Telecom leaders largely agree that connectivity has become a commodity and that AI-native services are the way forward. But slow innovation, cautious infrastructure spending and shaky digital culture suggest the sector’s ambitions are running ahead of its readiness.
The telecom industry appears to have made up its mind about where its future lies – even if it has not yet worked out how to get there. According to the HCLTech Telecom Pulse Survey Report, developed with Mobile World Live, 69 percent of respondents agree or strongly agree that connectivity is now commoditized and that new service models are needed to protect margins. Only 7 percent disagreed.
The survey, based on responses from 122 mobile industry stakeholders, was conducted against a backdrop of structural pressure. According to PwC figures cited in the report, global telecom revenues are projected to grow at a compound annual rate of just 2.9 percent between 2025 and 2028, below inflation, reaching 1.3 trillion US dollars. GSMA Intelligence estimates that new enterprise markets could unlock more than 400 billion US dollars in addressable value for operators – nearly a third of current enterprise revenues.
Against that backdrop, the report frames the transition from “telco” to “TechCo” – a shift toward AI-native, cloud-based and platform-driven business models – as less a matter of choice than of survival.
AI investment outpaces AI readiness
Respondents are broadly convinced of artificial intelligence’s commercial relevance. Six in ten rated AI and advanced analytics as a high or very high driver of future revenue, with an average score of 3.74 out of 5 across all respondents. Generative AI and large language models topped the list of technologies actively being piloted or adopted, cited by 59 percent, ahead of platform-based, API-first architectures at 52 percent and private 5G or industrial IoT connectivity at 45 percent.
Yet enthusiasm has not translated into comprehensive execution. Just 25 percent of respondents rated their readiness to deliver AI-powered, cloud-native services for enterprise customers as high, while 38 percent placed it at a moderate level and 37 percent rated it low. Investment in edge compute and network densification – foundational to next-generation digital services – remains cautious: 40 percent describe their commitment as low or nonexistent, and only 6 percent report the highest level.
Slow innovation is the leading obstacle
Asked what prevents them from capturing revenue from higher-value services, respondents pointed first to internal factors rather than technology itself. Forty-nine percent cited slow product and service innovation as the primary barrier, followed by legacy system costs and limitations at 39 percent, and a shortage of specialized skills at 40 percent. Weak partner and ecosystem engagement was the most-cited external constraint, at 38 percent. By contrast, just 6 percent identified cloud-native network functions or microservices architecture as a barrier – suggesting that organizational agility and talent, not technical capability, are the sector’s bottleneck.
That bottleneck also shows up in actual product output. Fifty-two percent of respondents launched between two and five new digital products or services beyond core connectivity in the past year; 27 percent launched one or none. Only 4 percent reported more than 21 launches.
Culture and skills lag behind ambition
The survey paints a mixed picture of organizational readiness for transformation. Just 32 percent of respondents rate their company culture as strong or very strong in enabling digital and AI change, while 49 percent describe it as moderate and 18 percent as weak. Workforce gaps compound the challenge: 38 percent of organizations estimate that between a quarter and half of staff will need significant upskilling over the next three years, and 31 percent expect that figure to reach half to three-quarters. Resistance to change and inadequate training pathways were each cited by 46 percent of respondents as key workforce challenges.
Partnerships, meanwhile, are increasingly viewed as essential rather than optional. Forty-nine percent of respondents describe partnerships with cloud providers, AI platforms, systems integrators and software vendors as very significant or critical to their strategy, with platform and API integrations the most sought-after form of collaboration, at 51 percent.
When it comes to measuring success, cost savings and operational efficiency dominate as the primary KPI, chosen by 60 percent of respondents – nearly double the share citing customer experience or employee productivity gains, each at 36 percent.
“The survey reveals relatively low levels of investment in edge and next-generation network capabilities,” said Vishal Lathar, Executive Vice President and Head of Telecom Vertical – Americas at HCLTech, according to the report. “The industry must seize the chance to transform its infrastructure and unlock the full value of AI-driven services.”
Overall, confidence that existing operating models can keep pace with AI-driven change remains cautious: 42 percent of respondents rated their confidence at a moderate 3 out of 5, while nearly equal shares reported high confidence (30 percent) and low confidence (28 percent).
Dr. Jakob Jung is Editor-in-Chief of Security Storage and Channel Germany. He has been working in IT journalism for more than 20 years. His career includes Computer Reseller News, Heise Resale, Informationweek, Techtarget (storage and data center) and ChannelBiz. He also freelances for numerous IT publications, including Computerwoche, Channelpartner, IT-Business, Storage-Insider and ZDnet. His main topics are channel, storage, security, data center, ERP and CRM.
Contact via Mail: jakob.jung@security-storage-und-channel-germany.de