For the better part of a decade, the global telecommunications sector has been viewed by investors with a mix of respect and boredom.
Telcos were “the pipes” – predictable, infrastructure-heavy utility plays that offered stable dividends but lacked the explosive growth narratives of the Silicon Valley giants they enabled.
The rise of Artificial Intelligence (AI) will be a game-changer for the sector and winning businesses are changing how the serve, sell and operate – but executive leadership teams will need to make some bold calls to maximise value out of the technology.
According to the latest Boston Consulting Group (BCG) Telco Value Creators Report, the sector is experiencing a “Great Recovery.”
After years of stagnation, median Total Shareholder Return (TSR) has climbed to 9%, comfortably outstripping the cost of equity.
But the real story for South African observers isn’t just the recovery – it is who is leading it.
While developed-market giants struggle with legacy debt and regulatory saturation, Emerging Market (EM) telcos are proving that they are not just infrastructure plays; they are growth engines who have been able to embrace fintech integration and empower consumers to transact.
The 2026 data highlights a widening chasm between those who simply manage networks and those who create ecosystems.
The top five value creators globally have delivered staggering returns, often driven by their dominance in high-growth, mobile-first economies.
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Reliance Jio (India): ~32% TSR. By consolidating a massive market and turning connectivity into a gateway for digital services, Jio remains the gold standard for value creation.
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Bharti Airtel (India): ~28% TSR. Similar to Jio, Airtel has benefited from a rationalised market and a massive surge in data consumption and has operations in 14 African countries through its subsidiary Airtel Africa.
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MTN Group (South Africa/Pan-Africa): ~24% TSR. Despite currency volatility and geopolitical headwinds, MTN’s “Ambition 2025” strategy – focused on fintech (MoMo) and structural separation – has resonated powerfully with investors.
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China Mobile (China): ~22% TSR. A leader in 5G deployment and industrial AI applications.
- Telenor (Emerging Asia focus): ~20% TSR. Through strategic mergers in markets like Malaysia and Thailand, Telenor has unlocked significant operational efficiencies.
The Rise of the “AI-First” Telco
The BCG research is clear: the era of “AI as an IT project” is dead. The top value creators of 2026 have moved toward becoming AI-First Telcos.
An AI-first telco is an organisation where Artificial Intelligence is the foundational layer of the operating model, rather than a “bolt-on” feature. It is a shift from using AI to fix problems (reactive) to using AI to reimagine the business.
In an AI-first model, the network self-optimises in real-time based on predictive traffic patterns, marketing offers are generated individually for every subscriber based on behavioural data, and “Network-as-a-Service” becomes a reality, allowing businesses to dial bandwidth up or down as easily as they manage a Cloud subscription.
The opportunity for Emerging Market telcos is that while they have shown agility to move beyond pure infrastructure plays, they have also done so on legacy technology. On the African continent approximately 80% of transactions remain driven by USSD technology as opposed to first world “App” infrastructure which is more in line with the expectations of the “Digital Native”. This is creating an artificial ceiling.
Through API’s telcos can integrate their technology with third party technology suppliers allowing for integration with the likes of financial services products. Integrated products become strategic levers – not just buzzwords.
In managing this transition, leadership teams should adopt a 10/20/70 framework: only 10% of effort should go to algorithms, 20% to technology and data infrastructure, and a full 70% to people and process transformation. This is critical because African telco leadership teams often over-index on the technology buy and under-invest in change management.
Key Trends Identified in the 2026 Report:
These are some of the trends we are watching in the telco space in 2026.
1. Hyper-Personalisation and ARPU Expansion: Leading telcos are moving away from “one-size-fits-all” data bundles. Using Generative AI, they are creating personalized customer journeys. Instead of a chatbot that simply answers a bill query, the AI-first telco uses a digital concierge that understands a user’s habits and offers a tailored entertainment or financial service at the exact moment of need. This shift is turning customer service from a cost centre into a revenue driver.
3. The “Software-Defined” Network Revolution: The report highlights a massive shift toward Open RAN (Radio Access Network) and software-defined infrastructure. This allows telcos to break free from “vendor lock-in”. By using AI to manage a multi-vendor network, telcos can reduce Capital Expenditure by 15-20% while increasing network resilience.
3. Sovereign AI and Cloud Services: In 2026, governments are increasingly concerned about data residency. Telcos are uniquely positioned to provide “Sovereign Cloud” solutions – local data centres powered by AI that ensure sensitive national and corporate data stays within borders. This is a massive new revenue pool for the enterprise (B2B) side of the business.
The opportunity for Emerging Market telecoms operators
As Emerging Market telecoms operators begin to integrate AI into their operations, we anticipate a number of opportunities presenting themselves to executive leadership teams and those tasked with executing strategy.
However, despite the global hype, the reality is that African telcos have not yet fully “cracked” AI integration. While many are experimenting at the edges, few have successfully embedded AI into the core of how they sell to, serve, and operate for their customers.
This gap between potential and practice represents a massive opening for forward-thinking management teams to fundamentally change their operating models.
The rewards for bridging this gap are substantial. On the revenue line, we anticipate that operators could optimise for a 3 – 5% increase in revenue. This will largely be achieved through AI-driven customer acquisition and significantly reduced churn across existing client bases.
Technological advancements will also have a direct impact on network infrastructure. By utilizing AI-enabled analysis of network traffic, operators can ensure that high-quality infrastructure is dynamically routed to areas of highest demand. This precision-led approach could translate into cost efficiencies of between 15-20%.
The opportunity for telco operators on the African continent is significant, but it is also time-sensitive. Leadership teams must embrace these future-fit models now to contain costs and secure greater market share. In an increasingly competitive landscape, those who hesitate risk being left behind by forward-thinking peers who are already moving to secure customer loyalty through technology.
