Artificial intelligence and autonomous networks are emerging as the focal point for revenue generation in the telecom sector, according to research unveiled ahead of MWC2026. The analysis draws on operational insights from major carriers including Airtel, Orange, Singtel, SK Telecom, Telefónica, Verizon, and Virgin Media O2.

Marina Koytcheva, Research Director at STL Partners, highlights a critical tension: "investors are less lenient with telcos financing big ambitious changes, compared to Big Tech giants or hyperscalers." She warns that if telecom firms face the same return-on-investment pressures that have constrained them over the past 15 years, they risk missing transformative opportunities.

The sector's competitive disadvantage stems partly from structural constraints. Telcos have historically struggled to pivot quickly due to entrenched legacy systems and operations. Yet virtualisation trends—driven by software-defined networking and cloud infrastructure—are beginning to unlock greater flexibility. When combined with AI capabilities, this foundation could enable near-instantaneous operational adaptation.

The hyperscaler spending surge and echoes of past bubbles

The financial dynamics between tech giants and telecom operators have shifted dramatically. According to Sebastian Barros, hyperscaler capital expenditure has ballooned from $24 billion in 2015 to a projected $325 billion in 2025—a 13-fold jump in a single decade. By contrast, global telecom capital spending stood at an estimated $297 billion in 2024, representing a 5% year-on-year contraction.

This reversal carries historical weight. John Mihaljevic of MOI GLOBAL, an investor community, observes that "by ramping up AI-related capital spending to unprecedented levels, [hyperscalers] have set themselves on a perilous path, away from high-margin, capital-light models toward a capital-intensive future in which their return-on-capital and margin profiles are highly uncertain."

Mihaljevic draws a parallel to the telecom industry's own past: "This AI-driven capex frenzy is eerily similar to the telecom bubble of the late 1990s and early 2000s. Extravagant spending on fiber optics and network infrastructure promised growth but delivered catastrophic oversupply and collapsing prices. Today's hyperscalers may be repeating history's costly mistakes."

Zero-touch operations and the RAN frontier

Juniper Research forecasts that operator investment in AI will surpass $86 billion by 2029, fuelled primarily by ambitions to achieve zero-touch operations—network management with minimal or no human involvement. The projection hinges on widespread adoption of agentic AI, a nascent but rapidly advancing technology that carriers are actively pursuing.

The radio access network (RAN) represents the highest-value deployment target. In February 2025, Deutsche Telekom and Google Cloud unveiled a partnership centred on RAN Guardian, an AI agent constructed using Gemini 2.0 within Google Cloud's Vertex AI platform. The system monitors network behaviour, identifies performance degradation, and executes remedial measures autonomously—reducing operational overhead, cutting costs, and enhancing customer-facing reliability and speed.

Abdu Mudesir, Group CTO at Deutsche Telekom, framed the initiative as essential: "Traditional network management approaches are no longer sufficient to meet the demands of 5G and beyond. We are pioneering AI agents for networks, working with key partners like Google Cloud to unlock a new level of intelligence and automation in RAN operations as a step towards autonomous, self-healing networks."

AI RAN and monetisation pathways

Larbi Belkhit, a telecoms analyst at ABI Research's Strategic Technologies group, identifies 'AI RAN' as the linchpin for automating radio access infrastructure in the 5G era. This capability will shape how mobile operators oversee, roll out, and monetise their networks going forward. RAN automation proves essential for orchestrating network slices end-to-end and enforcing service-level agreements (SLAs).

AI RAN unlocks several revenue-generating scenarios:

  • Automated SLA management with dynamic metric adjustment
  • Quality of experience (QoE) monitoring and optimisation using predictive analytics
  • Assurance mechanisms for RAN slices and SLA compliance
  • Fast-loop optimisation to meet SLA targets
  • Slice-aware admission control that prioritises access for specific user categories

Belkhit cautions that meaningful deployment ramp-up is unlikely before 2029. To accelerate broader adoption, the telecom industry must pursue four parallel tracks: standardising interfaces for multi-agent coordination; partnering with hyperscalers such as Amazon Web Services and Google Cloud; maturing data strategies to enable finer granularity and contextual awareness; and developing more transparent, explainable large language models.

The case for pragmatism over sweeping automation

While zero-touch networks represent an aspirational end-state, comprehensive automation across all network domains may prove neither realistic nor financially defensible. A TM Forum regional benchmark released in summer 2025 underscores this reality: only 4% of communication service providers have attained TM Forum's Level 4 autonomy standard to date, with just 23% projecting achievement by 2026.

Industry thinking has shifted toward a more selective, phased strategy. Rather than pursuing blanket, end-to-end transformation, operators are identifying specific 'high-value scenarios' for targeted automation. This reflects growing recognition that distinct network segments warrant different autonomy levels—and corresponding investment commitments.

Case studies within the broader research illustrate this diversity. Verizon frames agentic AI as an extension of its productivity and efficiency agenda. Virgin Media O2 is positioning network automation and AI to extract fresh value from existing capabilities, enabling customised network experiences and tailored services. Orange has already begun monetising its operational AI investments, with further innovations in advanced services on the horizon.

Source: Mobile Europe