- Market Size: Global Artificial Intelligence (AI) in Telecommunication Market is estimated to grow by 124.0 Bn at a CAGR of 43.1% during the forecasted period.
- Market Definition: AI in telecommunication uses advanced machine learning processes to enhance communication networks and services.
- Component Analysis: By component, the solution segment is expected to lead with the largest market share of 63.1% in 2024 & is anticipated to dominate throughout the forecasted period.
- Deployment Analysis: By Deployment, On-premises is expected to come out as a dominant force with the largest revenue share of 72.6% during the forecasted period.
- Technology Analysis: By Technology, Natural Language Processing (NPL) is expected to come out as a dominant force with the largest revenue share of 35.6% during the forecasted period.
- Application Analysis: By Application, virtual assistance is expected to have led throughout the forecasted period with the largest revenue share in 2024.
- Regional Analysis: North America is expected to hold a 37.1% revenue share in the Global AI in telecommunication market in 2024.
Use Cases
- Network Optimization: Artificial Intelligence (AI) analyses network data to identify patterns, predict network congestion, and optimize network resources in real-time which leads to improved network performance, reduced downtime, and enhanced quality of service for customers.
- Fraud Detection and Prevention: They are important in identifying fraudulent activities such as unauthorized access, SIM swapping, or suspicious call patterns.
- Predictive Maintenance: Telecom companies can anticipate equipment failures before they occur by using the enormous potential of generative AI as they are able to detect anomalies, predict potential failures, & schedule maintenance proactively by analyzing data from various sensors and devices.
- Customer Service and Support: Immensely famous AI chatbots and virtual assistants are transforming customer service in the telecom industry as ai is being employed to handle routine customer inquiries, provide instant support 24/7, and even assist in troubleshooting network issues.
Market Dynamic
Drivers
AI's Role in Network OptimizationThere is a growing requirement for improved, efficiency and performance of telecommunication networks with ongoing advancements. They play an important role in optimizing a network by predicting and preventing failures which ensure optimal resource utilization, & help in minimizing downtime. These optimizations heavily influence the increasing growth of AI in telecommunication, thus driving the growth of the market.
Improved network reliability and performance
AI in the telecommunication market is growing due to its capability to improve the reliability and performance of networks. Incorporation of AI into network optimization boosts customer satisfaction, along with a decrease in downtime. Expansion of the AI enhances user experiences and establishes AI as a tool for telecom providers aiming to stay competitive in a dynamic market. AI enables the growth of the AI sector within telecom, paving the way for advanced capabilities and services.
Restraints
Shortage of Skilled Workforce
The lack of skilled professionals with knowledge in AI and telecommunications restraints the growth of the market. Deploying AI solutions needs specific knowledge and a thorough development of advanced technology. A shortage of skilled talent can slow down innovation and implementation efforts.
Difficulties in Safeguarding Confidential Information
Telecom companies handle a lot of sensitive data which includes customer information and the configuration of different networks. They need to ensure the security and privacy of customer data by using AI technologies which poses an obstruction related to compliance, data governance, and cybersecurity risks. Incompatibility between telecommunication systems and AI technology may restrain the market from growing at its full potential during the forecasted period.
Opportunities
Multimedia Features
The availability of AI-powered smartphones, offering features like robust security, image recognition, & voice recognition, in comparison to traditional phones, presents major growth opportunities for AI in the telecommunication sector. The increasing adoption of AI is creating lucrative opportunities for growth in the telecom industry.
Emergence of OTT platform
Over-the-top services like video streaming have revolutionized how audio & video content is distributed and consumed, leading to an increase in demands from consumers. To manage this growing traffic, telecom companies witness growing operational costs. AI comes to the aid of reducing these costs through lower human involvement in network configuration & maintenance, supporting the industry to streamline its operations efficiently.
Trend
Adoption of AI as System Integrators and Infrastructure Developers
AI within the telecommunications value chain includes AI solution providers, system integrators, and end users, each playing an important role in product improvement. Manufacturers mainly rely on selecting the appropriate system integrator possessing the expertise, experience, and resources for comprehensive customer support and predictive maintenance. They also provide value-added support such as remote monitoring and self-diagnostic functionalities.
AI in 5G integration
There is a demand for AI-driven solutions in 5G integration which is needed for predictive maintenance, real-time analytics, and improved network performance. AI is harnessed by telecom companies to maximize the capabilities of 5G, delivering creative solutions & adapting to changing consumer demands. The integration of AI in 5G technology is driving advancements in telecommunications, enhancing connectivity and efficiency.
