Artificial Intelligence in Telecommunication Market Size, Share & Trends Analysis Report By Application (Network Security, Network Optimization, Customer Analytics), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global artificial intelligence in telecommunication market size was valued at USD 679.0 million in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 38.4% from 2020 to 2027. Telecommunications is one of the fastest-growing industries that use AI in many aspects of their business, including improving customer experience and network reliability. Telecom companies use AI primarily for customer service applications. For instance, use of chatbots and virtual assistants to address a massive number of support requests for installation, maintenance, and troubleshooting. Also, virtual assistants scale and automate responses to support claims, which improves customer experience and cuts business expenses. For instance, Vodafone Ltd. experienced about 68% improvement in customer experience after introducing its chatbot, called TOBi, for handling customer queries.

Telecom companies can reduce operational costs while improving the customer experience by implementing AI and automation. Artificial intelligence has already helped the core of the telecommunication business, with machines doing human tasks, such as deciding the route traffic by reading network content. It is also helping in building the self-optimizing network, which can structure the system based on existing conditions as per the limits set by the respective designer. It supports network operations to detect issues, such as Service-Level Agreement (SLA) breaches, and diagnose the root causes.

Furthermore, growing Over-The-Top (OTT) services, such as video streaming, have transformed the dissemination and consumption of audio and video content. With more consumers turning to OTT services, consumer demand for bandwidth has grown considerably. Carrying such ever-growing traffic from OTT services leads to high operational Expenditure (OpEx) for the telecommunication industry. AI helps the telecom industry to reduce operational costs by minimizing the human intervention needed for network configuration and maintenance. Also, automation enables telecom companies to onboard customers faster while introducing new services in a shorter time.

The Telecom industry is in the middle of a transformation from the fourth generation (4G) to fifth-generation (5G) of mobile communications. 5G technology is expected to provide higher data transmission rates with ultra-low latency rates. Telecom companies are working for building such infrastructure that supports every vertical controlled by the Internet of Things (IoT). For instance, in March 2020, Google collaborated with AT&T Intellectual Property to help enterprises leverage Google Cloud’s technologies using the 5G network connectivity. Both the companies are developing 5G solutions by combining the 5G network capabilities of AT&T Intellectual Property and Google Cloud’s capabilities in analytics, AI/machine learning, and networking.

Artificial Intelligence in Telecommunication Market Trends

The AI in the telecommunication value chain consists of AI solution providers, system integrators, and end-users. Each stage of the value chain is responsible for enhancing the product. Artificial Intelligence models and frameworks require several infrastructural facilities, technology tools, and data formats to train and implement machine learning and computer vision applications. Companies such as IBM Corporation, Microsoft, and the Intel Corporation, among others, provide machine learning (neural network) tools for training on different aspects.

System integrators and infrastructure developers play a vital role in the artificial intelligence value chain. OEMs choose an appropriate system integrator with relevant knowledge, experience, and resources to provide comprehensive customer support and predictive maintenance. A service contract with manufacturers offers several benefits to application industries regarding design, integration, and delivery. Factory-trained field technicians assist in installing and working these solutions in the telecommunication industry. Manufacturers also provide value-added support, such as remote monitoring and self-diagnostics applications.

AI-enabled the telecom industry to extract actionable business insights and boost overall customer experience. Predictive maintenance, network optimization, anomaly detection, robotic process automation (RPA), and fraud detection, among others, are some of the ways in which AI has contributed to the telecom industry. For instance, in May 2021, Nokia launched AVA Telco AI as a Service, which provides cloud-based artificial intelligence solutions and allows communication service providers (CSP) to automate capacity planning, network management, and service assurance. Similarly, in June 2019, Vodafone Group released ‘TOBi,' a machine learning chatbot that enables human customer agents to focus on challenging issues.

Governments worldwide have realized the impact of 5G on digital transformation and hence are boosting 5G rollout to drive AI and automation across the telecom industry. The fifth-generation technology is likely to drive digital transformation, the Internet of Things (IoT) powered by edge computing and AI across the wireless telecom sector. Increasing demand for higher quality services and seamless customer experience is likely to drive the adoption of AI in the telecom industry. Increasing 5G deployments are likely to create lucrative business opportunities for telecom operators to provide outsourced IT services and offer process automation services powered by edge computing and AI to enterprises. Many established telecom service providers, including Charter Communications, AT &T, and Verizon, are expected to make significant investments in AI.

