Telcos turn to the cloud to power AI innovation

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Resilient, scalable cloud infrastructure empowers Asia Pacific’s Telcos to sustainably drive new revenue streams, enable AI-powered customer experiences, and accelerate modernization initiatives


In the last decade, the telco industry has evolved way past simple calling and texting services: the industry that connects us all is scaling to serve ever-more-demanding customers with a broad range of innovative services. As this evolution accelerates, telcos are using cloud technology to modernize their networks, transform their end-to-end operations, build innovative customer experiences, and forge new lines of business.

Customer expectations have risen especially in Asia Pacific, and we have seen telcos launching digital-native brands to address these evolving needs beyond their traditional approaches. Telcos are also building app-first digital sub-brands on the cloud to attract new customers, and deliver new experiences that are fast becoming the “new normal”.

AI solving evolving challenges

At the forefront of this wave of customer-centric innovation is artificial intelligence (AI). A recent study from Gartner highlights that tech executives within telcos worldwide are prioritizing revenue growth (84%) and customer experience improvement (80%) as their top two objectives when making investment decisions, and actively leveraging AI to solve these.

The insatiable demand for streaming, gaming, social media, video conferencing – to name a few – places enormous demands on the telcos. They are expected to delight increasingly discerning customers with personalized services using AI-optimized network performance, proactive customer support, and personalized content delivery – all while being cost-efficient.

The cloud is helping accelerate Asia-Pacific telcos in their quest to transform into tech-cos (and AI-first companies) to cope with these demands, and reduce the cost to experiment – the key to unlocking innovation. Cloud operating principles, elastic compute resources, as well as a choice of foundational models, and a broad partner community align to help telcos across the region securely integrate vast volumes of customer data across all touchpoints, driving frictionless workflows.

Enabled by cloud technology, the telco industry is reshaping itself in three ways right now:

Creating new revenue streams

Telcos are driving business growth beyond traditional connectivity services. KDDI in Japan built its SaaS solution WAKONX on Amazon Web Services (AWS) to deliver solutions for a variety of industries, starting with the logistics industry using AI and digital twin technologies. LG U+ is also collaborating with AWS to develop AI-powered business applications and cloud infrastructure solutions, to enable Korean businesses to enhance their AI capabilities.

For telcos, the ability to innovate quickly with AI is paramount to supercharging business growth. A generative AI accelerator by Meta and BCG has helped two leading telcos in Asia Pacific deploy and scale use cases in just weeks, and delivered game-changing results, from a 10-times increase in conversation rates and a 3-times reduction in acquisition cost, to increasing upsell revenue by 36 percent through a generative AI chatbot.

AI to reimagine customer experiences

Telcos in the region are also using AI to reimagine customer experiences and optimize network operations to make connectivity seamless and engaging. Samsung, for example, is helping telcos deliver better connectivity with its CognitiV Network Operations Suite, which integrates AI-driven automation to simplify managing complex radio access networks (RAN). The solution acts as an AI assistant within Samsung’s automation platform, using large language models (LLMs) to turn raw network data into readable insights using natural language. Smart, the wireless subsidiary of PLDT Philippines also recently announced its collaboration with AWS to unify its data platforms, enable advanced analytics and machine learning for personalized services, and improve operational efficiency.

Some telcos are also leveraging the cloud to access LLMs, or fine-tune them using enterprise data. LG U+ in Korea is finetuning its proprietary small language model ixi-gen to develop a work agent that help enterprise customers quickly adopt AI services. For Asia Pacific telcos in particular, it’s crucial to consider the region’s diversity as they develop or fine-tune models, to enable culturally nuanced localization. For example, CelcomDigi in Malaysia is developing and implementing Bahasa Melayu language algorithms with LLMs like Anthropic Claude on Amazon Bedrock, to create solutions such as chatbots to communicate with its linguistically and culturally diverse customer base.

Cloud for enhanced efficiency and resilience

Cloud-based networks are also becoming a cost-effective and scalable alternative for network modernization. NTT DOCOMO, Japan’s leading mobile operator, is using AWS for its 5G network evolution in Japan, having previously showcased the sustainability benefits of doing so, while Telstra in Australia has worked with AWS to support network resilience.

Telcos will now also have the choice of extending cloud computing at the edge, with AWS announcing its AWS Outposts offerings for telcos at Mobile World Congress 2025. These will help telcos serve low latency, high throughout cases even more efficiently. Looking ahead, we also expect to see telcos building AI into these edge nodes all the way to the radio networks, transforming the networks into true ‘intelligent infrastructure’ that learns and optimizes autonomously.

From telcos to tech-cos

In summary, telcos are transforming into tech-cos across APJ. They are moving beyond legacy constraints, and leveraging the cloud to unlock the power of AI – delivering enhanced customer experiences in an efficient and sustainable manner. We see this evolution as critical not just for delivering on the promise of connectivity, but also for robust growth of the industry.

 

#TelcoTransformation #CloudComputing #AIinTelecom #DigitalInnovation #5G

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