A KPMG report found that 84% of telecommunications CEOs expect a positive return on investment (ROI) on artificial intelligence (AI) within three years, including 22% who anticipate an ROI in a year or less.
Sixty-two percent intend to allocate between 10% and 20% of their budgets to AI-related technology.
According to the report, titled “KPMG 2025: Technology & Telecommunications,” the top operational growth-oriented priority is “digitization and connectivity,” which was cited by 26% of respondents. KPMG says these efforts are focused on modernizing infrastructure to support 5G, satellite, and software-defined networks, as well as AI-as-a-service and cloud-as-a-service.
CEOs’ decisions are “especially influenced by technological disruption” as they integrate AI into network operations, predictive maintenance, chatbots, and responsible frameworks, KPMG said.
Two-thirds of telecom CEO respondents said AI is a top priority. It is key to accelerating big data analytics for customer insights, optimizing networks, and improving cybersecurity. The primary perceived benefits are improved decision-making and data analysis, development of new products and services to generate fresh revenue streams, and increased innovation. Telecom companies are giving business units autonomy and flexibility in AI deployment.
Deployment of such a powerful technology raises many challenges, though. Top among them are ethical concerns, which were cited by 64% as the greatest barrier to successful AI implementation. Potential pitfalls include AI model bias leading to discrimination against customers, unmet data privacy regulations, and copyright violations from unauthorized usage of intellectual property.
Trust in AI is also a huge issue. CEOs favor strong governance over who uses AI, caution in determining which areas of the business use it, and where the data is sourced. Fifty-nine percent see data readiness as a top challenge.
A perceived lack of regulation is also an issue. The survey found that 43% of telecommunications CEOs voiced uncertainty concerning compliance and legal standards in AI deployment. Regulatory frameworks around AI use of online content are evolving.
“Many telecommunications companies are still reliant on legacy infrastructure designed primarily for basic connectivity. Agentic AI offers a powerful catalyst for transformation—enabling telcos to modernize their networks and application layers to deliver smarter, more resilient services,” Aseem Sharma, KPMG Asia Pacific’s head of telecommunications sector, said in a prepared statement.
“By anticipating and resolving customer issues before they surface, adapting offerings in real time, and enabling hyper-personalized experiences, telcos can reposition themselves as intelligent, customer-first tech-cos. This marks a decisive shift from being traditional connectivity providers to becoming dynamic digital service enablers.”
Late last year, GitHub released a report conducted by Harris Polls that pointed to AI’s impact on software development in the telecommunications sector.
