Telecom companies are betting heavily on artificial intelligence to improve productivity, automate operations and create new digital businesses. But the latest EY-Parthenon Telco of Tomorrow study suggests the harder problem may be preparing people and operating models for that transition.
Based on interviews with nearly 100 telecom C-suite executives globally, the biennial study finds that 97% expect AI to produce major productivity and operational-performance gains within five years. Yet organizations face a combination of skills shortages, budget constraints and strategic uncertainty that could make those gains difficult to realize.
For HR leaders, the findings point to a transformation challenge extending well beyond recruiting AI specialists. Telecom companies may need to redesign roles, reskill large portions of their workforce and rethink how teams are organized around increasingly automated processes.
AI Adoption Is Outpacing Workforce Readiness
Customer care and issue resolution is the most widely identified AI use case, cited by 92% of executives, followed by network optimization at 67%. Service augmentation and personalization are also among the areas attracting attention.
Those deployments can change the composition of telecom work. Routine customer-service interactions, network monitoring and operational workflows are increasingly candidates for automation or AI assistance, shifting employees toward exception handling, higher-value problem solving and technology-enabled roles.
The study highlights the scale of the potential workforce disruption. Nearly seven in 10 executives, or 69%, expect three-quarters of their workforce to be either upskilled or replaced during the next five years.
That does not mean three-quarters of telecom employees will necessarily lose their jobs. Rather, the finding signals how extensively executives expect job requirements and workforce structures to change.
For HR departments, that creates demand for skills intelligence, workforce planning, internal mobility and continuous learning systems. Companies may need to identify which capabilities are becoming obsolete, which are emerging and where existing employees can transition into new positions.
Skills Shortages Could Become a Strategic Constraint
The organizational barriers identified in the study reinforce that challenge. Fifty-four percent of executives cite budget constraints as a transformation barrier, while 43% point to insufficient current skills. Another 34% identify a lack of clarity around their strategic direction.
These issues are interconnected. Hiring external specialists can address immediate shortages, but it does not necessarily provide the workforce flexibility required when AI changes processes across multiple departments.
Telecom employers are also facing a potential attraction problem. Only 31% of executives expect the sector to rank among the most attractive industries for employees in five years.
That could make employer branding, career development and internal reskilling more important as competition for AI, cloud, cybersecurity and data talent intensifies.
New Digital Businesses Require New Skills
Telecom operators are also looking beyond traditional connectivity. Half of the executives surveyed identify non-core services as a leading growth catalyst, up from 34% in the previous 2024 study.
Cybersecurity, sovereign cloud, AI infrastructure and GPU-as-a-service are among the areas being considered. This expansion could require telecom organizations to compete for talent with technology companies that have traditionally attracted cloud engineers, AI specialists and cybersecurity professionals.
It also changes the HR operating model. A company moving from connectivity toward cloud, AI infrastructure and digital services cannot rely solely on conventional telecom skill frameworks.
The transition may require more granular skills taxonomies and workforce analytics capable of connecting business strategy with employee capabilities. Enterprise platforms from companies such as Microsoft, Salesforce and other HR technology providers increasingly address parts of this broader workforce-management problem through skills data, analytics, learning and automation.
The Telecom Talent Model Is Being Rewritten
EY Global Telecommunications Sector Leader Cédric Foray argues that technology deployment alone will not determine how much value telcos capture from AI. His assessment is that business strategy, talent development and operating-model transformation need to move together.
That is particularly relevant as telecom companies face competition from outside the traditional industry. Sixty-six percent of executives identify satellite operators as a major potential source of disruption over the next five years, while hyperscalers are simultaneously emerging as competitors and potential partners.
For HR teams, the competitive landscape means talent requirements are becoming harder to define around traditional telecom roles. AI infrastructure, cloud computing, cybersecurity and digital services increasingly overlap with technology sectors where employers are already competing for similar skills.
The resulting workforce strategy is likely to be less about adding AI tools to existing jobs and more about redesigning how work is performed.
For telecom executives, that means the AI transformation agenda increasingly has an HR dimension: determining which work should be automated, which roles should evolve, which skills need to be developed internally and where external hiring remains necessary.
Market Landscape
AI is pushing telecom companies toward a workforce model built around continuous skills development and increasingly technology-assisted operations. The EY-Parthenon findings indicate that the challenge is not simply acquiring AI technology but adapting organizational structures to use it effectively.
For HR technology providers, this creates opportunities across skills intelligence, talent management, workforce analytics, learning and development, internal mobility and employee experience. The companies able to connect these capabilities with operational workforce data could become increasingly important as enterprises move from isolated AI pilots toward organization-wide transformation.
The telecom sector therefore offers a broader lesson for HRTech: AI adoption can create demand for workforce technology at the same time that it disrupts the jobs and processes those systems are designed to support.
Top Insights
- Ninety-seven percent of telecom executives expect major AI productivity gains, increasing pressure on HR teams to prepare employees for technology-driven role changes.
- Sixty-nine percent expect three-quarters of their workforce to be upskilled or replaced, highlighting the scale of anticipated organizational and skills transformation.
- Insufficient skills are cited by 43% of executives as a transformation barrier, strengthening the case for reskilling, skills intelligence and internal mobility.
- Telecom expansion into AI infrastructure, cloud and cybersecurity could intensify competition for specialized technology talent across traditional industry boundaries.
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