波士顿咨询BCG2024年TMT行业价值创造者报告

BCG

AResurgentSectorLookstoIts

AI-PoweredFuture

The2024TMTValueCreatorsReport

JUNE2024

The

AI

revolutionisunderway,transformingthe

telecommunications,media,andtechnology

sectors.Our2024TMTValueCreatorsReportclearlyshowstheresults:companiesthatdeploy,deliver,andcreatetheinfrastructureforthisremarkabletechnologyenjoysomeofthestrongestrisesin

revenuesandvaluations.

Forthisreport,ourcoremetricistotalshareholderreturn,measuredoverfiveyearstolimittheimpactofshort-termmarketmoves.Alldataisannualized,andmedianfiguresareusedforsectorstoreducetheinfluenceofoutliers.Thedataanalyzes343

publiccompaniesglobally.

TheAIrevolutionisunderway,

transformingthetelecommunications,media,andtechnologysectors.

Themoodisverydifferentfromourprevious

report,whenthe“techwinter”slashedreturns,adownturnsoseverethattechcompaniesslippedfromfirstplacetothirdinourrankingoffive-yearTSRfrom33sectors.Theimpactonthemedia

sectorwasstillmoresevere;itslippedfrommid-ranked15thtoalmostthebottomofthe

rankingsat27th.Onlythetelcosectorimproveditsfive-yearranking,from29thto26th,asinvestors

valueditsutility-likecharacteristics.

Fast-forwardtotheendof2023,however,andtechcompanies’valuationshadreboundedwithsuch

velocitythattheywerebackatthetopofthe

rankings—andwithaleadoverotherindustries

unprecedentedinthe26yearsofBCGValue

Creatorreports.Mediastocks,too,movedup

significantly,to13thfrom27thplace.Fortelcos,

medianshareholderreturnimproved,butbymuchlessthanmostothersectors;asaresult,their

rankingslidto31stfrom26th.

Strongriseto13thfrom27th

13%

Slidto31stfrom26th

6%

BothtechandmediabouncedbackintheTSRrankingsacross33industries

MEDIANFIVE-YEARTOTALTSRFOR33INDUSTRIES,2019–2023

20%

Topoftherankingsafterfallingto3rdin2023

TechMediaTelco

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Note:MedianTSRnumbersdifferfromtheGlobalValueCreatorsReportduetoslightlydifferentsamplesizesandsubsectordefinitions.

Acrosstheboard,TMTbenefitedfromcooling

inflationandabrightereconomicoutlookinmanymarkets,particularlytheUS.Demandcontinuedtobedrivenbythedigitizationofeveryfacetof

businessandpersonallife.Forsomecompanies,

fast-recoveringmarginsturbochargedtherebound;

improvedrevenuesfedstraightintothebottomlinethankstopreviouscostoptimization.Andthe

outlookfordealmakingappearsbrighter:globalM&Adealvalueinthefirstquarterof2024was18.5%higherthanthesamequarterof2023,

accordingtoS&PGlobalData,althoughthevolume

ofdealsremainsdepressed.(See“ThreeStrategies

forFutureValueCreation”laterinthereportfor

strategiestomaximizethisopportunity.)

In2023,techoutperformedasbroaderreturnsrebounded

MEDIANTSR(%)

40

20

0

–20

46

33

28

14

39

19

16

27

22

13

2

36

23

11

10

–4–2

–17

–18

–26

20192020202120222023

TechnologyMediaTelcoS&P1200

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023.

Ourotherkeymetricis

valuecreation

,measuringtheabsoluteincreaseinmarketcapitalizationplus

dividendsdistributedoverfiveyears.TMT

companiescreatedanastonishing$15trillionin

valueduringourfive-yearstudyperiod,with$14

trillioncomingfromthetechsectoralone,morethan90%ofthetotal.Thisperformancewasenoughto

boosttheentireUSmarket,theworld’slargestby

capitalization.MuchofthebuzzabouttheUSstockmarketin2023centeredonthe“MagnificentSeven”(Alphabet,Amazon,Apple,Meta,Microsoft,Nvidia,andTesla),allofwhich,apartfromTesla,areinourstudy.(WecountMetaandAlphabetasbothtech

andmediastocksbutadjustoveralltotalstoprevent

doublecounting.)ThesixTMTpowerhouses

generatedalmost$8trillionoverfiveyears—morethan50%ofthetotalvaluecreatedacrossTMT.

