Telcos face AI adoption regulatory minefield

The rise of AI presents exciting new opportunities for the telecoms industry, but also raises critical regulatory challenges.

“While the use of AI creates many benefits such as improved customer service, optimised network operations, detecting new business opportunities, cost savings, and process automation, there are also numerous risks and challenges to be aware of,” explained Sarah McBride, Principal Analyst of Regulation at Omdia. 

These risks include ensuring unbiased and reliable data, managing liability in case of errors, overcoming potential public distrust in AI decision-making, and navigating increasingly complex privacy and security concerns.

While still in its early stages, AI is set to become a major force in the telecoms sector in the coming years. Omdia’s latest report urges companies to address potential regulatory hurdles now to avoid problems down the line.

“There has been a surge of activity in the AI space, particularly around potential regulation, and this trend is likely to continue,” McBride said. “As a result, it would be prudent for telcos to proactively implement a risk management framework within their systems before AI implementation, ensuring adherence to standards of data quality, accuracy, robustness, and non-discrimination.”

Crucially, the report stresses the importance of an “ethical, human-centric and trustworthy approach to AI,” arguing that “as key enablers of AI technology, it is crucial for the telecoms sector to drive ethical and responsible AI technology.”

Given the wide range of potential applications for AI in telecoms, regulations will vary depending on the specific context.

The report points to existing EU rules like the Data Act, the Digital Markets Act, and the AI Act, as well as broader regulations such as the European Electronic Communications Code, net neutrality rules, and data protection requirements—all of which will impact the development of AI in the sector.

Data protection and security are central concerns, especially given the vast quantities of data required for AI development. Technologies that pose potential risks to public health, safety, or fundamental rights – especially those involving biometric information, network security, or critical infrastructure – will face particularly strict scrutiny. 

“Telcos must ensure they fulfil regulatory requirements for these high-risk situations such as transparency, human oversight, and data governance by completing risk assessments and implementing governance frameworks,” added McBride.

Transparency is vital to building public trust in AI, particularly when used in customer-facing applications. Telcos should be prepared to clearly communicate their use of AI to customers, including any limitations of the technology, as this is increasingly becoming a legal requirement in many jurisdictions.

(Photo by Bernd Dittrich)

See also: Huawei eyes Asia-Pacific growth with AI cloud services

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Tags: ai, artificial intelligence, law, legal, omdia, Operators, regulation, telecoms