Artificial Intelligence (AI) in Telecommunication Market | 2023-2028

Market Insights

"The Global Artificial Intelligence (AI) in Telecommunication Market is estimated to grow from USD 1.79 billion in 2022 and is likely to grow at a CAGR of 19.3% during 2023-2028 to reach USD 11.7 billion by 2028".

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Market Dynamics

Introduction

AI in Telecommunication refers to the integration of artificial intelligence technology in the telecommunication industry to improve efficiency, performance, and customer experience. The use of AI in telecommunication can be applied in a wide range of areas, including network optimization, predictive maintenance, customer service, and marketing. AI can be used to analyze large volumes of data generated by telecommunication networks to optimize performance and improve reliability.

For instance, AI can be used to predict network outages and perform proactive maintenance to minimize downtime. In customer service, AI-powered chatbots can be used to provide quick and personalized responses to customer queries, improving the overall customer experience. AI can also be used in marketing to analyze customer behavior and preferences to create targeted marketing campaigns.

Additionally, AI can be used to enhance security by detecting and preventing fraud, and by monitoring network traffic for potential security threats.

Market Drivers

The Artificial Intelligence (AI) in telecommunication market is driven by a host of factors, some of which are noted below:

• Increasing adoption of AI solutions across various telecom applications. This growth is being driven by the growing number of AI-enabled smartphones which offer features like image recognition, voice recognition, and robust security, among others, compared to traditional phones.
• AI provides a simpler and easier interface for complex telecom services or processes. Additionally, the popularity of Over-The-Top (OTT) services, such as video streaming, has led to a significant increase in consumer demand for bandwidth. The telecom industry faces high operational expenditure (OpEx) due to the ever-increasing traffic from OTT services.
• AI can help to reduce these costs by minimizing the need for human intervention in network configuration and maintenance.
• A significant challenge for the AI in telecom market is the incompatibility between telecommunication systems and AI technology. On the other hand, the market is expected to experience growth opportunities with the increasing adoption of AI-enabled smartphones in the telecom industry and the emergence of 5G technology in smartphones.
• Advancements like 5G technology in mobile devices and the need to monitor content on the telecom network to eliminate human error.

For example, the Chinese government is striving to improve its network and telecom services, leading to the establishment of a new 5G base station by China Telecom Corporation in Lanzhou city. These developments are expected to create several opportunities for the expansion of the AI in telecommunication market during the forecast period.

Increasing adoption of AI solutions for various telecom applications

The use of artificial intelligence in the telecom market is gaining popularity as telecom companies prioritize network maintenance. A network failure not only exposes the company's lack of integrity and disregard for its customers but also results in financial losses. To address this, AI is being employed to rapidly pinpoint network problems.

Finding the source of the issue is the most time-consuming aspect of network maintenance, but this has become more manageable with the availability of AI. Additionally, telecom companies are leveraging IoT, further driving the adoption of AI in telecom. The growing use of AI solutions in various telecom applications is thus driving the growth of the market.

Introduction of 5G technology

The telecom industry is currently transitioning from the fourth generation (4G) to the fifth generation (5G) of mobile communications. With 5G technology, higher data transmission rates and ultra-low latency rates are expected. Additionally, telecom companies are working to build infrastructure that supports every vertical controlled by the Internet of Things (IoT).

For example, in March 2020, Google partnered with AT&T Intellectual Property to help enterprises leverage Google Cloud's technologies using 5G network connectivity. The two companies are developing 5G solutions that combine AT&T Intellectual Property's 5G network capabilities with Google Cloud's capabilities in analytics, AI/machine learning, and networking. These factors are expected to provide significant and lucrative opportunities for the growth of the market.

Incompatibility between AI technology and telecommunication systems

The growth of AI in the telecom market during the forecast period is being inhibited by concerns related to incompatibility, the unreliability of AI algorithms, a lack of skilled workforce, and difficulties in protecting confidential and private information. Incompatibility concerns are a significant obstacle to global AI in telecom market growth, as the integration of AI into telecom solutions can generate complexities.

