As the world increasingly moves toward an AI-driven future, the telecom sector is experiencing a technological convergence of its own. Integrating emerging technologies such as 5G, IoT, AI, has revolutionised the industry, thereby enhancing connectivity, innovation, and efficiency. Over the last year, India added 7.3 crore internet subscribers and 7.7 crore broadband subscribers, with the number of telephone subscribers reaching 119.9 crore.[1]Moreover, as of today, 98% [2] districts in the country are equipped with 5G connectivity. Several factors such as the government’s initiatives towards bolstering India’s digital infrastructure, domestic telecom manufacturing capacity with a conducive regulatory environment to embrace digitalization of services, have fuelled this growth. Against the backdrop of these developments that shaped the telecom sector in 2024, let us look at the key considerations for what could be in store for 2025.
A trailblazer in adopting emerging technologies and AI
Telecoms are expected to continue to invest heavily in modernizing their infrastructure, including deploying more advanced towers, fiber optic networks, Giga data centers and enhanced spectrum usage. As per KPMG 2024 Technology and Telecommunications CEO Outlook, 55% of organizations in the TMT sector have pioneered AI and achieved full-scale implementation of select use cases. At the same time, 32% of survey respondents are in the gradual phase of scaling their AI tech and 13% are in the initial planning stages of AI adoption. While traditional machine learning has long been in use, one of India’s leading telcos has also started harnessing the power of Generative AI since its arrival a couple of years back. Digital transformation has allowed telecoms to diversify their offerings beyond traditional voice and data services. By focusing on digital platforms, OTT services, cloud-based solutions, and enterprise services, they can position themselves as end-to-end digital service providers.
Addressing disparity in AI-ready talent
As telecoms upgrade with AI and view Gen AI as a critical driver of long-term growth and profitability, a key challenge is to overcome skilled workforce. Projected to have an excess of 1.3 million skilled labourers in the TMT sector by 2030, at present India is experiencing a scarcity of approx. 150,000 skilled professionals. This is in areas such as 5G, AI/Big Data Analytics, and Robotic Process Automation (RPA). Consequently, telecom and technology companies must act promptly to establish talent pipelines and address this disparity. According to the KPMG’s TMT CEO Outlook for 2024, they remain realistic about the challenges facing their companies. Findings show over 33% of CEOs expect that 31-50% of their workforce will be AI-ready by FY26 and over 9% anticipate that over 50% of their employees will be AI-equipped.[3] This shift suggests a growing emphasis on developing AI capabilities across teams.
ESG is a key component of the development mix
Telecoms will remain focused on having environmental, social, and governance (ESG) strategies. Having ESG strategies in place can help improve customer relationships, support positive brand association, and shape capital allocation. CEOs in the TMT sector acknowledge that ESG initiatives will play a crucial role in achieving net-zero targets, supporting the workforce, and benefiting both company stakeholders and society. Organizations that prioritize sustainable, long-term growth through strategic planning across all areas of the business will be the ones that thrive. Interestingly, in KPMG’s CEO Outlook for 2024, 46% are assured that they will achieve their net-zero goals by 2030. Despite recognizing challenges like decarbonizing supply chains, skill shortages, and technological gaps, they remain optimistic. Telecoms are also addressing political conflict and climate change by prioritizing skill development and community engagement in their ESG strategies.
Operating in the age of AI
In the Union Budget 2024-25, the Department of Telecommunications and IT received an allocation of Rs. 116,342 crores, highlighting the government's dedication to enhancing India's telecom infrastructure. Projects like Bhashini are already addressing the AI gap and promoting digital inclusion. For Digital India, the focus is on seamless connectivity and fostering innovation. "Make AI in India and AI Work for India," the mission aims to drive innovation and build domestic capacities to ensure India's technological sovereignty. Telecoms need to invest in scalable infrastructure, such as 5G, cloud computing, and edge technologies, to enhance AI solutions. They can focus on AI-driven network automation and optimization to improve service reliability and reduce costs.
India is entering into the next stage of AI evolution and the telecom industry stands a chance of staying at the forefront of this new journey. A key factor for success will be a steadfast commitment to long-term, sustainable growth, supported by strategic planning throughout all areas of the organisation.
A version of this article was published on 26 December 2024 on The Economic Times -Telecom.com. The same can be read here
[1] https://pib.gov.in/PressReleasePage.aspx?PRID=2046870#:~:text=Rise%20in%20Tele%20density:%20The,rate%20of%20growth%20of%201.39%25.
[2] https://pib.gov.in/PressReleseDetailm.aspx?PRID=2057958®=3&lang=1
[3] https://kpmg.com/in/en/home/insights/2024/10/redefining-tmt-with-ai-the-future-is-now.html#:~:text=It%20reveals%20that%2055%25%20of,operational%20efficiency%20and%20customer%20engagement.
[4] https://pib.gov.in/PressReleasePage.aspx?PRID=2012375
Author
Purushothaman KG
Partner, Head Technology Transformation and Sector Head - Telecommunications
KPMG in India
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