The AI in Telecommunication Market is projected to grow from USD 1.54759 Billion in 2024 to USD 15.78 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 33.68% during the forecast period (2024 - 2032). Additionally, the market size for AI in Telecommunication was valued at USD 1.21 billion in 2023.
Growing Over-The-Top (OTT) services, such as video streaming, have transformed the distribution and consumption of audio and video content and are the key market drivers enhancing market growth.
Figure 1: AI in Telecommunication Market Size, 2018-2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
AI in the telecom value chain consists of AI solution providers, system integrators, and end users. Each stage of the value chain is responsible for enhancing the product. AI models and frameworks require multiple infrastructures, technical tools, and data formats to train and implement machine learning and computer vision applications. Companies such as IBM, Microsoft, and Intel provide machine learning (neural network) tools for different aspects of training.
System integrators and infrastructure developers are vital in the AI value chain. OEMs select the right system integrator with the knowledge, experience, and resources to provide comprehensive customer support and predictive maintenance. A service contract with a manufacturer offers several benefits to the application industry regarding design, integration, and delivery. Factory-trained field technicians assist in installing and using these solutions in the telecommunications industry. Manufacturers also offer value-added support, such as remote monitoring and self-diagnostic applications.
Artificial intelligence enables the telecom industry to extract actionable business insights and enhance customer experience. AI can contribute to the telecom industry through predictive maintenance, network optimization, anomaly detection, robotic process automation (RPA), and fraud detection. For example, in May 2021, Nokia launched AVA Telco AI-as-a-Service, which provides cloud-based artificial intelligence solutions and allows communications service providers (CSPs) to automate capacity planning, network management, and service assurance. Similarly, in June 2019, Vodafone Group released "TOBi," a machine-learning chatbot that allows human agents to focus on challenging issues.
Governments worldwide have recognized the impact of 5G on digital transformation and are promoting the rollout of 5G to drive artificial intelligence and automation across the telecom industry. Fifth-generation technologies will likely drive digital transformation across wireless telecommunications, the Internet of Things (IoT) driven by edge computing, and artificial intelligence. Rising demand for higher quality services and seamless customer experience will likely drive the adoption of artificial intelligence in the telecom industry. Increased 5G deployment could create lucrative business opportunities for telecom operators to provide outsourced IT services and offer process automation services to enterprises powered by edge computing and artificial intelligence. Many established telecommunications service providers, including Charter Communications, AT&T, and Verizon, are expected to invest heavily in AI. These are essential factors driving the AI in Telecommunication market revenue growth.
Based on Components, the AI in Telecommunication Market segmentation includes Solutions and Services. The services segment held the majority share in 2022, contributing most of the AI in Telecommunication Market revenue. The service segment is projected to grow fastest as telecom companies are increasingly aware of the advantages and features of AI technology in the telecom industry. Moreover, the growing adoption of artificial intelligence in various applications in the telecom industry is driving the growth of the services segment.
The Deployment has bifurcated the AI in Telecommunication Market data into Cloud and On-Premises. On-Premises has a considerable market share and is expected to maintain its dominance during the forecast period. This is because it provides additional data security. However, the cloud segment is expected to register the highest CAGR of 43.8% from 2022 to 2031, as the cloud provides flexibility, scalability, complete visibility, and efficiency to all processes.
Figure 2: AI in Telecommunication Market by Application, 2022 - 2032 (USD billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The global AI in Telecommunication industry has been segmented based on ML&DL and NLP. NLP accounts for the largest share of the AI in Telecommunication market owing to the utilization of NLP technology to read information stored in digital format and used to understand human speech from various languages, A dataset for the growing telecom industry.
Based on Application, the global AI in Telecommunication industry has been segmented into traffic classification, predictive maintenance, and anomaly detection. The traffic classification is expected to contribute to a higher market share. The customer analytics category will likely hold the largest market share due to the increasing demand for real-time behavioral insights. AI enables operators to collect and evaluate consumer data from the consumer's point of view. Subscriber Intelligence This information is used in various contexts, including serving advertisements and personalized offers to subscribers. Network operators can also use this information to optimize network consumption.
By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American AI in Telecommunication market, which accounted for USD 0.4 billion in 2022, is expected to exhibit a significant CAGR growth during the study period due to the presence of a large number of significant players offering AI-enabled solutions for the telecom industry, such as IBM Corporation, Microsoft Corporation, and Cisco Systems.
Further, the significant countries studied in the market report are The U.S., Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: AI IN TELECOMMUNICATION MARKET SHARE BY REGION 2022 (%)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Europe's AI in Telecommunication market accounts for the second-largest market share. It has been observed that European telecom operators are prioritizing investments in artificial intelligence to make more data-based decisions. According to a report published by the European Telecommunications Network Operators Association (ETNO) in February 2022, European investment in 5G and fiber-to-the-home (FTTH) networks is at a record high, with capital expenditure of approximately 722.1 in 2020 One hundred million U.S. dollars. Significant investments will likely boost the adoption of artificial intelligence (AI) across the European telecommunications industry.
On the contrary, the European telecommunications industry is highly regulated, likely leading to steady market growth across the Region. Further, German AI in Telecommunication held the largest market share, and the U.K. AI in Telecommunication market was the fastest-growing market in the European Region.
