Telcos are among the biggest early adopters of AI – but the level of investment is still very low and they are uncertain to measure it.

Those are some of the findings of recent surveys into AI adoption. The latest, an Nvidia-sponsored study of 400 telecom professionals, finds that virtually every telco is already engaged with AI in some way, although mostly at an early stage.

The biggest expectations are for AI to optimize operations (60%), lower costs (44%) and enhance customer engagement (35%), respondents said, citing use cases ranging from cellsite planning and truck-route optimization to recommendation engines.

Figure 1: Telcos are hoping to cut costs and optimize operations with AI.
(Source: Pitinan Piyavatin/Alamy Stock Photo)

Just over a third said they had been using AI for more than six months. Of the rest, 31% said they're still weighing different options, 18% reported being still in a trial phase and only 5% said they had no AI plans at all. Most industry execs say they see AI technologies will positively impact their business – 65% agreed AI was important to their company's success, and 59% said it would become a source of competitive advantage.

Measuring ROI is the biggest challenge

However, they said one of the biggest problems was measuring AI's impact. The inability to quantify the ROI ranked as the biggest challenge, cited by 44%, followed by a lack of data scientists, nominated by 34%.

That said, survey respondents managed to come up with estimates on the financial impact so far. Nearly 80% said it had helped reduce costs, with 15% saying it had cut costs by more than 10%. Almost as many – 73% – said it had increased revenue.

But these financial impacts are coming off a low base. Operators are spending a fraction of their capex budgets on AI projects – last year half said they spent less than $1 million on AI. At the top end, 2% spent more than $50 million in 2021, with that number rising to 3% in 2022.

The latest AI Index compiled by Stanford University puts telcos at the forefront of AI deployment. Using its own data and that from a McKinsey study, it found that the highest level of AI adoption is in product or service development by hi-tech companies and telcos (45%), followed by AI in service operations (45%).

The biggest single application in any industry was natural language text understanding deployed by 34% of hi-tech and telco firms, with 28% implementing AI-based computer vision and 25% using virtual agents.

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— Robert Clark, Contributing Editor, special to Light Reading