TLDR: A recent report highlights that a significant portion of generative AI (GenAI) projects within the telecommunications industry are dedicated to developing novel solutions for customers. This trend underscores a strategic shift towards revenue generation and enhanced customer experiences, moving beyond traditional cost-reduction efforts.
The telecommunications sector is rapidly embracing generative AI (GenAI), with a substantial majority of projects aimed at creating new solutions for customers. While the initial report indicated 66% of projects falling into this category, broader industry analysis from STL Partners in May 2025 revealed that 50% of all GenAI projects in telcos are specifically focused on product creation, marking a significant strategic pivot for operators. This focus is driven by a desire to expand revenue streams beyond mature connectivity services.
According to STL Partners, the number of GenAI projects in the telco industry has surged dramatically, increasing tenfold year-on-year and by 41% between February and May 2025. Marina Koytcheva, research director at STL Partners, noted, “Telcos remain determined to benefit from the development of GenAI. They are very keen on building new products based on GenAI, to grow their revenues beyond the mature connectivity business.”
While a significant portion of these productization efforts target enterprise clients, enabling businesses to deploy GenAI applications, there is a growing interest in consumer-facing services. Examples include offering premium GenAI tools to subscribers and developing innovative services in smart home, cybersecurity, and well-being. Earlier data from November 2024 also showed 47% of GenAI projects by telcos concentrating on enterprise solutions, such as AI-powered chatbots and GenAI-enabled infrastructure.
Beyond customer-facing innovations, GenAI is also making inroads into network management and optimization. In the three months leading up to May 2025, one in six telco GenAI implementations were in network management, reflecting an increasing supply of GenAI-powered solutions from vendors like Nokia and Amdocs.
The telecommunications industry is leading other sectors in GenAI adoption. A study conducted by Coleman Parkes and commissioned by SAS in early 2024 found that 70% of telcos are currently using GenAI, with either full implementation or testing underway. This compares to an average of 54% across other industries. Furthermore, 89% of telcos plan to invest in GenAI in the next financial year, highlighting their commitment to the technology.
This transformative shift is moving telcos from primarily using AI for cost reduction to leveraging it for revenue generation. GenAI is expected to enable highly personalized customer experiences through dynamic pricing models, tailored marketing campaigns, and value-added services. It also promises to enhance customer support by improving first-contact resolution systems with AI-powered chatbots and virtual assistants, leading to reduced operational costs and increased customer satisfaction.
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However, the rapid adoption also brings challenges. Data privacy (83%) and data security (80%) are the biggest concerns for the telco industry regarding GenAI, followed by ethical implications and in-house talent and skills. Despite these hurdles, the industry’s determination to integrate GenAI into business and network strategies is clear, aiming to enhance network performance, improve customer experience, and unlock new revenue streams in an increasingly competitive market.
