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AI transformation for U.S. telcos: The profitability race

3-MINUTE READ

January 14, 2025

U.S. communications providers are racing, like every other industry, to integrate artificial intelligence effectively. Generative AI is spurring pilots across organizations to unlock efficiencies, accelerate innovation, and enhance profitability. Our Tech Vision 2023 research showed that nearly all communications executives (99%) view AI as crucial to boosting creativity and transforming operations over the next few years.

However, in 2024 we see that only 22% of telco execs have high levels of AI adoption, including Gen AI, in network operations, customer care services and application and infrastructure operations, and only 21% have a mature strategy to educate employees on AI and to improve senior leaders’ fluency in AI concepts, technologies and applications. This raises a critical question for leaders: how do they balance immediate business ROI with longer-term growth?

Experimentation is no longer enough. Telcos must now demonstrate concrete returns on AI investments. My conversations with clients across the U.S. emphasize a new imperative: Be First.

Dan Rice / Senior Managing Director – Communications & Media, North America

Many communications service providers (CSPs) are weighed down by tech debt—legacy systems that stifle innovation and incur rising IT costs. And this is confirmed by our research which has revealed that 66% of CSPs identify tech debt as a primary concern, requiring a balanced approach: modernizing infrastructure with cloud-based platforms and creating a robust digital core.

Being First is about speed—in automation and innovation. With 5G and edge computing advancing rapidly, telcos can now create AI-powered applications that meet modern demands. Achieving this isn’t just about harnessing this technology for customers —it’s about embedding it across every operational area of the telco business itself. In fact, at Accenture we found that 91% of telco executives highlight that they have to reinvent how work is done by using AI to power the enterprise, to enhance productivity and to generate content. This sentiment underscores the urgency of committing to AI across the board.

We’ve also noticed that organizations leading in AI maturity are already seeing 2.5 times higher revenue growth and 2.4 times greater productivity improvements than their peers. These companies understand that AI success comes from making it part of every function, from customer experience to network optimization.

From Boldness to Holistic Implementation

Accenture’s AI Refinery approach is structured to support scalability, utilizing pre-built models to speed up prototyping and create adaptive virtual environments. Our research shows 25-30% of working hours in the global communications industry could be automated or augmented using generative AI, reshaping workforce efficiency.

To lead in the U.S. communications industry, telcos must adopt two critical mindsets: Be Bold and Be Holistic. Agility and upskilling are essential as 92% of telco leaders acknowledge the pivotal role of data foundations built on an accessible and democratized data foundation that breaks down functional silos, enables data as products and provides high-quality, curated and diverse inputs for AI ambitions. Our research also shows that Gen AI has the potential to enable productivity gains of 17–23% in the communications industry.

AI: The Catalyst for Telco Transformation

AI is not just a tool for incremental gains—it’s the catalyst that can propel U.S. telcos into a new era of resilience, innovation, and growth. For those ready to lead, AI is the chance to go beyond traditional operations and become pioneers in transforming customer experiences, optimizing networks, and conquering tech debt. The telcos that commit to this rapid, holistic AI journey aren’t just shaping their own futures—they’re redefining what’s possible for the entire industry. This is the time to seize, to lead, and to set the pace for what’s next in telecommunications.

WRITTEN BY

Dan Rice

Senior Managing Director – Communications & Media, North America