Telecom chiefs say AI scaling hampered by skills gaps

HTEC has published a report on AI adoption in the telecommunications sector, finding that only 24.8% of telecom executives believe their organisations can scale AI rapidly.

Based on a survey of 255 C-suite telecom leaders in the US, UK, Germany, Spain, Saudi Arabia and the UAE, the study identifies skills shortages, fragmented deployments and weak executive alignment as the main barriers to wider adoption.

More than half of operators surveyed, 53%, said they still rely on isolated deployments, pilots or limited use cases. By contrast, 47% said AI is fully embedded across multiple functions.

The findings suggest many operators have embraced AI in principle without building the structures needed to roll it out across networks, IT systems and commercial teams. Almost half of respondents, 47.5%, identified lack of executive alignment as the biggest obstacle to scaling AI.

Technical capability is another pressure point. Almost all respondents, 99%, reported critical skills shortages, with the most acute gaps in cybersecurity and data privacy, AI and machine learning, and data engineering.

According to the survey, those shortages are already affecting performance. Some 46% of leaders said the gaps are driving higher costs, 42% reported margin pressure and 41% said they are reducing innovation.

Timing pressure

The research also points to a narrow window for operators trying to keep pace with the market. Executives said it would take an average of 1.95 years to rebuild competitiveness if they failed to act on AI opportunities, while major AI-related initiatives were estimated to take between 1.6 and 1.8 years.

That overlap suggests little room for delay as operators work through digital transformation plans, edge strategies, workforce changes and new service models. The report argues that the time needed to recover from inaction is roughly the same as the time available to deliver core programmes.

Understanding of AI strategy remains uneven at senior level. HTEC found that 57.7% of telecom leaders fall into moderate, low or very low AI literacy categories, raising questions about whether management teams are equipped to oversee deployment at scale.

Integration is another challenge. Some 45.1% of respondents said they struggle to embed AI into legacy OSS and BSS environments and distributed infrastructure, underlining how older telecom systems continue to complicate technology change.

Edge focus

One area where operators expressed greater confidence was edge AI. The survey found that 93% of telecom leaders are familiar with the concept and 96% said they can deploy it, reflecting the sector's experience in running distributed infrastructure.

Respondents expect edge AI to improve network reliability, strengthen data privacy and deliver commercial benefits through lower latency and lower costs. Many said they are pursuing hybrid build-and-partner approaches to bring those projects into service.

When asked where AI is most likely to produce measurable returns, executives most often pointed to 5G and 6G network optimisation and dynamic bandwidth allocation, cited by 49.4%. Connectivity and network performance at scale followed at 45.9%, while 42.4% pointed to operational cost reduction through automation.

New revenue models beyond core connectivity were selected by 42% of respondents, while 38.4% identified AI-driven customer experience personalisation as a likely source of returns.

The study forms part of a broader cross-sector research project commissioned by HTEC and conducted by Censuswide. The wider programme gathered responses from 1,529 C-suite leaders across several industries, with the telecom findings published as a sector-specific subset.

Philip Otley, Global Managing Partner, Telecommunications, HTEC, said: "Telcos are slow muscle that think in multi-year investment cycles. The GenAI ecosystem is fast muscle moving at an unprecedented pace. Right now, a race is underway between telcos reaching customers with AI services and companies like OpenAI and Anthropic capturing that same consumer attention. Telcos have the advantage of established customer relationships, trusted identity management, and the ability to deploy AI at the edge. But advantages only count if execution keeps pace. This will be the biggest change most people live through in their lives, with hundreds of trillions of dollars in value at stake. Telcos have a real chance to be part of that. The window to gain or lose plays out in the coming few years."

Tim Sears, Chief AI Officer, HTEC, added: "The sector is strategically aligned but operationally fragmented. Leaders agree AI matters, but far fewer understand how to scale it. Our data shows the penalty for falling behind and the time needed to catch up are almost identical windows. That leaves operators with no margin for delay."