The Asia-Pacific AI in Telecommunication Market is expected to grow at the fastest CAGR from 2022 to 2030. This growth is attributed to rapid technological advancements in emerging economies such as China and India. For example, Huawei Technologies Co Ltd, a global supplier of telecommunications equipment and consumer electronics, has partnered with China Telecom, a provider of internet access and mobile telecommunications services. The collaboration will explore network artificial intelligence engine (NAIE)-based radio cell capacity prediction and wireless network cell anomaly detection. Moreover, China's AI in Telecommunication held the largest market share, and Indian AI in Telecommunication was the fastest-growing market in the Asia-Pacific region.
Major market players are spending a lot on R&D to increase their Component lines, which will help the AI in Telecommunication market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new Component launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the AI in Telecommunication industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.
Manufacturing locally to reduce operating costs is one of the primary business strategies manufacturers adopt in the global AI in Telecommunication industry to benefit clients and expand the market sector. AI in the telecommunication industry has provided medicine with some of the most significant benefits in recent years. In the AI in telecommunications markets, major players such as Huawei Technologies Co. Ltd (China), IBM Corporation (US), Microsoft Corporation (US), Intel Corporation (US), and others are working on expanding the market demand by investing in research and development activities.
International Business Machines Corporation (IBM), nicknamed Big Blue, is an American multinational technology corporation headquartered in Armonk, New York, with operations in over 175 countries. It focuses on computer hardware, middleware, and software and provides hosting and consulting services in areas ranging from mainframe computing to nanotechnology. IBM is the world's largest industrial research institution, with 19 research institutions in more than a dozen countries, and has held the record for the most annual U.S. patents by an enterprise for 29 consecutive years from 1993 to 2021.
Also, Microsoft Corporation is an American multinational technology company headquartered in Redmond, Washington, USA. Microsoft is best known for its software products, the Windows family of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are the Xbox video game console and the Microsoft Surface line of touchscreen personal computers. Microsoft ranks 21st in the 2020 Fortune 500 by total U.S. revenue; as of 2019, it is the world's largest software maker by revenue. It is among the five most significant information technology companies in the United States, along with Alphabet (Google), Amazon, Apple, and Meta.
A major change in the potential functionality of smartphones was signaled in February 2024 when Deutsche Telekom presented a novel smartphone prototype at the Mobile World Congress in Barcelona. Powered only by artificial intelligence (AI), the device shunned conventional apps and standard smartphone features. The traditional model of app ecosystems that predominate on modern devices, like iOS or Android, is broken by this app-less architecture.
With a vision where AI not only complements but completely replaces conventional apps, this idea from Deutsche Telekom pushes the boundaries of what smartphones could be capable of and offers a more seamless, effective, and possibly less invasive way to use technology. It implies that the future of smartphones could not be about more apps but rather about more intelligent, user-friendly gadgets that are customized to meet the demands of each unique user.
An important first step in using artificial intelligence (AI) to revolutionize the telecom sector was Rakuten's collaboration with OpenAI in February 2024. Rakuten sought to improve the effectiveness and performance of telecommunications networks by incorporating OpenAI's cutting-edge AI models and technology into its platform.
Rakuten's software can continuously monitor the network and detect problems and anomalies in real-time by utilizing OpenAI's deep learning capabilities. Faster resolution is made possible by these AI-driven solutions' ability to identify the underlying reasons of service outages or performance deterioration. For high-priority services or mission-critical apps, in particular, real-time problem identification is essential to reducing the impact on end users.
Amdocs amAIz, a telco generative AI platform, was unveiled in June 2023 by Amdocs, an American software and services provider to media and communications companies. This innovative method blends carrier-grade architecture, open-source technology, and massive language AI models. International telecom service providers now have a solid foundation upon which to build to fully realize the immense potential of generative AI thanks to Amdocs amAIz.
| Report Attribute/Metric | Details |
| Market Size 2023 | USD 1.21 Billion |
| Market Size 2024 | USD 1.54759 Billion |
| Market Size 2032 | USD 15.78 Billion |
| Compound Annual Growth Rate (CAGR) | 33.68% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019 - 2021 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Component, Deployment, Technology, Application, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | Huawei Technologies Co. Ltd (China), IBM Corporation (US), Microsoft Corporation (US), Intel Corporation (US), Cisco Systems (US), Nuance Communication (US), ZTE Corporation (China), H2O.ai (US), Salesforce (US), Infosys Limited (India), Google LLC (US). |
| Key Market Opportunities | Utilization of AI-Enabled Smartphones. |
| Key Market Dynamics | Increasing adoption of AI for various applications in the telecommunication Industry. AI can be the key to self-driving telecommunication networks. |
AI in Telecommunication Market Highlights:
Frequently Asked Questions (FAQ) :
The AI in Telecommunication Market size was valued at USD 1.21 Billion in 2023.
The global market is projected to grow at a CAGR of 33.68% from 2024-2032.
North America had the largest share of the global market.
The key players in the market are Huawei Technologies Co. Ltd (China), IBM Corporation (US), Microsoft Corporation (US), and Intel Corporation (US)
The services category dominated the market in 2022.
On-premises had the largest share of the global market.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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