Compatibility challenges are primarily due to a lack of standards and protocols in AI technologies and the telecom sector. These concerns are the major limiting factors for the growth of the market.

Recent Development 

In February 2023, Google launched three new telecom products to help communication service providers digitally upgrade their networks with hybrid-cloud principles and unlock new revenue opportunities.

In October 2022, AT&T announced the launching of dozens of 5G edge zones across the US to deliver next-generation network services and enable startups to innovate on the new and faster cellular network.

Segment Analysis

Component Trends

"Solution segment was the dominant factor in the market in 2022"

The solution segment was the dominant factor in the market in 2022 and is anticipated to maintain its dominance during the forecast period, based on its components. This is due to the intricate communication requirements of many large corporations that require tailored networking solutions.

Nevertheless, the services segment is expected to experience the highest growth, as there is an increasing demand for professional and managed services to address the demands of AI in the telecom sector, which is expected to further propel the growth of the industry.

Deployment Model Trends

"Cloud deployment model is dominating the market during the forecast"

The cloud deployment model is dominating the market, owing to its numerous benefits such as scalability, flexibility, and cost-effectiveness. With the increasing amount of data generated in the telecommunication industry, cloud deployment enables seamless data management, storage, and analysis, thereby facilitating faster and more accurate decision-making.

Furthermore, the cloud deployment model provides easy access to AI tools and resources, enabling telecommunication companies to incorporate AI solutions into their operations without incurring significant infrastructure costs. As a result, the cloud deployment model is expected to maintain its dominance in the market in the coming years.

Regional Analysis

"North America held the largest share of the market in 2022"

North America held the largest share of the market in 2022 and is projected to maintain its dominance throughout the forecast period. This is attributed to the region's evolving technology and communication sector, which is expected to propel the demand for AI in telecommunication within North America. However, significant growth is expected in the Asia-Pacific region during the forecast period, due to the region's expanding digital capabilities and fiercely competitive market, which is anticipated to boost the growth of the market in the region in the upcoming years.

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Research Methodology

This strategic assessment report, from Stratview Research, provides a comprehensive analysis that reflects today’s artificial intelligence (AI) in telecommunication market realities and future market possibilities for the forecast period. The report segments and analyzes the market in the most detailed manner to provide a panoramic view of the market. The vital data/information provided in the report can play a crucial role for market participants as well as investors in the identification of the low-hanging fruits available in the market as well as to formulate growth strategies to expedite their growth process.

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools. More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data. We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Features

This report provides market intelligence most totally. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision-making for the existing market players as well as those willing to enter the market.

What Deliverables Will You Get in this Report?

Segmentation

This report studies the market covering a period of 12 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The market is segmented into the following categories. 

By Component Type 

• Solution
• Service

By Deployment Model 

• On-Premise
• Cloud

By Technology Type 

• Machine Learning
• Natural Language Processing (NLP)
• Data Analytics

By Application Type 

• Customer Analytics
• Network Security
• Network Optimization
• Self-Diagnostics
• Virtual Assistance

By Region

• North America (Country Analysis: The USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, The UK, Russia, and the Rest of Europe)
• Asia-Pacific (Country Analysis: China, India, Australia, South Korea, and the Rest of Asia-Pacific)
• Rest of the World (Country Analysis: Saudi Arabia, Brazil, and Others)

Key Players

The following are the key players in Global Artificial Intelligence (AI) in Telecommunication Market (arranged alphabetically)

• AT&T
• Cisco Systems, Inc.
• Google LLC
• Intel Corporation
• Infosys Limited
• IBM Corporation
• Nuance Communications, Inc.
• Microsoft
• Salesforce, Inc.
• ZTE Corporation

Note: The above list does not necessarily include all the top players in the market.

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Customization Options

Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances

Custom Research: Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry at sales@stratviewresearch.com.