Not long ago, telecommunications (telecom) innovation was synonymous with faster speeds and broader coverage, plus new, groundbreaking technologies and advancements arriving maybe once a year. But today, the narrative has shifted dramatically. Telecommunications companies (telcos) are evolving into intelligent service platforms, powered by AI and driven by innovation. In Asia, where digital adoption is surging and customer expectations are rising, this transformation is not just timely—it’s essential.
At Microsoft, we believe that agentic AI, Microsoft 365 Copilot, and the ingenuity of our partners are reshaping the telecom landscape. Intelligent systems are no longer passive tools; they are active collaborators, driving strategic change across the region and beyond.
Accelerating AI-driven change in Asia’s telecom industry
Asia’s telecom industry is undergoing a seismic shift, driven by the rapid adoption of AI across networks, customer engagement, and enterprise operations. With more than 4.7 billion people and a mobile-first digital culture, the region presents unmatched scale and urgency for transformation.
According to IDC, 62% of communication service providers in Asia have reallocated IT budgets toward generative AI initiatives,1 reflecting a strategic pivot toward intelligent automation and innovation. Globally, 62% of telecom providers currently use generative AI, and this figure is projected to rise to almost 90% by 2027, underscoring the momentum behind AI adoption.
The GSMA’s 2025 AI blueprint for telcos highlights that AI is now a foundational driver of transformation, not just an emerging trend. Telcos are embedding AI into core business operations to optimize energy consumption, reduce operational costs, and meet sustainability goals. However, scaling AI effectively requires overcoming fragmented data systems, legacy infrastructure, and workforce readiness challenges.
As AI maturity varies across the region, success hinges on strategic leadership, robust data infrastructure, and responsible AI governance. The shift from reactive to proactive AI is well underway, with operators increasingly using AI to create new revenue streams, enhance customer experiences, and modernize networks.
The Microsoft AI blueprint for telecom in Asia
Our AI strategy for Asia’s telecom industry is built on a multidimensional framework that enables telcos to evolve from connectivity providers to intelligent service orchestrators. This transformation is anchored in four strategic imperatives:
- Reimagining customer engagement: AI-infused customer care is redefining how telcos interact with users. From branded service assistants to hyper-personalized support, telcos are using gen AI to deliver faster, more intuitive, and emotionally resonant customer experiences.
- Operational intelligence at scale: Smart automation is streamlining business and operations support systems. AI is being deployed to optimize billing, network traffic, and field service logistics, reducing costs and improving agility across the board.
- Cloud-native network modernization: With Azure AI Foundry, telcos gain access to over 1,800 generative models from OpenAI, Meta, Mistral, and Hugging Face. This empowers them to build and manage AI agents that enhance network performance, security, and scalability.
- Unlocking new growth horizons: AI is enabling telcos to move beyond traditional revenue models. By embedding intelligence into services, they’re launching new monetization streams—from predictive analytics to AI-powered enterprise offerings.
This strategy is not just theoretical—it’s delivering measurable impact. The 2025 Work Trend Index from Microsoft shows that 38% of employees in Asia use AI for continuous availability, 31% for speed and quality, and 30% for creative ideation, signaling a decisive shift toward proactive AI adoption.
Moreover, according to an IDC white paper, telecom and media companies are seeing nearly four times the return on investment (ROI) for every dollar spent on AI.2 At Microsoft, 96% of our tier-1 telecom customers are already using Microsoft AI solutions, validating the scale and effectiveness of the approach.
Partner success stories
Telstra, Australia’s leading telco, deployed two gen AI solutions—One Sentence Summary and Ask Telstra—across contact centers and retail stores with help from a Microsoft partner. Built on Azure OpenAI, these tools reduced follow-up contacts by 20% and improved employee effectiveness by 90%. The solutions are now being scaled across Telstra’s enterprise operations.
“We’ve seen firsthand how gen AI can transform frontline operations. The ability to summarize customer interactions and provide instant insights has fundamentally changed how our teams work.”
—David Burns, Group Executive for Enterprise, Telstra
Vodafone’s digital assistant TOBi, created with the help of a Microsoft partner and powered by Azure OpenAI, is live in 13 countries. It delivers hyper-personalized customer experiences and supports internal productivity through Microsoft Copilot. The initiative has improved NPS scores and reduced average handling time by 15%.
“TOBi is more than a chatbot—it’s a strategic asset. With Microsoft’s AI stack, we’ve created a solution that learns, adapts, and delivers real value to our customers.”
—Scott Petty, CTO, Vodafone
KT (Korea Telecom) has worked with a Microsoft partner to execute a full-stack AI transformation. With a $20 billion revenue base and 22,000 employees, KT’s board set a goal of 30% valuation growth in two years. With consultation from Microsoft, KT deployed Azure OpenAI, Copilot Studio, and Microsoft Fabric across its operations.
“This is not just about technology—it’s about redefining our business. Microsoft’s AI capabilities are helping us unlock new growth and operational excellence.”
—Kim Young-Shub, CEO, KT
A new era of intelligent telecom in Asia
With over 500,000 partners globally, Microsoft is supporting telcos in harnessing AI for hyper-personalized engagement, autonomous network management, and innovative monetization models. As demand for 5G, edge computing, and AI-native platforms accelerates, our industry-focused solutions continue to empower telcos across Asia to lead with agility, scale with confidence, and innovate with purpose.
A major leap forward in this transformation is the launch of the telco industry data model within Microsoft Fabric, which allows telecom operators to unify and analyze data across network metrics, customer interactions, and operational systems. This capability is helping telcos overcome legacy fragmentation and unlock actionable insights for strategic decision-making.
The real-world impact of agentic AI is already visible across the industry:
- In business support systems transformation, AI agents are streamlining billing, provisioning, and service assurance.
- In network security, intelligent systems are proactively detecting threats and automating response protocols.
- In customer engagement, AI-powered assistants are delivering hyper-personalized support and reducing operational overhead.
These innovations were showcased at MWC 2025, where Microsoft demonstrated how agentic AI is automating complex tasks, enhancing operational efficiency, and unlocking new revenue streams from predictive analytics to AI-native enterprise services.
Asia’s telcos are not just adapting to change; they are leading it. Bolstered by the Microsoft AI stack, strategic frameworks, and partner ecosystem, the region is entering a new era of intelligent telecom—one defined by resilience, responsiveness, and reinvention.
1 IDC Blog, IDC: 62% of Communication Service Providers Reallocate Budgets to Generative AI Initiatives in Asia/Pacific, June 2024
2 IDC InfoBrief, sponsored by Microsoft, 2024 Business Opportunity of AI Generative AI Delivering New Business Value and Increasing ROI, #US52699124, November 2024