Techdominatedtherankingsforcreatingvalue

Rankedbyvaluecreation

2023

RankSectorCompany

Valuecreated,2019–2023($B)

5-yrTSR,

2019–2023(%)

Marketcap,2023($B)

1

Tech

Apple

2,319

38

2,994

2

Tech

Microsoft

2,097

31

2,795

3

Tech

Nvidia

1,144

72

1,223

4

Tech/Media

Alphabet

1,032

22

1,755

5

Tech

Amazon

836

15

1,570

6

Tech/Media

Meta

533

22

910

7

Tech

Broadcom

450

39

523

8

Tech

TSMC

357

25

502

9

Tech

ASML

240

39

297

10

Tech

AMD

220

51

238

2023

RankSectorCompany

Valuecreated,2019–2023($B)

5-yrTSR,

2019–2023(%)

Marketcap,2023($B)

11

Tech

SamsungElectronics

219

18

401

12

Tech

Adobe

161

21

272

13

Tech

Salesforce

150

14

255

14

Tech

Oracle

145

20

290

15

Tech

Accenture

141

22

220

16

Telco

T-MobileUS

132

20

185

17

Tech

Intuit

127

27

175

18

Tech

ServiceNow

113

32

145

19

Tech

Qualcomm

108

24

161

20

Tech

AppliedMaterials

108

39

135

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023;valuecreationisdeterminedonthebasisofmarketcapchangeandtotaldividendspayout.

Newtothelistin2023

Withinindividualsectors,afewplayersdominated

valuecreation:

·Intech,thetopthreevaluecreators—Apple,

Microsoft,andNvidia—generated40%ofthetotalsectorvalue,some$5.6trillion.

·Inmedia,theconcentrationisyetmoreextreme:AlphabetandMetadelivered$1.6trillioninvalue,morethan75%ofthesectortotal.

·Intelco,thetopfivevaluecreatorswere

responsiblefor$332billion,about60%ofthesectortotal.

Tech:UpturnPoweredbyAI,Cloud,andCostCuts

Technologyfirmsdeliveredafive-yearTSRof20%.Thisisanincreaseof7percentagepointssincewelastreportedthefive-yearTSRfigureinour2023report,aremarkableboost.

Manyofthetop-rankedcompaniesaremanufac-

turingchipsorareinvolvedintheirdesignortesting;

theymakeupsevenofthetoptencompaniesbyTSRranking.Demandissoaring.Partly,thisisduetothedigitizationofmodernsociety,witheveryproduct,

fromdoorbellstocars,gettingincreasedprocessingpower.ButtherehasbeenanadditionalrecentsurgebecausegenerativeAIsystemssuchasChatGPTandotherlargelanguagemodelsrequirevastcomputingpower.

Tech

RankedbyTSR

2023RankCompany

HQlocationIndustry

Annual5-yrTSR,2019–2023(%)

Valuecreation,2019–2023($B)

Marketcap,2023($B)

1

Lasertec

Japan

Semiconductors

94

23

24

2

SuperMicroComputer

US

Othertech

83

15

16

3

Nvidia

US

Semiconductors

72

1,144

1,223

4

ASMInternational

Netherlands

Semiconductors

69

24

26

5

DeltaElectronics

Thailand

Othertech

69

30

32

6

LatticeSemiconductor

US

Semiconductors

58

9

10

7

Advantest

Japan

Semiconductors

56

22

25

8

BESemiconductorIndustries

Netherlands

Semiconductors

56

11

12

9

Disco

Japan

Semiconductors

55

23

27

10

UnimicronTechnology

Taiwan

Othertech

55

8

9

Newtothelistin2023

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.Note:

Anotherdriveristheshifttocloudcomputing,

whichhasdeliveredgrowthnotonlyforAmazonandothergiantsbutforsomespecialiststoo.

Taiwan’sWiwynn,forinstance,whichprovides

serversandstorageforlargedatacenters,hadafive-yearTSRof51%andwasoneofthetop-20rankedfirmsbythismetric.

Forothercompanies,aleanercoststructureandthereturnofinvestorfavorprovedtobeapowerfulcombination.

Bothcostcontrolandthedrivetothecloudare

evidentatAmazon,wheremarginshaveimprovedafterthecompanyimplementedacostoptimizationprocessthatreducedthecostofsales,marketing

spending,generalandadministrativecosts,andfulfillmentexpensesasapercentageofrevenue.

