The convergence of telcos and hyperscale cloud providers (hyperscalers) has become a focal point, especially since the emergence of generative artificial intelligence (GenAI).
This trend is particularly pronounced in Asia, where both entities are striving to harness GenAI's transformative potential. The dynamics between telcos and hyperscalers oscillate between competition and collaboration, each seeking to leverage their unique strengths to capture emerging opportunities.
Interestingly, a recent report by McKinsey estimates that nearly USD 100 billion in incremental value, and up to USD 180 billion in productivity gains, can be realized by telcos that position themselves at the forefront of this transformation.
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The GenAI Matchmaker: Why Are Telcos and Hyperscalers Collaborating?
Traditionally, telcos have been the custodians of extensive network infrastructures, providing connectivity services across vast regions. With the advent of GenAI, telcos are recognizing the imperative need to evolve beyond mere connectivity providers. This evolution involves integrating advanced AI capabilities to offer innovative services, thereby enhancing customer experiences and operational efficiencies. Marcin Kaleta, Vice President and Director of the Telecommunications Division at Comarch, emphasized the reasoning behind this shift, stating:
The transition from traditional telcos to tech companies creates opportunities for service providers to expand into new areas and compete with businesses from different industries.
On the other hand, hyperscalers like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure have established themselves as leaders in cloud computing and AI services. Their expansive infrastructure and expertise in data analytics position them favorably to offer GenAI solutions. In Asia, these hyperscalers are forging strategic partnerships with local telcos to deploy GenAI applications.
Despite the competitive undertone, there is a growing recognition of the mutual benefits that collaboration between telcos and hyperscalers can yield. Telcos bring to the table extensive network coverage and a deep understanding of local markets, while hyperscalers contribute advanced AI technologies and scalable cloud infrastructures.
By partnering with hyperscalers, telcos can integrate GenAI capabilities into their existing services without the need for substantial in-house development. Conversely, hyperscalers gain access to the telcos' extensive customer bases and localized expertise, facilitating the deployment of their AI solutions in diverse markets.
Elaborating on the consequences of this symbiotic collaboration, Vikram Sinha, President Director and Chief Executive Officer of Indosat Ooredoo Hutchison (Indosat), highlighted, “Indosat is transforming from a traditional telecom provider into an AI-techco, integrating AI into its core strategy and operations to boost innovation and efficiency. By reshaping its business model, Indosat is diversifying its services beyond telecommunications into sectors such as digital finance, e-commerce, and health tech.”
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GenAI-Driven Telco-Hyperscaler Partnerships
Notably, in September, 2023, KDDI partnered with AWS Japan to accelerate the adoption of GenAI and private 5G for businesses and municipalities, addressing workforce shortages and operational inefficiencies. Through this collaboration, KDDI provided a one-stop solution for GenAI integration, offering customized AI models developed by startups and open-source platforms.
In February, 2024, during MWC Barcelona, CelcomDigi partnered with AWS to integrate GenAI into its operations to enhance customer service, optimize network functions, and develop AI-driven enterprise solutions. The company also developed Bahasa Melayu language models using Amazon Titan and Anthropic Claude to create AI-powered chatbots tailored for Malaysia’s diverse population.
Maxis also collaborated with AWS to drive AI-powered enterprise solutions for sectors such as retail, manufacturing, and financial services. This initiative complemented Maxis’s existing partnership with Google Cloud, where it expanded GenAI applications within the cybersecurity, data analytics, and workforce training sectors.
Similarly, SK Telecom collaborated with the AWS Generative AI Innovation Center to fine-tune a telco-specific model using Anthropic Claude and Amazon Bedrock. This initiative significantly benefited industries such as manufacturing, logistics, and transportation, improving automation, computer vision, and cost efficiency.
Meanwhile, Telkomsel expanded its strategic collaboration with Microsoft, integrating Azure AI across its customer and business platforms to enhance digital experiences and network performance. A key outcome of this collaboration was the enhancement of Telkomsel’s AI-powered virtual assistant, Veronika, which significantly improved customer self-service interactions from 19% to 45%.
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GenAI for Sustainability, Service, and Security
From bolstering network security and improving customer experiences to aligning with sustainable development goals, GenAI is ensuring telco-hyperscaler collaborations are designed for longevity.
During the 18th Telecom Review Leaders’ Summit in Dubai, Kenji Takemura, Head of EMEA Transport Center of Excellence (CoE) and Director, Service Provider Solution Department, NEC, underscored GenAI's ability to deliver revolutionary services while aligning with sustainable development goals. NEC’s focus on harmonizing AI and sustainability highlights the broader implications of this technology in driving positive change within the telecom sector.
Innovative applications of GenAI extend to network operations as well. KT’s AI Meister, a GenAI-driven system, supports next-generation network management by optimizing software within network equipment. Similarly, AIS Thailand and Huawei are leveraging GenAI to propel intelligent wireless innovation forward, demonstrating the technology’s potential in enhancing operational efficiency and network performance.
Through advanced GenAI-driven solutions, SoftBank is enhancing service delivery, streamlining operations, and improving customer satisfaction. Similarly, Netcracker is expanding its collaboration with Microsoft and integrating GenAI into its offerings to simplify processes and drive efficiency in service delivery.
Indosat and Ericsson have taken a significant step by unveiling the world’s first full-stack digital monetization platform (DMP) powered by GenAI and ML. This partnership highlights the role of GenAI in reshaping business support systems (BSS).
On the security front, Nokia is utilizing GenAI to simplify complex network operations through natural language prompt engineering. Arvinder Khanna, Pre-Sales Applications and Networks Leader for APAC at Nokia, emphasized:
GenAI helps simplify highly complex networks and operations into more straightforward natural language prompt engineering. This enables macro-level business intent to be translated into service intent, and then into complex network engineering and management actions. This significantly speeds up decision-making, driving time-to-value for all network investments.
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GenAI in Asia in 2025: What Telcos and Hyperscaler’s Need to Know
According to Cisco's 2024 AI Readiness Index, only 19% of companies in ASEAN are fully prepared to harness AI's capabilities. With the GenAI market in Asia projected to grow by an impressive 41.51% between 2025 and 2030, reaching a market value of USD 83.42 billion, the region is poised to become a global leader in AI adoption.
IDC Asia Pacific's predictions for 2025–2029 reflect a growing emphasis on accountability, as business leaders in the region demand an 80% success rate for GenAI projects. Countries like China are already leading the charge, dominating the global race for GenAI patents and setting the pace for innovation. Meanwhile, Southeast Asia's fertile environment for digital transformation, as highlighted in the 2024 e-Conomy SEA report, is positioning it as a hub for AI development and adoption.
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