AI demand reshapes capital allocation and operating models in telecom sector

Although the global 5G mobile communications market is still growing in 2025, higher 5G user penetration has not necessarily translated into equivalent revenue growth for telecom operators, while annual growth in mobile data traffic has continued to slow. This suggests that the traditional business model of driving performance through communications generation upgrades is facing a bottleneck, and AI is emerging as the telecom industry’s core avenue for finding a new growth curve. DIGITIMES observes that telecom carriers will increasingly move beyond being pure network connectivity providers and evolve into infrastructure participants in the AI Factory, including supplying scale-across data center interconnect (Scale-across DCI) services and building national AI ecosystems needed for sovereign AI. On the operating side, telecom operators have also begun experimenting with extending their traditional data-centric billing models to tokens, opening a new “AI-driven telco” business model.

As of 2025, the number of commercial 5G networks worldwide had reached 381, with subscribers totaling 2.96 billion, up 10.7% and 29.8% year-over-year, respectively, indicating that the 5G mobile market remains in a growth phase. However, another set of indicators points to caution: 5G operators still account for less than half of all mobile carriers, the pace of upgrading to 5G standalone (SA) architecture is far below expectations at 21%, and global 5G user penetration is only about 33%. These figures show that the broader mobile communications market remains hesitant about pushing 5G toward scale and mass adoption.

This report covers why telecom operators are adopting AI, how they plan to adopt AI, and how AI will alter existing telecom business models.