Amazonalsoenjoyedtop-linegrowthinmanyareas,suchasadvertisingrevenues,whichroseby24%in2023.ItexpectsitsAWScloud-computingdivisionto

startbenefitingfromtheexpansioninGenAI.Thecompanywasatop-fivevaluecreatorinTMT,

generating$836billionoverfiveyears.

Therearestrongreturnselsewhere.Oracle,for

instance,hasseenarapidincreaseinsalescoupledwithanimprovementinnetmargin.Itinvestedinits

cloudbusinessandpartneredwithothertech

companies,includingMicrosoft,topenetratethespacefurther.In2023,itsvaluationwasalso

supportedbyitsworkinbuildinginfrastructuretosupportAIworkloadsandintegratingGenAIintoawidearrayofproductsandservices.Oracle

generated$145billioninvalueoverfiveyears,

puttingitinthetop20companiesbyvaluecreation.

Softwareandsemiconductorsgeneratedmorethan60%oftechvalue

Valuecreated($B)

Software

Semiconductors

ITservices

Allothertech

13,798

4,880

3,682

455

4,781

Topfivecreated70%+ofvalue

4,8802,097

–31

1,0321611501451,326

ValuecreatedMicrosoftAlphabet1AdobeSalesforceOracle63other

2companies

companies

lostvalue

Topfivecreated~65%ofvalue

450

3,6821,144

357240220

1,273

ValuecreatedNvidiaBroadcomTSMCASMLAMD

35othercompanies

Topfivecreated75%+ofvalue

45514180474434112

–3

ValuecreatedAccentureTataADPInfosysHCLTechnologies11other

1company

Consultancycompanies

lostvalue

Topfivecreated~80%ofvalue

4,7812,319

836533220571,001

–184

ValuecreatedAppleAmazonMeta1SamsungArista86other6companies

Electronicscompanieslostvalue

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Note:ValuecreationisdeterminedonthebasisofmarketcapchangeandtotaldividendspayoutbetweenDecember31,2018,andDecember31,2023.Numbershavebeenroundedsomaynotexactlyequaltotals.1AlphabetandMetaincludedinbothtechandmediaanalysis.

ThebiggestbeneficiaryofthedriveforAIwas

Nvidia,themostdramaticrollercoasterstoryinthisreport.In2022,itpostedaone-yearTSRof–50%

afterUSexportregulationsbannedsalesofits

mostpowerfulchipstoMainlandChina.The

companywasalsohitbyweaksalesofitschipsforcomputergaming.Itsresurgencein2023was

largelyduetoitssuper-powerfulprocessors,suchasitsH100,widelyusedforAItraining.Bytheendof2023,Nvidia’sfive-yearTSRwas72%,withvaluecreationof$1.1trillion—andthecompany

generatedafurther$1trillioninvalueduringthe

firstquarterof2024,helpedbyblowoutfourth-quarterresults.

Bysubsector:

·Semiconductors.Thissubsectorposteda

remarkablefive-yearTSRof38%.DemandwasnotdrivenjustbyAI;automotiveandindustrialmarketsshowedseculargrowth,andtheelectrificationof

theeconomy(suchasthemovetoelectricvehicles)ledtoasurgeindemandfornext-generationpowersemiconductors.Performancewasstrongnotonlyatcompaniesproducingchipsbutacrossthevaluechain,validatingthemaxim“inagoldrush,sell

shovels.”Otherstrongperformersincluded

specialistssuchasDiscoofJapan,whichmakes

specialistsaws,lasercutters,andgrindersneeded

inchipmanufacturing;thecompanydeliveredaremarkablefive-yearTSRof55%.

·

Software.Recoveringfromitswoesof2021and

2022,thissubsectorshowedafive-yearTSRof

17%andvaluecreationof$4.9trillion,aroundathirdofthetechsectortotal.CostoptimizationhelpedcompaniessuchasMicrosoft,where

revenuesgrew18%whilethecostofrevenue

increasedbyjust12%inthelastquarterof2023.Themovetothecloudisstillpoweringgrowth:

worldwidepubliccloudservicesrevenuesrose19%inthefirsthalfof2023,accordingtoIDCdata.GenAIhasbeguntobuildvalueforselectplayerssuchasOracle,althoughthelong-termpotentialstillneedstoberealized.

