Responsible AI could unlock new revenue streams: McKinsey
Advanced practices could deploy use cases that collectively unlock up to $250b in value by 2040.
Telcos must focus on responsible artificial intelligence (RAI) could unlock new revenue streams and spur growth, according to a McKinsey report.
The report highlighted that telcos implementing the most advanced RAI practices could deploy use cases that collectively unlock up to $250b in value globally by 2040, accounting for 44% of the total AI-driven value generated across the industry during that period.
Over this period, 16% of telcos implementing performing RAI and 13% with evolving RAI are expected to capture up to $90b and $75b, respectively.
RAI refers to deploying AI ethically and safely, with transparency and compliance with regulations. In the highly regulated telecom industry, McKinsey emphasised that RAI frameworks that govern accountability and transparency are essential for building consumer trust, protecting sensitive data, and mitigating security risks.
Far from being just an ethical exercise, McKinsey said RAI is a business imperative.
RAI offers the ability to enhance business processes, streamline technology integrations, and reduce operational costs. Moreover, it strengthens brand reputation, improving customer acquisition and retention whilst driving revenue growth.
RAI also mitigates commercial and reputational risks by ensuring AI tools and applications perform accurately and align with business goals. For instance, robust RAI practices could ensure a customer service chatbot avoids biased or sensitive language, refrains from making incorrect recommendations, and never suggests a competitor’s product or service.
A well-designed RAI framework provides telcos with tools like maturity models to assess their current capabilities and identify areas for improvement and lays out best practices for progressing through the various stages of RAI deployment. These frameworks help telcos clarify their RAI strategies, ensuring that AI deployments remain aligned with operational goals whilst fostering innovation.
Despite its potential, most telcos are still in the early stages of RAI implementation, with only a few companies actively deploying advanced RAI frameworks. One major barrier is the lack of industry-wide standards, which forces telcos to adopt reactive, piecemeal governance measures to meet emerging regulatory requirements.
Whilst this approach helps telcos avoid immediate legal or financial consequences, it falls short of providing the cohesive strategy needed to maximise AI's transformative potential.
The absence of unified global standards further complicates RAI adoption. Whilst several governments and international organisations have proposed AI regulations, none have been universally adopted or tailored specifically to the telecom industry.
For example, Japan’s Act on the Protection of Personal Information regulates the collection and use of personal data, whilst Australia has introduced a generative AI framework designed to promote ethical AI use.
China has proposed measures to hold companies accountable for AI outputs and to enforce strict requirements on training data. However, these efforts lack consistency and alignment, leaving the telecom sector without a clear path forward.
Despite these challenges, McKinsey noted strong interest amongst telco leaders in implementing RAI frameworks. Many leaders recognise that robust RAI adoption will not only meet regulatory expectations but also drive innovation, safeguard operations, and enhance customer trust in an increasingly digital and competitive environment.
