As global competitors reinvent themselves around AI and new collaboration models, U.S. telecommunication companies face a sharper question: Can they fix four critical weaknesses quickly enough to keep up? Despite record levels of investments in technology, many still struggle to translate transformation programs into measurable value.
In our work with U.S. and global operators, four recurring risks stand out — but they are fixable and can create greater opportunities.
Risk 1: The pilot purgatory trap: AI stuck in the back office
Most U.S. telcos now have AI projects running, but many are siloed within the business with no clear link to end-to-end customer journeys or value creation. AI improves reports and dashboards, but customers aren’t feeling the difference.
To get real value, AI has to move into the front line. That means asking “Which journeys matter most?” rather than “Where can we try AI?” The biggest opportunities are in sales and service — making it easier to buy, change, fix or cancel. Leading operators build cross-functional teams around priority journeys, hold them to outcomes such as churn, net promoter score (NPS) or cost-to-serve and invest in data foundations, so AI is trained in company-specific language, products and policies.
For example, one large U.S. provider embedded AI in its call centers to digitally address customer questions and drive personalized recommendations. Not only did this drive 55% increase in upsell and cross-sell revenue, but the company also achieved a 60% reduction in their contact rate.
Furthermore, many telcos must modernize critical, aging operations support system (OSS) and business support system (BSS) platforms to plug AI into day-to-day operations rather than treating AI as a bolt-on.
Risk 2: Ecosystem inertia: missing the new business model
Traditional connectivity revenue is under pressure, forcing U.S. telcos to monetize new areas. However, many struggle to move from ideas to full-scale operations because they try to do it alone or remain in traditional collaborations that limit their agility.
A critical success factor is teaming with nontraditional collaborators, such as technology firms, to explore innovative solutions. These new opportunities require telcos to work within a broader ecosystem rather than driving everything themselves.
Progress tends to be faster when operators identify a small number of growth avenues and build a mix of external collaborators around each, with clear roles and shared accountability for outcomes.
One provider is exploring engaging with technology firms to provide enhanced fraud detection capabilities to financial services institutions. Capitalizing on each provider’s network and underlying data would open a new revenue stream. As a result, customers would benefit from reduced write-offs and losses.
Without the right collaborators and a clear model for sharing risk and value, new business models are likely to remain small add-ons rather than meaningful growth engines.
Risk 3: The generation Z gap: designing for yesterday’s customer
U.S. telcos risk falling behind if they don’t keep pace with generation Z, which prioritizes simplicity and ease of use. Many younger customers find it difficult to navigate complex installations or services that require multiple steps.
If providers can’t deliver straightforward, user-friendly offerings, they risk alienating a key segment of their customer base. Meeting this demand means rethinking core journeys with a customer-centric lens — removing friction and making communication clearer from sign-up through everyday use.
Risk 4: The accountability void: operating models that can’t prove value
Even when the right projects are in place, many U.S. telcos struggle to show clear business impact. Large programs often run for years with broad goals, limited ownership and diffuse accountability, making it hard to decide what to scale, adjust or stop.
A more effective approach starts with a clear value case for every initiative, linked to metrics such as churn, NPS, revenue growth or cost savings, and regular reviews of progress. Some operators are creating a dedicated “value office” to sit across major programs, cut through silos and give executives a consistent view of benefits, risks and trade-offs.
Without this discipline, the link between transformation and value creation remains unclear.
The 2026 playbook: how US telcos can close the gap
These four risks are not new, but the time pressure is mounting. To stay ahead, U.S. telcos must:
- Focus AI on high-impact journeys. Prioritize a few journeys where AI can visibly improve experience, efficiency, and align teams and investment around them.
- Be selective about new growth bets. Choose a small number of business domains and build the right mix of collaborators before scaling.
- Redesign for simplicity and transparency. Review customer journeys through the eyes of different segments, especially younger customers, and remove steps, jargon and friction wherever possible.
- Embed value accountability. Use a simple but consistent framework to track benefits from major initiatives, challenge underperforming programs and support timely investment decisions.
U.S. telcos have the assets, customers and capital to lead in the next wave of connectivity and AI. Whether they do so will depend less on the size of their investments and more on how quickly they turn these four risks into opportunities for measurable value.
Jay Robbins is Americas Telecommunications Leader for EY; and Paolo Canale is Americas Consulting Telecommunications Leader for EY.
The views reflected in this article are the views of the authors and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
Opinion pieces from industry experts, analysts or our editorial staff do not necessarily represent the opinions of Fierce Network.