The traditional telco model is dying. AI is the lifeline.

(January 2026) “Follow the money” is a cardinal rule for investigative reporters.

It’s also the recommendation given to telecom operators by one of the sector’s leading consulting firms.

A look at industry financial trends reveals why it’s good advice.

“Between 2019 and the end of 2024, the market capitalization of the telecoms industry dropped 34 percent, despite growing revenues by 11 percent,” observes Amy Cameron, Managing Director of Research STL Partners in London.

She’s the lead author of a report that explores the impact of AI on the telecommunications industry. The report’s blunt conclusion: embrace AI and evolve into a true tech company, or watch your relevance fade fast.

In a Transform Talks interview with Huawei's Executive Editor-in-Chief Gavin Allen, Cameron says that in the past, telcos’ main assets were base stations and fiber-optic cables.

But now, software is playing a greater role in orchestrating connectivity – and is therefore becoming more valuable.

“Being able to deliver on-demand flexibility, and adaptability to end customers, on top of those physical network assets, is really where the value is,” Cameron says.