·ITServices.Thissubsectorpostedafive-yearTSRof17%.Themovetocloudanddigitaltransfor-

mationdroverevenues,andskillsshortagesat

clientshelpedpricingpower.Valuationswere

depressedin2022butimprovedin2023asthe

economicoutlookbrightened,leadingto

expectationsofhigherdemand.GenAIislikelyto

beanetpositiveforITservicesfirms.Although

automationwilllikelycutdemandforproductssuchasoutsourcedcustomerservice,itshouldsupport

sustainablelong-termgrowthforsomeprovidersas

theirclientsaskforhelpputtingAItowork.

Formoredetailsabouteachsubsector,seetheslideshowbelow.

5-YEARTSR

Semiconductors:rankingdominatedbysmallerplayersplusNvidiaandAMD

RankedbyTSR

2023RankCompanyHQlocation

Annual5-yrTSR,2019–2023(%)

Valuecreation,2019–2023($B)

Marketcap,2023($B)

1

Lasertec

Japan

94

23

24

2

Nvidia

US

72

1,144

1,223

3

ASMInternational

Netherlands

69

24

26

4

LatticeSemiconductor

US

58

9

10

5

Advantest

Japan

56

22

25

6

BESemiconductorIndustries

Netherlands

56

11

12

7

Disco

Japan

55

23

27

8

AMD

US

51

220

238

9

KLA

US

48

69

79

10

TokyoElectron

Japan

48

66

83

Source:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.Newtothelistin2023

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023;valuecreationisdeterminedonthebasisofmarketcapchangeandtotaldividendspayout.

5-YEARTSR

Software:smallandmidsizeplayersledtheTSRrankings

RankedbyTSR

Valuecreation,2019–2023($B)

Marketcap,2023($B)

2023RankCompanyHQlocation

Annual5-yrTSR,2019–2023(%)

1

ShanghaiBaosightSoftware

MainlandChina

46

12

14

2

CadenceDesignSystems

US

44

62

74

3

FICO

US

44

23

29

4

TradeDesk

US

44

30

35

5

Synopsys

US

44

66

78

6

Zscaler

US

41

28

33

7

Shopify

Canada

41

85

100

8

ManhattanAssociates

US

38

10

13

9

MicroStrategy

US

38

8

10

10

MongoDB

US

37

25

30

Source:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.Newtothelistin2023

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023;valuecreationisdeterminedonthebasisofmarketcapchangeandtotaldividendspayout.

5-YEARTSR

ITservices:thetoptenrankingswererelativelystable,withjusttwonewentrants

RankedbyTSR

Valuecreation,2019–2023($B)

2023RankCompanyHQlocation

Annual5-yrTSR,2019–2023(%)

1

Globant

Luxembourg

33

8

2

LTIMindtree

India

31

19

3

Fujitsu

Japan

27

17

4

HCLTechnologies

India

24

34

5

Accenture

Ireland

22

141

6

EPAMSystems

US

21

11

7

Capgemini

France

19

22

8

TataConsultancy

India

18

80

9

Infosys

India

17

44

10

Otsuka

Japan

17

3

Source:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.Newtothelistin2023

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023;valuecreationisdeterminedonthebasisofmarketcapchangeandtotaldividendspayout.

Media:ASharpUpturnDespiteSomeChallenges

Companiesinthemediasectorexperiencedastrongreboundastheymovedbeyondtheirpostpandemichangover.Theirfive-yearTSRroseto13%fromthe

previous4%,puttingthematacreditable13thofthe33sectorswetrack.

MediasubsectorsbouncedbacktopositiveTSRin2023

MEDIANTSR(%)

60

52

39

40

34

33

24

19

11

1

19

29

20

1111

2

8

0

–10

–12

–18

39

–14

–20

–18

–26

20192020202120222023

MediaoverallVideogamesDigitalmediaandadvertisingMoviesandentertainment

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023.

Performancevariedsubstantially;someofTMT’sbiggestvaluecreatorswereinthemediasector,

alongwithsomeofthemostchallengedcompanies.

Abigdriverofthesector’svaluecreationwas

Meta.Itsfive-yearvaluecreationwas$533billion,morethanaquarteroftheentiremediasectorandaremarkablechangefromthe–$197billionin

2018–2022(yes,thatisaminussignatthefrontofthatfigure).Thecompanymorethanrecovered

from2022,whichwasayearofwoescausedbymanyfactors,includingtheeconomy,changestotheadvertisingecosystem,andinvestors

recalibratingtheirlong-termgrowthforecasts.

