Telecommunications companies relying on AI could see higher, not lower costs

Telecommunications firms have been touting AI as a cost saver, using it to justify thousands of layoffs. But while the humans are disappearing, the costs aren’t always following suit. New research from Bain & Company warned that telecommunications companies risk falling into an opex trap as AI costs grow and could end up facing total costs that are higher—not lower—than where they started. “The risk is a dangerous cost-creep scenario: higher operating expenses without proportional gains in productivity, customer experience, or growth,” Bain’s team wrote. The firm outlined two potential outcomes for telecommunications companies. In the first scenario, a company is able to replace 20-30 percent of its traditional costs with AI-related expenses around agents, tokens, and data. In the second (dubbed the “cost creep” model, a company fails to cut traditional costs, and those AI expenditures simply add 20-30 percent to their overall spending.