The state of AI adoption in telecommunications and the road ahead
A TCS research report on telecom’s primary AI battlegrounds, adoption approaches, risks, and the way forward.
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Artificial intelligence has reached a critical transition point in the telecom industry. As operators move beyond experimentation, AI is increasingly being deployed at enterprise scale to modernize networks, transform customer experience, and strengthen core operations.
This TCS research is based on a global survey of 300 telecom executives, complemented by in-depth interviews across North America, Europe, APAC, and MEA. The study examines how telecom operators are adopting AI, where value is being realized today, and what is shaping the pace and form of AI deployment at scale.
The report explores key questions, including:
- Where are telecom operators investing most as AI moves from pilots to enterprise-wide deployment?
- Which functions – networks, operations, customer experience, or IT – are seeing the highest AI impact?
- How are generative AI and emerging agentic AI capabilities changing operating models?
- What are the biggest barriers to scaling AI – data quality, legacy systems, skills, or governance?
- How are telcos balancing innovation with risk, compliance, and control through hybrid AI models?
- What role do partners and ecosystems play in enabling scalable, outcome-driven AI adoption?
The findings highlight a decisive shift towards infrastructure-led AI investments, hybrid operating models, and outcome-focused partnerships, while also underscoring the constraints posed by legacy integration, skills shortages, and governance complexity.
Core findings from the study:
- 19% of telcos are in the AI pilot phase, 17% remain in exploration, while a considerable number of them are in the process of scaling deployments.
- Network & operations is the leading AI adoption area in Telecom, followed by customer experience (CX).
- 55% of telcos are exploring potential use cases of agentic AI, resulting in broad early traction for the technology.
- 73% of respondents cite modernizing legacy systems as a key focus for AI use within the IT function.
This report presents a snapshot of the current state of AI adoption in the telecom industry and highlights the strategies, investments, and operating models shaping the next phase of transformation.
Swipe LeftSwipe RightTelecom operators are no longer debating whether to invest in AI, they are focused on where it delivers the fastest and most measurable impact. Our research shows that large telecom companies are planning to allocate up to 20% of their IT budgets over the next year to AI initiatives, making the priority clear: modernize networks, enable agentic customer service, and build the data foundations needed for sustained returns.
Akhilesh Tiwari
President, Communications, Media and Information Services, TCS
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