Altman Solon: Less than Half of Telco Gen AI Implementations Meet Business Goals, with 80% Over Budget

Boston—Global telcos are eager for generative AI solutions but are struggling to make them work, with only half of use cases meeting business goals, according to a new report from Altman Solon and Kyndryl.

The report, which included a survey of more than 100 global telco leaders, shows that 85% of telcos have at least one generative AI use case in production but only 30% of all use cases are making it to production. Generative AI has also proven to be more expensive than expected, with 80% of respondents reporting higher than budgeted implementations.

“The potential for gen AI has so far exceeded the reality for global telecommunications providers, but it’s very early in the development cycle for this promising technology,” said Altman Solon Associate Partner Priya Mehra. “We are already seeing some telcos adapt with cost management solutions and stronger AI governance to deliver better results.”

“One of the key lessons of the report is that a ‘one-size fits all’ approach to generative AI does not work in the telco space,” said Altman Solon Partner Diane Leung. “Recognizing – and addressing – pressure points and leveraging third-party experts can help telcos sustainably scale gen AI implementations.”

Other findings include:

• 50% of respondents set a minimum threshold of 10% ROI in their business case to move their Gen AI use cases from pilot to production.
• Proficiency in data management and governance is directly tied to realizing success and stated business objective from Gen AI implementations.
• Four archetypes of telco organizations have emerged, with two, “Broad Experimenters” and “Cautious & Focused,” achieving higher success rates.
• Telcos are evaluating model deployment choices and using multi-LLM strategies within workflows to manage costs.
  

The report, From Prototype to Production: Scaling AI in the Telco Industry, also features executive interviews and case studies from the U.S. and Europe. Click here for the full report and infographic. The report was sponsored by Google Cloud Platform.

About Altman Solon 

Altman Solon is the world’s largest strategy consulting firm focused exclusively on the Telecommunications, Media, and Technology (TMT) industries. We work with market leaders, challenger brands, and investors across TMT sectors. We support our corporate clients in identifying, developing, and implementing company strategies, new market entry approaches, digital innovation, and global M&A. We help our investor clients understand markets, conduct due diligence, and make high-stakes decisions with confidence.  

Altman Solon works with seven of the top 10 global telecommunications companies, seven of the top 10 global tech companies, and six of the top 10 global media companies. Over the past twenty years, we have helped develop and implement era-defining strategies that have shaped the TMT sector. 

Altman Solon has an extensive international reach with offices in Amsterdam, Boston, London, Los Angeles, Mexico City, Milan, Munich, New York, Paris, San Francisco, Singapore, Stockholm, Sydney, Warsaw, and Zurich, with successful projects completed across the globe in more than 100 countries.  

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