By Wojchiech Bajda, Managing Director – Public Sector Middle East, Africa, and Turkey at AWS
The telecom industry is at a pivotal crossroads. While operators are investing heavily to meet growing demands for connectivity and innovation, returns have struggled to keep pace. Indeed, a 2023 report indicated that operators had invested around $1 trillion over the previous five years to achieve just 0.9% growth. Clearly, operators need smarter, faster ways to maximise their investments and deliver meaningful growth.
Enter artificial intelligence (AI) and cloud computing: transformative technologies that enable telecom operators to launch innovative new services with unprecedented speed and enhance customer experiences, while also reducing costs. By leveraging these tools, telcos can position themselves for sustainable growth in a competitive and rapidly evolving market.
Generative AI (GenAI) in particular represents a significant opportunity for the telecom industry, offering benefits across operations, customer service, and revenue growth. McKinsey projects that GenAI alone could unlock nearly $100 billion in incremental value for telecom operators, alongside an estimated $140-180 billion in productivity gains over traditional AI. Operators leading in GenAI adoption stand to regain growth faster and capture a larger share of this potential.
Personalised customer experiences drive revenue growth
Today’s telecom customers expect more than just connectivity. They want services that cater to their individual needs. With AI, operators can analyse customer data and behaviours to create tailored service bundles that drive satisfaction and unlock revenue opportunities. The payoff? Bain & Company research shows consumers spend more (38% on average) when their experience is hyper-personalised. Accordingly, those companies that get experience right also see higher Net Promoter Scores, conversion rates, and return on investment (ROI).
Operational efficiency through AI-powered automation
Efficiency is the backbone of profitability for telecom operators. AI-powered automation, combined with cloud-based infrastructure, allows telcos to streamline network operations, reduce operational costs, and focus resources on growth opportunities. Omdia estimates that shifting to the cloud can reduce a telecom operator’s operating expenses as a percentage of revenue by more than 10%.
Operational efficiency that is secure and scalable was central to AWS and e& – the UAE-based global telco giant which serves more than 175 million subscribers in 34 countries – forging a US$1 billion-plus agreement in 2024 to accelerate cloud adoption and digital transformation across the Middle East.
The collaboration combines AWS’s cloud infrastructure and AI solutions with e&’s network capabilities to serve public sector and regulated industries, including healthcare, finance, and oil & gas. Delivering core cloud services, AI, and machine learning, the alliance enables e& to modernize platforms such as Starzplay Arabia, a TV streaming service of which e& has a majority stake; and Careem, the Middle East ‘everything app’ offering millions of customers easy access to food, mobility, digital payments, and more.
Faster, more cost-effective 5G deployment
The rollout of 5G networks presents both opportunities and challenges for telecom operators. While 5G promises higher speeds and new capabilities, it also requires significant infrastructure investments. Cloud-based virtual networks offer a cost-effective alternative to traditional hardware-heavy deployments, allowing operators to accelerate 5G rollout and stay competitive. AI further enhances the 5G opportunity by improving network planning and performance optimisation. By reducing reliance on physical infrastructure, operators can roll out 5G services more quickly, meeting customer expectations while managing costs.
Cloudification of Radio Access Network (RAN)
The cloudification of Radio Access Networks (RAN) using 5G technology can also enhance telecom operators’ efficiency and flexibility, accelerating the ability to explore new opportunities and services that can deliver genuine value to customers and society at large.
du – another UAE telco major – announced this year a strategic collaboration with AWS and Nokia to drive innovation through the cloudification of its RAN in the UAE. The collaboration leverages Nokia’s Cloud RAN technology and AWS’s cloud infrastructure, including AWS Outposts, to explore key use cases in wireless networks and the RAN Edge.
This initiative supports du’s ambitions to accelerate digital transformation, enhance network efficiency and flexibility, and enable new opportunities and services for customers, while aligning with the UAE’s digital transformation goals. The partnership highlights a hybrid RAN strategy, integrating existing infrastructure with cloud-native solutions to deliver unparalleled scalability and support advanced edge use cases.
A brighter future for telecom operators
The collaboration between telecom operators and AWS demonstrates how cloud and AI can accelerate innovation and support sustainable growth. By leveraging AWS’ capabilities, operators can modernise their infrastructure, reduce costs, and deliver new customer experiences at scale.
While the telecom industry faces challenges, AI and cloud computing offer a clear path to growth. By personalising customer experiences, optimising operations, accelerating 5G deployments, and enabling new levels of innovation, these technologies are helping operators unlock new value and improve both their top and bottom lines.
The benefits are clear: AI and cloud are reshaping the telecom industry and paving the way for a more efficient, innovative, and customer-centric future. As operators look to navigate the next chapter, embracing AI and cloud—with partners like AWS—will be critical to staying ahead of the curve and delivering on the promise of connectivity for customers worldwide.