Research Scope and Analysis
By Component
As a component, Artificial Intelligence (AI) in telecommunication market is segmented into two categories that are solutions and services. The solution segment is expected to take the lead in the global AI in the telecommunication market with a revenue share of 63.1% in 2024 & is anticipated to maintain its dominance throughout the forecasted period, which is primarily because many key players in the market of telecommunication with complex communication demands require customized networking solutions. AI solutions in various telecom sectors are revolutionizing how services are delivered and managed.
In addition, the services segment is also anticipated to experience high growth due to the increasing demand for professional & managed services to meet the growing demand of the telecom sector in AI applications. This increased demand is set to drive the overall growth of global AI in the telecommunication market.
By Deployment
On-premises deployment is expected to lead the Artificial Intelligence (AI) in telecommunication market with the largest market share in 2024, as on-premises deployment is a method where the AI systems & software are installed & operated within the telecom company's physical infrastructure rather than depending on external cloud-based services, which is preferred by various telecom companies for reasons such as data security, compliance, & full control over their AI systems.
In addition, On-premises deployment enables telecom companies to keep sensitive customer data within their own data centers, creating better privacy & regulatory adherence. However, it may require higher initial investments in hardware & maintenance compared to cloud-based solutions. Yet, this deployment option provides telecom companies with a customized AI environment that aligns with their specific needs & security requirements.
By Technology
Natural Language Processing (NLP) is anticipated to be the major driving force in Artificial Intelligence (AI) in the telecommunications market in 2024
with a revenue share of 35.6%, as NLP is a technology that allows computers to understand, interpret, & generate human language. In addition, NLP is used to analyze & process large text & speech data, making it easier for telecom companies to take out valuable insights from customer interactions, social media conversations, & other sources of unstructured data. However, telecom providers use NLP to improve customer service via chatbots & virtual assistants that can contain & respond to natural language queries, enhancing customer satisfaction & operational efficiency. Additionally, NLP supports sentiment analysis, fraud detection, & network optimization, contributing significantly to the overall effectiveness of AI applications in the telecommunication sector.
By Application
The global Artificial Intelligence (AI) in the telecommunication market is categorized into Network Optimization, Customer Analytics, Network Security, Self-Diagnostics, & Virtual Assistance segments based on its applications. Among these, the virtual assistance segment is predicted to hold the largest market share in 2024, mainly because of its transformative impact on customer interactions & support services. AI-powered virtual assistants grow in handling customer queries, providing personalized recommendations, & performing tasks like bill payments or service activations, which leads to enhanced customer satisfaction, fewer wait times, & growth in operational efficiency.
Virtual assistants are available 24/7, providing consistent service & limiting the need for human intervention, as they seamlessly integrate with different channels like websites, apps, & voice interfaces, delivering convenient & convenient customer experiences. The rise in demand for improved customer support & the preference for self-service options are major factors contributing to the dominance of the virtual assistance segment in the AI in the telecommunication market.
The Global Artificial Intelligence (AI) in Telecommunication Market Report is segmented based on the following
By Component
By Deployment
By Technology
- NPL (Natural Language Processing)
- Machine Learning
- Data Analytics
By Application
- Network Security
- Network Optimization
- Customer Analytics
- Virtual Assistance
- Self-Diagnostics
Regional Analysis
North America is predicted to lead the AI in the telecommunication market
with the largest revenue share of 37.1% in 2024, and it's projected to maintain its leadership in the coming years, which is due to the region being quick to adopt cutting-edge technologies. Additionally, the growth in the use of automation & AI by telecom companies for customer service & enhancing their networks will further boost the region's growth. The increasing number of telecom firms in this region are adopting AI and automation to enhance customer service and optimize their networks, which is anticipated to contribute to the region's expansion. Advanced telecommunication in this region characterized by strong network connectivity, high-speed internet, and extensive coverage, which makes it a key growth driver in the region.
In addition, Asia Pacific is expected to experience the most rapid growth during the forecast period, driven by rapid technological progress in emerging economies like China & India. For instance, companies like Huawei Technologies & China Telecom are working in partnership to explore areas such as radio cell capacity prediction & spotting anomalies in wireless network cells using the Network AI Engine (NAIE), contributing to the region's growth.
By Region
North America
Europe
- Germany
- The U.K.
