Leaders in the telecommunications sector largely agree that artificial intelligence (AI) can materially improve operational efficiency and support growth. EY-Parthenon’s biennial Telco of Tomorrow study highlights this view: 92% of surveyed telecom executives identified customer service and problem resolution as among the most important AI use cases.
Beyond customer support, the report points to AI’s potential in network optimisation, expanding service portfolios and delivering personalised customer solutions. EY experts caution, however, that AI alone will not produce better business outcomes; technology investments must be accompanied by clear business objectives, changes to operating models and workforce upskilling.
"The telecommunications sector has significant growth potential, but artificial intelligence by itself does not guarantee better business results. Clear business objectives, transformations of operating models and adequate employee preparation are needed. In Hungary too, the decisive factor will be that technology investments deliver tangible customer value and more efficient operations," said Zala Mihály, Partner for EY’s IT and technology advisory practice.
Cost, skills and strategy gaps slow adoption
The study identifies several practical barriers that are slowing broader AI adoption. Executives most often point to limited financial resources, a shortage of required skills, and difficulties in defining a clear strategic direction as key constraints.
More than two-thirds of respondents believe a substantial share of their workforce will need to acquire new skills or move into different roles. New competences will likely need to be brought into organisations as well. The sector’s attractiveness on the labour market is an additional concern: fewer than one-third of respondents expect telecommunications to be among the most attractive industries for jobseekers in five years’ time.
Accordingly, the report urges companies to combine technological upgrades with employee training and reviews of internal processes and leadership practices. Preparing the workforce for technological change and ensuring the organisation can effectively apply new solutions are essential for successful transformation.
New revenue streams: cybersecurity, cloud and AI infrastructure
Half of the surveyed executives see meaningful growth opportunities outside traditional telecommunications services — a notable increase from 34% reported in the 2024 survey. Potential new areas of business include cybersecurity solutions, local data-handling cloud services, infrastructure to support AI, and high-performance computing services.
Deep customer insight and reliable network infrastructure remain critical for future competitiveness: 64% of respondents cited in-depth customer understanding and 49% highlighted network quality as important conditions for long-term success.
"Because the market for traditional connectivity services is mature, focusing only on technology infrastructure is no longer sufficient for growth. Companies must simultaneously uncover new business opportunities and improve operational efficiency. Leaders need to decide which capabilities to build internally, where to pursue partnerships, and how to reshape their service portfolios to create new revenue streams," added Kadocsa Márton, Head of Strategy and Execution at EY-Parthenon Hungary.
Competitive landscape is shifting
Executives expect satellite service providers to play a meaningful role in reshaping the market over the next five years. At the same time, large cloud providers act both as competitors and potential strategic partners for telecom firms. As AI adoption grows, the connections between telecommunications networks, cloud services and high-performance computing infrastructures are becoming tighter.
In this evolving environment, the report concludes, long-term success will depend on a clear strategy, building new collaborations and continuous organisational renewal.
Conclusion
EY-Parthenon’s Telco of Tomorrow study finds that AI offers substantial potential for the telecommunications industry—especially in customer service, network optimisation and new services—but adoption is hindered by budgetary constraints, skills shortages and a lack of strategic clarity. Addressing these obstacles will require reskilling, operational transformation and coordinated strategic decisions to capture the benefits of AI and unlock new revenue streams.
