Most transactions across Africa still run on technology designed decades ago. Roughly 80% of the continent’s payment and service activity flows through legacy USSD systems, a gap that Boston Consulting Group’s Associate Director Kitso Lemo says represents both a problem and an opportunity for telecom operators willing to shift toward AI-driven models. This technology, originally designed for basic voice and SMS, operates on a session-based model that lacks the real-time capabilities required for modern digital services. Each interaction requires a new connection, limiting the complexity of transactions that can be processed.
BCG’s latest Telco Value Creators Report identifies a broader recovery in the global telecom sector, with median Total Shareholder Return climbing to 9% after years of stagnation. But the headline figure masks a widening split between companies that manage networks and those building ecosystems. Emerging Market operators are posting the strongest numbers, proving they can move beyond infrastructure into growth businesses that serve consumers directly.
The top performers globally have delivered returns that outpace the broader sector by a wide margin. Reliance Jio in India generated approximately 32% TSR by turning connectivity into a gateway for digital services. Bharti Airtel, also operating in 14 African countries through its subsidiary, posted roughly 28% TSR on the back of market consolidation and surging data demand. MTN Group delivered around 24% TSR despite currency volatility and geopolitical pressures, driven by its fintech business and structural separation strategy. China Mobile and Telenor rounded out the top tier with returns near 22% and 20% respectively.
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AI-First Telcos: A New Model for the Industry
The shift toward what BCG calls “AI-first” telcos marks a departure from how most operators currently approach the technology. An AI-first organization treats artificial intelligence as the foundational layer of its operating model rather than a feature added after the fact. This foundational shift means AI is embedded into network planning, customer acquisition, and product development from the outset, rather than being retrofitted into existing systems. Networks self-optimize based on predictive traffic patterns. Marketing offers are generated individually for each subscriber. Businesses can adjust bandwidth the way they manage a cloud subscription.
For African operators, the opportunity sits alongside a structural problem. While many have shown agility in moving beyond pure infrastructure plays, they have often done so on outdated technology. The 80% reliance on USSD creates an artificial ceiling. API integration allows telcos to connect with third-party technology suppliers and embed financial services directly into their platforms, turning what has been a connectivity business into something more strategic.
The report identifies personalization as a growing revenue lever. Rather than offering standardized data bundles, leading operators are using generative AI to build individualized customer journeys. A digital concierge that understands user habits can suggest entertainment or financial services at the moment of need, shifting customer service from a cost center into a potential revenue driver. The concierge model also enables operators to predict when a subscriber is likely to need assistance, reaching out proactively before issues escalate. Open RAN and software-defined infrastructure are also gaining traction, letting operators reduce vendor lock-in and cut capital expenditure by 15% to 20% while improving network resilience.
Sovereign Cloud Solutions: A New Revenue Stream
Governments are increasingly focused on where data sits physically, creating another opening. Telcos are positioned to offer sovereign cloud solutions with local data centers powered by AI, keeping sensitive national and corporate information within borders. This is particularly relevant for financial institutions and government agencies that face strict regulatory requirements about where customer data can be stored. BCG estimates this represents a meaningful new revenue stream on the enterprise side of the business.
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The People and Process Challenge for AI Integration
The technology itself is only part of the equation. Lemo argues that successful AI integration requires a specific allocation of effort: 10% toward algorithms, 20% toward technology and data infrastructure, and 70% toward people and process transformation. The 70% dedicated to people and process includes retraining staff, redesigning workflows, and building a culture that adopts data-driven decision making. African telco leadership teams, the report notes, tend to over-invest in technology purchases and under-invest in change management. That imbalance has historically limited what these investments actually deliver.
The numbers attached to proper AI integration are substantial. Operators could see a 3% to 5% increase in revenue through AI-driven customer acquisition and reduced churn. On the cost side, AI-enabled analysis of network traffic allows high-quality infrastructure to be routed dynamically to areas of highest demand, potentially unlocking cost efficiencies of 15% to 20%.
Whether African operators can close that gap quickly enough is the open question. The continent’s mobile-first reality gives telcos a natural advantage in deploying these models faster than counterparts in developed markets, where legacy debt and regulatory complexity slow adoption. Early adopters in markets like Nigeria and Kenya have already begun piloting AI-driven services that combine connectivity with financial inclusion. But the window is not unlimited. Competitors who move now to secure customer loyalty through technology will likely widen their lead. Those who hesitate risk finding the opportunity has already passed to more decisive players.