- France
- Italy
- Russia
- Spain
- Benelux
- Nordic
- Rest of Europe
Asia-Pacific
- China
- Japan
- South Korea
- India
- ANZ
- ASEAN
- Rest of Asia-Pacific
Latin America
- Brazil
- Mexico
- Argentina
- Colombia
- Rest of Latin America
Middle East & Africa
- Saudi Arabia
- UAE
- South Africa
- Israel
- Egypt
- Rest of MEA
Competitive Landscape
The global Artificial Intelligence (AI) in the telecommunication market experiencing consolidation, where a few of the dominant players hold a significant share of the industry. Major players have established themselves as leaders in delivering AI solutions for telecommunications, benefiting from their large resources, established customer relationships, & advanced technologies. This consolidation builds a competitive landscape where these key players set industry trends & standards, making it challenging for smaller or new entrants to compete on a large scale. The competition primarily revolves around the innovation & strategies used by key market players, shaping the direction of AI adoption in telecommunications.
Some of the prominent players in the Global Artificial Intelligence (AI) in Telecommunication Market are
- Microsoft Corp
- Intel Corp
- IBM Corp
- AT&T
- Cisco System
- Nuance Communications
- Google LLC
- Salesforce
- NVIDIA Corp
- H2O.ai
- Other Key Players
Recent Development
- In June 2023, Amdocs, a US company specializing in software and services for communication and media firms, uncovered amAIz, an advanced telco generative AI framework that combines carrier-grade architecture with open-source technology and large language AI models and provides a strong foundation for global communication service providers, empowering them to leverage the vast capabilities of generative AI.
- In February 2023, Bharti Airtel, an Indian telecommunications provider, announced a partnership with NVIDIA to create an AI solution focused on improving customer experiences in its contact centers, particularly targeting enhancements for inbound calls.
- In September 2022, Amazon Web Services (AWS) and SK Telecom collaborated to develop a new suite of computer vision services. This partnership streamlines the development, deployment, and scaling of computer vision applications, leading to increased productivity, improved equipment maintenance, and enhanced facility safety for customers, all while reducing costs.
- In November 2022, American Tower Corporation's African subsidiary partnered with PowerX to introduce AI solutions in Africa's telecommunications sector to improve energy efficiency & environmental benefits by optimizing energy use at tower sites.
- In July 2022, Actifai, a software-as-a-service provider, teamed up with CSG, a customer engagement company, to transform customer acquisition for cable and telecommunications service providers, and introduce an AI-powered offer recommendation solution, integrating Actifai's AI software to boost average revenue per user (ARPU), drive higher sales conversions, and enhance the overall customer sales and support experience.
Report Details
| Report Characteristics |
| Market Size (2024) |
USD 5.2 Bn |
| Forecast Value (2033) |
USD 131.2 Bn |
| CAGR (2024-2033) |
43.1% |
| Historical Data |
2018 – 2023 |
| Forecast Data |
2024 – 2033 |
| Base Year |
2023 |
| Estimate Year |
2024 |
| Report Coverage |
Market Revenue Estimation, Market Dynamics, Competitive Landscape, Growth Factors and etc. |
| Segments Covered |
By Component (Solutions and Services), By Deployment (Cloud and On-Premise), By Technology (NPL (Natural Language Processing), Machine Learning, and Data Analytics), By Applications (Network Security, Network Optimization, Customer Analytics, Virtual Assistance and Self Diagnostics) |
| Regional Coverage |
North America – The US and Canada; Europe – Germany, The UK, France, Russia, Spain, Italy, Benelux, Nordic, & Rest of Europe; Asia- Pacific– China, Japan, South Korea, India, ANZ, ASEAN, Rest of APAC; Latin America – Brazil, Mexico, Argentina, Colombia, Rest of Latin America; Middle East & Africa – Saudi Arabia, UAE, South Africa, Turkey, Egypt, Israel, & Rest of MEA
|
| Prominent Players |
Microsoft Corp, Intel Corp, IBM Corp, AT&T, Cisco System, Nuance Communications, Google LLC, Salesforce, NVIDIA Corp, H2O.ai and Other Key Players |
| Purchase Options |
Physio-Control Inc., Schiller, Medtronic, Abbott, Boston Scientific Corporation, Koninklijke Philips N.V., Zoll Medical Corporation, BIOTRONIK, Progetti Srl, LivaNova Plc, and Other Key Players |
Frequently Asked Questions
The Global Artificial Intelligence (AI) in Telecommunication Market is estimated to reach USD 3.6 billion in 2023, which is further expected to reach USD 131.2 billion by 2033.
North America is expected to dominate the Global Artificial Intelligence (AI) in Telecommunication Market with a share of 37.1% in 2024.
Some of the major key players in the Global Artificial Intelligence (AI) in Telecommunication Market are Microsoft Corp, Intel Corp, IBM Corp, and many others.
The market is growing at a CAGR of 43.1% percent over the forecasted period.