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The artificial intelligence market in the telecommunication industry market size is estimated to grow at a CAGR of 45.88% between 2022 and 2027. The market size is forecast to increase by USD 12,596.05 million. The growth of the market depends on several factors, including the increasing demand for autonomous-driven network solutions, the increasing use of AI for efficient predictive maintenance, and the rising use of AI for enhancing customer experience. AI is a field of computer science that develops smart machines that can think and learn like humans. It is embedded within telecommunication devices such as mobile towers, which enable enterprises to maintain them properly. It also helps telecommunication enterprises in network optimization for enhanced customer experience. The scope of the global AI market in the telecommunication industry includes AI solutions and services provided to the telecommunication industry by vendors in North America, Europe, APAC, South America, and the MEA
This artificial intelligence market in the telecommunication industry report extensively covers market segmentation by component (solutions and services), deployment (on-premises and cloud), and geography (North America, Europe, APAC, South America, The Middle East, and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing demand for autonomous-driven network solutions is driving growth in the artificial intelligence market. OPEXAs networks have expanded, the operational expenditure has gone up in lockstep. Over the past ten years, mobile operators' OPEX has constantly outpaced revenue growth and this poses a major challenge to their business. Telecom networks also confront significant issues in monitoring user experience. 58% of problems with residential broadband are only discovered after a complaint is filed.
However, unlike the autonomous car sector, the communication industry is fraught with complications. Autonomous driving operating settings and road conditions include highways of data centers and urban and rural roadways that offer residents broadband access. Accordingly, in heterogeneous environments where there are a number of technologies, ADIs have to adapt. Increasing demand for autonomous-driven network solutions is expected to drive the global artificial intelligence market in the telecommunication industry during the forecast period.
The growing investments in the 5G network is a primary trend in the artificial intelligence market in the telecommunication industry. The latest mobile wireless technologies are 5G, which is an upgraded version of previous 4G networks. This technology enhances download speeds, enables networks to connect to various devices, and improves response times. Countries that are adopting this technology at the earliest are expected to have broader macroeconomic benefits, all such factors drive the growth of the artificial intelligence market in the telecommunication industry during the forecast period. Thus, it is encouraging various enterprises to invest in this technology.
Moreover, AI is expected to help 5G providers to optimize their investments, improve operation and maintenance efficiency, and reduce costs during the forecast period. It is expected that during the forecast period, they will be able to include precision 5G network planning, coverage auto-optimization, capacity expansion forecasts, and dynamically scheduled cloud resources for their networks. Thus, with the increase in investments in the 5G network, the market for AI is also expected to grow in the telecommunication industry. Therefore, the growing investments in the 5G network will drive the growth of the global artificial intelligence market in the telecommunications industry during the forecast period.
The poor availability of a skilled workforce and the high cost of implementing AI is a major challenge in an artificial intelligence market in the telecommunication industry. The lack of technical expertise among employees is a key challenge for the development of artificial intelligence in telecommunications. Enterprises implementing AI must have sound knowledge of working with AI software platforms and periodic servicing necessities to ensure smooth operations. The lack of technical knowledge can impact the demand for AI in the telecommunication industry. Lack of skilled operators and adequate education have led to some delays in implementing large-scale automation, due to the fact that significant time, training, or financial resources must be allocated for the successful implementation of AI within the telecommunications sector.
However, a lot of hardware investments, such as sensors and software, are needed to develop AI. The repair and maintenance costs are also a cost for enterprises, not to mention set-up costs. Enterprises using AI in their business operations should also be able to proceed or recover lost codes and reinstate the system, which is expected to again lead to huge time and cost, as they must invest resources to maintain AI. The scope of artificial intelligence in the telecommunication sector is limited by a lack of qualified experts, as well as higher implementation costs. Therefore, the poor availability of skilled workforce and the high cost of implementing AI can be a challenge that hinders the growth of the global artificial intelligence market in the telecommunication industry during the forecast period.
