AI in Telecommunication Market Expected to Reach $38.8 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “AI in Telecommunication Market, By Component (Solution, Service), By Deployment Model (On-Premise, Cloud), By Technology (Machine Learning, Natural Language Processing (NLP), Data Analytics, Others), By Application (Customer Analytics, Network Security, Network Optimization, Self-Diagnostics, Virtual Assistance, Others): Global Opportunity Analysis And Industry Forecast, 2022-2031". The AI in telecommunication market size was valued at $1.2 billion in 2021, and is estimated to reach $38.8 billion by 2031, growing at a CAGR of 41.4% from 2022 to 2031.

Artificial intelligence (AI) enables the telecom industry to extract insights from their vast data sets and made it easier to manage daily business and resolve issues more efficiently and also provide improved customer service and satisfaction. Artificial intelligence is an advanced technology that has the ability to make decisions as human intelligence. This technology focuses on creating an intelligent machine with the advancement in features such as speech recognition, visual recognition, image recognition, and translation between languages that are responsible for propelling the market growth. Furthermore, technology also has the potential to change the functioning and operation of various industrial sectors particularly in telecommunication.Furthermore, key market players are adopting  product launch, collaboration and other strategies for enhancing their services in the market and improving customer satisfaction. For instance, in September 2020, Nuance Communications, Inc. and Rakuten Mobile, Inc. formed a strategic partnership to add Nuance Intelligent Engagement AI Services to the Rakuten Communications Platform (RCP). As a result, RCP becomes the first-ever mobile communications, cloud-native, and virtualized platform to have Nuance Conversational and Engagement AI services built-in. Through the Nuance-Rakuten mobile partnership, RCP offers Rakuten Group companies the ability to leverage conversational AI services; engagement AI services; Nuance mix rapid AppDev environment, an enterprise-grade conversational AI tooling platform that enables organizations to rapidly develop, test, deploy, and optimize virtual assistant, natural language, and speech solutions, reducing development and optimization time by more than 50 percent.

Moreover, the increasing penetration of AI-enabled smartphones in the telecommunication industry, and the advent of 5G technology in smartphones are expected to provide major growth opportunities for the growth of the market. Since advancements such as 5G technology in mobile and the rising need to monitor content on the tale communication network to eliminate human error from telecommunication are driving the growth of the market. For an instance, the Chinese government trying to improve its network services and telecommunication services; hence China Telecom Corporation has started a new 5G base station in Lanzhou city. Therefore, these factors are expected to provide numerous opportunities for the expansion of the AI in telecommunication market during the forecast period.

By deployment mode, the on-premise segment dominated the growth of the AI in telecommunication industry in 2021, and is expected to maintain its dominance in the upcoming years, owing to high level security provided by on-premise model. However, the cloud segment is expected to witness highest growth in the AI in telecommunication market forecast, owing to the rapid adoption of cloud services for remote work as it provide flexibility and scalibilty for businesses.

North America dominates the AI in telecommunication industry. Growth of the market in this region is attributed to several factors such as increase in digitalization and adoption of advanced technologies such as AI and ML by the end users. Moreover, presence of top key players is providing ample growth opportunities for the market growth. However, Asia-Pacific is expected to witness the highest growth rate during the forecast period, owing to rapid expansion of digital infrastructure across the region.

Due to the COVID-19 pandemic, restrictive containment measures involving social distancing, remote working, and the closure of commercial activities forced companies to rearrange their operations to initiate remote working. During this period, telecommunications technology, remote working, and video conferencing have fast emerged as essential business enablers. Moreover, streaming services such as Netflix had also gained a rise among millennials, putting the telecom industry in the center. Thus, the AI in telecommunication market saw a rise in growth due to the pandemic. Hence, the COVID-19 pandemic had a positive impact on the AI in telecommunication market.

Key findings of the study

• By component, the solution segment led the AI in telecommunication market in terms of revenue in 2021.
• By deployment model, the on-premises segment accounted for the highest AI in telecommunication market share in 2021.
• By region, North America generated the highest revenue in 2021.