Telecom companies must leverage service providers to shape their future

The telecom sector is undergoing a massive overhaul as the capital expenditure-heavy industry seeks new revenue streams to drive growth and stakeholder value. As mentioned in a previous HFS Point of View, chief among the industry’s challenges are the ongoing need to modernize aging infrastructure, accelerate new service offerings, reduce churn, and achieve growth in adjacent sectors.

In its Communications, Media and Information Services (CMI) presentations to analysts, TCS laid out its roadmap to help telcos shift into this new paradigm. This aligns well with the HFS telecom framework, which identifies three strategic imperatives: end-to-end ecosystem orchestration, compliance-first operations, and innovation through open architectures. Unsurprisingly, service delivery and customer service are the two most important factors for telecom clients. Using data from the HFS Telecom Horizon, Exhibit 1 illustrates how telecom clients prioritize these two factors and want service providers to help them in these areas.

Exhibit 1: Telecom clients expect service providers to help them with service delivery, customer retention, and loyalty above all telecom services

Sample: N=18 client references
Source: HFS Research, 2025

The current state of the telecom sector

The event highlighted some crucial pointers about the current state of the telecom sector, which include:

• Enabler of tech access: The telecom sector has long been the backbone of technology access, driving its widespread democratization, and it remains central to that role today.
• Legacy continues to drag down growth: Despite enabling global connectivity through its vast infrastructure, telecom has consistently struggled to translate this advantage into sustainable monetization.
• Unlocking new value is a challenge: While consumers now expect seamless, high-speed connectivity, telecom companies are racing to unlock value from the enormous streams of user data they generate.
• New models will continue to disrupt: The rise of satellite communications players has intensified market competition, further eroding telecoms’ profitability, adding to their challenges.

From Telco to Newco: How TCS is helping its clients in this crucial and transformational journey through its solutions

TCS leverages its Operations of the Future (OOTF) framework with ‘Zero-X’ and ‘Self-X’ capabilities to enable zero wait, zero-touch, and zero-friction services through AI-driven predictive monitoring and orchestration. It also provides self-managed network operations to clients for service fulfilment, assurance, and optimization. Its CX Transformer and Agentic AI assistants support first-time-right resolutions and provide proactive customer care for telecom clients.

TCS’s solutions demonstrate real-world gains in Net Promoter Score (NPS) and Average Revenue Per User (ARPU) aligned efficiencies for telecom enterprises under pressure to reduce churn and costs. For example, for a DTH and digital platform client in India, TCS improved NPS and enabled peak recharges under 30 seconds while reducing IT costs in line with the ARPU reduction. Additionally, TCS’s access to the broader TATA ecosystem could offer additional leverage in complex deals. Still, its true differentiator will depend on how it can meaningfully integrate value across service lines across its various subsidiaries.

Every service provider servicing the telecom sector has incorporated generative AI into their offerings. TCS, too, is embedding generative AI across its telecom offerings to help meet business goals such as customer experience, scaling operational efficiency, and launching new services faster—in practical, outcome-oriented ways. Here’s how TCS is operationalizing generative AI for providing telecom transformation to its clients:

For network operations:

• It has agentic frameworks, such as Crew.AI, that provide intelligent assistants that automate and augment service tasks.
• Its 3D Network Visualization Framework, built with NVIDIA Omniverse, enables predictive fault analysis and real-world network simulation.
• TCS’s Smart Assist Framework supports generative AI-based troubleshooting for service assurance teams.

For customer experience:

• TCS leverages virtual agents that use generative AI for multi-turn, contextual conversations across domains such as IT, HR, and field operations, reducing call volumes and improving CSAT for telecom clients.

Revenue assurance:

• TCS’s Billing and Revenue Assurance Service assistant has a generative AI assistant that helps analysts through reconciliation, queries, and billing anomalies.

Sovereign AI:

• TCS is helping telecom clients build Sovereign AI Factories. These are regionalized, organization-compliant AI ecosystems aligned to data protection, industry ethics, and public-private innovation. These platforms include LLM development, AI model sandboxes, and application frameworks tailored to various telecom use cases.

What should telecom companies do to overcome these challenges?

HFS Research believes telecom companies must focus on three key areas to overcome the challenges. This is illustrated in Exhibit 2:

1. End-to-end solutions and ecosystem orchestration
2. Compliance and emerging trends, and
3. Innovation and open architecture

TCS has been focusing on all three critical aspects of its telecom and media offerings and services.

Exhibit 2: Redefining business and IT services around the core telco business and IT needs to drive telecom service outcomes

Source: HFS Research, 2025

The Bottom Line: TCS firmly believes it can help telco clients transform to techcos profitably by applying AI across their operations and CX.

The shift from ‘telco’ to ‘newco’ is not merely a buzzword; it’s a reality that organizations must face. Telecom clients must understand that choosing the right transformation partner is about outcomes, not optics. TCS’s approach, rooted in zero-touch AI, customer-centric platforms, and ecosystem leverage, reflects its network capabilities. However, enterprise buyers must measure all partners based on who can deliver measurable impact across essential metrics, such as monetization, loyalty, and agility. Enterprise buyers must push partners to prove ROI across core telecom KPIs such as NPS, ARPU, SLA adherence, and CX improvement, especially as generative AI initiatives scale from pilots to production.