Report: AI-first Telcos Will Lead Africa, Unlock Next Wave of Fintech Growth

Emma OKonji

A report released by Boston Consulting Group (BCG), has predicted that African telecoms operators can have significant breakthrough and lead the continent by adopting the API-driven and AI-first models that will unlock the next wave of fintech growth.

Tagged: ‘Telco Value Creators Report’, the research report explained that the rise of Artificial Intelligence (AI) would be a game-changer for the telecoms sector, but advised that the executive leadership teams would need to take some bold steps to maximise value out of the technology.

According to latest BCG Report, the sector is experiencing a ‘Great Recovery’. After years of stagnation, median Total Shareholder Return (TSR) has climbed to nine per cent, comfortably outstripping the cost of equity.

While developed-market giants struggle with legacy debt and regulatory saturation, emerging market telcos are proving that they are not just infrastructure players, but they are growth engines that have been able to embrace fintech integration and empower consumers to transact.

The BCG research clarified that the era of “AI as an IT project” is dead, insisting that the top value creators of 2026 have moved toward becoming AI-First Telcos.

The report described an AI-first telco as an organisation where Artificial Intelligence is the foundational layer of the operating model, rather than a “bolt-on” feature. It is a shift from using AI to fix problems (reactive) to using AI to reimagine the business.

Analysing the report, Associate Director, TMT Practice at BCG, Kitso Lemo, who authored the report, said: “In an AI-first model, the network self-optimises in real-time based on predictive traffic patterns, marketing offers are generated individually for every subscriber based on behavioural data, and “Network-as-a-Service” becomes a reality, allowing businesses to dial bandwidth up or down as easily as they manage a cloud subscription.”

According to Lemo, the opportunity for Emerging Market telcos is that while they have shown agility to move beyond pure infrastructure plays, they have also done so on legacy technology. On the African continent approximately 80 per cent of transactions remain driven by USSD technology as opposed to first world App infrastructure which is more in line with the expectations of the young generation known as the ‘Digital Native’. This is creating an artificial ceiling. Through API’s telcos can integrate their technology with third party technology suppliers allowing for integration with the likes of financial services products. Integrated products become strategic levers – not just buzzwords.

“In managing the transition, leadership teams should adopt a 10/20/70 framework: only 10 per cent of effort should go to algorithms, 20 per cent to technology and data infrastructure, and a full 70 per cent to people and process transformation. This is critical because African telco leadership teams often over-index on the technology buy and under-invest in change management,” Lemo said.

Some of key trends identified in the 2026 BCG Report, include: Hyper-Personalisation and ARPU Expansion. The report said leading telcos have moved to the use of Generative AI in creating personalised customer journey. Instead of a chatbot that simply answers a bill query, the AI-first telco uses a digital concierge that understands a user’s habits and offers a tailored entertainment or financial service at the exact moment of need, adding that the shift is turning customer service from a cost centre into a revenue driver.

The report highlighted a massive shift toward Open Radio Access Network (RAN) and software-defined infrastructure, that allow telcos to break free from “vendor lock-in”. By using AI to manage a multi-vendor network, telcos can reduce capital expenditure by 15-20 per cent while increasing network resilience, the report said.

Although the report highlighted the opportunities for emerging market telecoms operators, it however said that despite the global hype, the reality remained that African telcos have not yet fully “cracked” AI integration.

“While many are experimenting at the edges, few have successfully embedded AI into the core of how they sell to, serve, and operate for their customers. The gap between potential and practice represents a massive opening for forward-thinking management teams to fundamentally change their operating models,” the report said.

It added that the rewards for bridging the gap were substantial. “On the revenue line, we anticipate that operators could optimise for a three to five per cent increase in revenue. This will largely be achieved through AI-driven customer acquisition and significantly reduced churn across existing client bases. Technological advancements will also have a direct impact on network infrastructure. By utilising AI-enabled analysis of network traffic, operators can ensure that high-quality infrastructure is dynamically routed to areas of highest demand. This precision-led approach could translate into cost efficiencies of between 15-20 per cent,” the report added.

“The opportunity for telco operators on the African continent is significant, but it is also time-sensitive. Leadership teams must embrace these future-fit models now to contain costs and secure greater market share. In an increasingly competitive landscape, those who hesitate risk being left behind by forward-thinking peers who are already moving to secure customer loyalty through technology, “the report warned.