AI: The True Killer App of 5G – Why It Will Succeed Where Others Failed

Christel Heydemann, CEO of Orange, recently highlighted artificial intelligence (AI) as a potential "killer app" for 5G technology, while also expressing concerns about the challenges of monetizing AI within the European telecommunications sector. This perspective underscores both the transformative potential of AI in enhancing 5G capabilities and the structural hurdles that European telecom operators face in capitalizing on these advancements.

AI: The Transformative Force in 5G Networks

The integration of AI into 5G networks promises to revolutionize telecommunications by enabling more efficient network management, personalized services, and the development of innovative applications. AI can optimize network performance in real-time, predict maintenance needs, and enhance customer experiences through intelligent automation. For example, Vodafone’s partnership with Google aims to introduce advanced AI-powered devices and services across Europe and Africa, making 5G networks more accessible and functional.

Monetization Challenges in Europe's Telecom Industry

Despite the promising synergy between AI and 5G, European telecom operators encounter significant challenges in monetizing these technologies. A primary issue is the fragmented nature of the European telecom market, which comprises numerous operators across different countries, leading to inefficiencies and reduced economies of scale. This fragmentation hampers the ability to attract substantial investments necessary for large-scale AI integration. Industry leaders attribute this lag to insufficient investment, with 38 operators in Europe compared to just a few in the US and China.

Moreover, regulatory complexities within the European Union add to the challenges. While EU regulations aim to curb monopolistic practices and protect users, some companies argue that the stringent rules may stifle AI innovation, making it harder for European firms to compete globally. For instance, Meta has raised concerns that EU tech regulations could impede AI-driven advancements, creating a disadvantage for European businesses.

Why AI in 5G Will Succeed Where Network Slicing and Intelligent Networking Fell Short

Previous telecom innovations, such as network slicing and intelligent networking, were expected to unlock new revenue streams but largely failed beyond limited applications like number translation services. The reasons for their shortcomings include:

1. Complex Implementation and Integration Costs – Network slicing required highly customised implementations across different operators and hardware vendors, making widespread adoption costly and slow.
2. Limited Demand for Customisation – While network slicing theoretically allowed for tailored services, enterprise customers found limited value in paying a premium for differentiation that didn’t offer clear business advantages.
3. Lack of a Defined Ecosystem – Unlike AI, which has clear applications in customer service, predictive analytics, and network optimization, intelligent networking struggled due to a lack of standardized, scalable applications that could generate strong demand.
4. Operator Hesitancy – Many telecom operators hesitated to invest heavily in network slicing due to uncertain returns, whereas AI adoption is being driven by cross-industry momentum, supported by cloud providers, software companies, and consumer applications.

AI in 5G is poised for success because it aligns with broader trends in digital transformation, is backed by substantial advancements in machine learning and cloud computing, and has proven, scalable use cases that directly impact operational efficiency and user experience.

Strategies for Overcoming Monetisation Hurdles

To fully harness the potential of AI in the 5G era, European telecom operators might consider the following strategies:

1. Market Consolidation – Encouraging mergers and partnerships among telecom companies could reduce market fragmentation, leading to more efficient operations and greater investment in AI technologies.
2. Regulatory Harmonisation – Simplifying and unifying regulations across the EU could create a more conducive environment for AI innovation.
3. Investment in Talent and Infrastructure – Allocating resources toward AI talent and infrastructure within Europe can strengthen the region’s capabilities. Public-private partnerships and incentives for research and development can play a pivotal role in this endeavor.
4. Collaboration with Tech Companies – Forming strategic alliances with technology firms can provide telecom operators with the expertise and tools needed to implement AI solutions effectively.

Conclusion

While AI holds immense potential to act as the "killer app" for 5G, European telecom operators must navigate structural and regulatory challenges to monetize these advancements effectively. Unlike network slicing and intelligent networking, AI benefits from clear business use cases, existing demand across industries, and strong ecosystem support. Through strategic consolidation, regulatory reform, investment in talent, and collaborative efforts, the industry can position itself to fully leverage AI’s capabilities in the evolving digital landscape.

How I Can Help

With extensive experience in product development, business strategy, and telecom innovation, I can assist operators, technology firms, and investors in identifying opportunities for AI-driven 5G monetisation. Whether it's through strategic planning, market analysis, or partnership facilitation, I can provide insights that bridge the gap between technical innovation and commercial success. If you're looking to navigate the complexities of AI and 5G integration, let’s connect and explore how we can drive value together.