Application Insights

Based on application, the market has been segmented into network security, network optimization, customer analytics, virtual assistance, self-diagnostics, and others. The virtual assistance segment is expected to portray the fastest growth over the forecast period due to the fact that customer service automation creates substantial savings for telecom companies. Also, customer support chatbots in the communication industry can be trained adequately as machine learning algorithms can automate inquiries and route customers to the optimal agent.

The customer analytics segment is expected to have the highest market share owing to the growing need for real-time behavioral insights. Artificial intelligence enables operators to collect and analyze the customer’s data from a subscriber's intelligencer perspective. This information can be further utilized in several scenarios, such as advertisements and personalized offers for the subscriber. Also, this information can be used by operators to achieve network optimization with better utilization of network resources.

Regional Insights

North America accounted for the largest share in 2019 and is expected to maintain dominance throughout the forecast years as the region is one of the early adopters of advanced technologies. Moreover, a growing number of telecom companies using automation and AI for customer service and network optimization purposes will support the region’s growth. For instance, in 2018, AT&T Intellectual Property launched the mobile 5G, supported by edge AI computing in the U.S. Telecom service providers in the U.S. are leveraging CUJO LLC’s AI network security solutions to secure their networks.

Post-COVID-19 pandemic, European telecom operators are observed to be prioritizing investments in AI to make more data-informed decisions. According to a report published by European Telecommunications Network Operators’ Association (ETNO) in February 2022, Europe recorded its highest investment in 5G and Fiber to the home (FTTH) network generating a capital expenditure (Capex) of approximately 72.21 billion in 2020. Such significant investments are likely to boost artificial intelligence (AI) adoption across the European telecom industry. On the contrary, the European telecom industry is highly regulated, which in turn is likely to lead to steady market growth across the region.

On the other hand, Asia Pacific is forecast to exhibit the fastest CAGR over the forecast period. This growth is attributed to the rapid technological advancements in emerging economies, such as China and India. For instance, Huawei Technologies Co., Ltd., a global provider of telecommunications equipment and consumer electronics, cooperates with China Telecom Corporation Ltd., an internet access and mobile telecommunications services provider. This collaboration is anticipated to explore radio cell capacity prediction and wireless network cell anomaly detection based on the Network AI Engine (NAIE).

The Middle East and Africa is likely to be the potential market for telecom service providers. The region has emerged as a forerunner in advanced networking in recent years, with Qatar, Saudi Arabia, Bahrain, and the UAE deploying 5G networks. In July 2021, Middle East telecom giants Zain Group, STC Group, Etisalat Group, du, and Mobily agreed to collaborate on deploying Open Radio Access Network (Open RAN) solutions to their existing networks. Such notable strategies are likely to drive the demand for AI solutions in the telecommunication industry across the Middle East. South America is anticipated to show significant growth in the coming years. The European and U.S. markets mainly influence the South America telecom industry. 

Key Companies & Market Share Insights

The key industry participants in the market include IBM Corp.; Microsoft Corp.; Intel Corp.; Google LLC; AT&T Intellectual Property; Cisco Systems, Inc.; Nuance Communications, Inc.; Evolv Technology Solutions, Inc.; H2O.ai; Infosys Ltd.; Salesforce.com, Inc.; and NVIDIA Corp.

Vendors in the market are focusing on increasing the customer base through various strategic initiatives, such as partnerships, M&A, and collaborations. For instance, in May 2019, Vodafone Ltd. signed an outsourcing deal with IBM Corp. This partnership is anticipated to provide the former company with a hybrid cloud-based digital platform to support better customer engagement and enhance business efficiency. Some of the prominent players in the artificial intelligence in the telecommunication market include:

• IBM Corporation

• Microsoft

• Intel Corporation

• Google

• AT&T Intellectual Property

• Cisco Systems

• Nuance Communications, Inc.

• Evolv Technology Solutions, Inc.

• H2O.ai

• Infosys Limited

• Salesforce.com, Inc.

• NVIDIA Corporation

Artificial Intelligence In Telecommunication Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global Artificial Intelligence (AI) in telecommunication market report based on application and region:

• Application Outlook (Revenue, USD Million, 2016 - 2027)

  • Network Security

  • Network Optimization

  • Customer Analytics

  • Virtual Assistance

  • Self-Diagnostics

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • The U.K.

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East and Africa (MEA)