According to Omdia, the telecom IT AI software market is projected to grow at a compound annual growth rate (CAGR) of 17% from 2024 to 2029, reaching a value of $5 billion.

Omdia estimates that the value of AI in telecom IT software will be $1.8bn in 2023 and predicts it will reach $2.3bn by the end of 2024. The overall value will grow at a CAGR of 17% from 2024 to 2029, reaching $5bn. Predictive AI will account for most of the value over the forecast period, reaching 76% of the total value by 2029. Predictive AI will grow at a CAGR of 13% over the forecast period. However, generative AI will grow faster, at a CAGR of 37%, and will account for 24% of the value of AI in telecom IT software by 2029. The early years of the forecast will be driven by automation and related use cases, which are relatively less valuable compared to the more widely expected recommendation and prediction use cases by the end of the forecast period. Consumer engagement and network management will account for most of the growth, as AI has already garnered attention in these segments and is driving operational efficiency, which CSPs can build on. Analysis has already been able to accomplish many tasks without the benefits of AI, so its growth will be slightly slower. Currently, AI has more limited roles in revenue generation and service management, and the forecast predicts that these segments will grow the least during the forecast period. Key information The ability of AI to deliver a range of capabilities in telecom IT software. Currently, AI mainly supports relatively low-value automation and related functions. Over time, AI will provide more valuable recommendation and prediction functions. Consumer engagement, network management, and analytics currently have the highest levels of AI capabilities and will continue to do so throughout the forecast period. Service orchestration and revenue generation will be less common but will grow in value from AI over the forecast period. AI can be divided into two categories based on whether it creates new data (GenAI) or predicts outcomes (predictive AI). Both types of AI serve different use cases and both are present in telecom IT software. AI is a key factor driving CSP digital transformation. They see AI as playing a significant role in helping them become more data-driven to improve network performance and customer satisfaction. AI is also seen as helping to enhance network analytics capabilities. Omdia forecasts that the value of AI in telecom IT software will grow at a CAGR of 17% from $2.3bn in 2024 to $5bn by 2029. Consumer engagement stands out as a driving force, as it strongly benefits from both GenAI and predictive AI in cost savings and revenue-generating use cases.