The market share growth by the solution segment will be significant during the forecast period. The solutions segment includes software tools and platforms such as development tools and data collection platforms. An AI platform is defined as an infrastructure that shall be placed on company premises. It also offers AI applications that use expert systems such as machine vision and speech recognition.
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The solutions segment showed a gradual increase in the market share of USD 301.96 million in 2017 and continued to grow by 2021. AI platforms help to automate manual processes and deliver better results when compared with the manual process. However, it is important for companies that choose artificial intelligence platforms to be able to access them easily and not require further skills in their operations.
AI services in the telecommunication industry are expected to experience high growth during the forecast period. Professional services and managed services provided by the vendor on the worldwide market in artificial intelligence for telecommunications can be attributed to the exponential growth of this service segment. The demand for low-cost IT solutions is increasing at an exponential rate due to tighter IT budgets for enterprises in the telecommunication industry.
Based on deployment, the market has been segmented into On-premises and cloud. The On-premises segment will account for the largest share of this segment. On-premises AI-based software technology is a highly secure software that is managed and maintained by enterprises and they contain complete control over their on-premises solutions due to the monitored and restricted access. An on-premise phone system is a telecommunications solution that consists of physical installation and is fully operational at the place of establishment, e.g. call centers, businesses, or organizations. It also says that an on-premise phone system is important in places where there is a requirement for a high level of security and control over the telecommunications infrastructure.
Cloud computing is a software-defined infrastructure that allows the telecommunication industry to store and process data remotely. Cloud communication solutions can expand business services immediately and react to the surge in changes. Cloud computing for telecommunication is a key driver of telecommunication digital transformation. The cloud platform offers a technology that covers the entire lifecycle of Artificial Intelligence and helps to build features and models as well as tools for operational monitoring and sharing worldwide.
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North America is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
There is intense competition among enterprises in the telecommunication industry across North America to have a stronghold on consumers and gain market share. The growing number of technologies, such as AI, in the region, is encouraging various telecommunication enterprises. The use of AI by these enterprises is expected to enable them to improve their processes in customer service during the forecast period.
In 2020, North America was severely affected by the COVID-19 pandemic, which led to the imposition of lockdowns. However, the initiation of large-scale vaccination drives by the government in the region in the first half of 2021, helped to stabilize the situation. In this way, demand for AI in telecommunications has increased as all of the business units have been set up. And in addition, a policy of working from home for staff working on remote systems has been implemented by the vast majority of companies. This led to increased demand for high-speed Internet connections, which boosted the demand for telecommunication services. All factors are expected to drive the growth of the artificial intelligence market in the telecommunication industry in the region during the forecast period.
The Artificial Intelligence Market in the Telecommunication Industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Artificial Intelligence Market in the Telecommunication Industry Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Advanced Micro Devices Inc. - The company offers artificial intelligence such as AMD Instinct.
Alphabet Inc. The company offers artificial intelligence solutions under the brand Google LLC.
Amazon.com Inc. The company offers artificial intelligence such as AWS AI.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The artificial intelligence market in the telecommunication industry report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Artificial Intelligence Market In The Telecommunication Industry Scope |
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Report Coverage |
Details |
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Page number |
174 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 45.88% |
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Market growth 2023-2027 |
USD 12,596.05 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
45.0 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 40% |
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Key countries |
US, Canada, China, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Advanced Micro Devices Inc., Alphabet Inc., Amazon.com Inc., Apple Inc., Baidu Inc., CognitiveScale, DataDirect Networks Inc., Graphcore Ltd., H2O.ai Inc., Huawei Technologies Co. Ltd., Intel Corp., International Business Machines Corp., Kyndryl Inc., Microsoft Corp., NVIDIA Corp., Oracle Corp., Qualcomm Inc., Telefonaktiebolaget LM Ericsson, Tesla Inc., and Wipro Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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