Incontrast,2023sawMetarevenuesrisestrongly

throughinnovationssuchastheuseofAItoincreaseengagementonitsFacebookandInstagram

platforms.Thecompanyalsobenefitedfrom

improvedmarginsafterits“YearofEfficiency”

campaignin2023;itsoperatingmargininthelast

quarterof2023was41%,asubstantialimprovementfromthe20%ayearearlier.Underlyingmostofthisisthelong-termtrendtowardthedigitizationof

advertising—oneestimatereckonsMetacapturesasmuchas18%ofalldigitaladrevenuesworldwide.Asignofitsfinancialstrength:inFebruary2024,the

companyannounceditwouldpayitsfirstdividend.

Bysubsector:

·

VideoGames.Thissubsectorbenefited

significantlyfromthestay-at-homecultureofthepandemic,boostingitsfive-yearTSRto17%.Theindustryshowedinnovationinbusinessmodels,suchasintroducingin-gameadvertisingthatnowcomposes38%ofvideo-gamingrevenues

worldwide,upfrom25%in2019.Thesubsector’s

growingculturalimportanceincreasesthe

potentialfortransmediarevenues,anotabletrendacrossthemediasector,wherestrongintellectualpropertycangeneraterevenuesinmultiplenew

channels.Acasestudyinsuccess:TheSuperMarioBros.Moviewasthesecond-highest-grossingmovieworldwidein2023.

·DigitalMediaandAdvertising.Stillbenefiting

fromtheshiftawayfromlegacyformatssuchas

printandcable,thissubsectorpostedafive-year

TSRof13%.Revenueswerepropelledbytheneardoublingofdigitaladspendinginthepastfive

years,althoughgrowthisexpectedtoslow.Anotherchallengeiscompetitionfromretaileradplatforms,suchasAmazonsellingadvertisementsonitssite.

·

MoviesandEntertainment.Therewerebig

winnershereandsomeplayerswithsubstantialchallenges:nettedout,thefive-yearTSRwas4%.Thevictorsweredigitalandstreamingplayers

suchasRoku,whichhastransformeditselffromadevicemanufacturertoamajorstreaming

platform,generatinga24%five-yearTSR.Netflixwasanothersuccessstory,withafive-yearTSRof13%,showingflexibilityinitsbusinessmodelinlate2022byintroducinganad-supportedtier

insomemarkets(similartomanyotherstreamingservices).

Theranksofthechallengedincludedcompaniesthat

historicallyreliedonrevenuesfromcableTV

channels.Thesefirmssometimestrytoadaptby

offeringstreamingservices,butthisnewbusiness

modelisstructurallylessprofitablefortraditional

networksowingtosignificantlyhigheroperating

costs,reducedper-customerrevenues,andgreaterchurncausedbylowswitchingcosts.Traditionalfilmisanotherbusinessmodelunderstress:despite

Barbenheimer,globalboxofficereceiptsin2023were22%lowerthanfiveyearsago,accordingtoindustrydata.

MediasubsectorTSRrankingsweremostlyconsistentwiththepreviousyear

Videogames

2023

RankCompany

Moviesandentertainment

2023

RankCompany

Digitalmediaandadvertising

5-yearTSR,

2019–2023(%)

5-yearTSR,

2019–2023(%)

20235-yearTSR,

1

Capcom

35

2

Sea

29

3

Nintendo

24

4

KunlunTech

24

5

37InteractiveEntertainment

18

6

Kingsoft

18

7

NetEase

17

8

Nexon

13

9

SquareEnix

13

10

ElectronicArts

12

1

Roku

24

2

FormulaOneGroup

16

3

CTSEventim

15

4

LiveNationEntertainment

14

5

Netflix

13

6

SpotifyTechnology

11

7

Toho

5

8

MangoExcellentMedia

3

9

MadisonSquareGardenSports

0

EntrieswithnegativeTSRnotshown

RankCompany2019–2023(%)

1

CARGroup

28

2

Snap

25

3

WoltersKluwer

22

4

Meta1

22

5

Alphabet1

22

6

Kakao

21

7

REAGroup

21

8

RELX

17

9

PublicisGroupe

16

10

LYCorp.

15

Sources:S&PGlobalMarketIntelligence;LSEGRefinitiv;BCGanalysis.

Newtothelistin2023

Note:TSRdatacomparesDecember31,2018,versusDecember31,2023.1AlphabetandMetaincludedinbothtechandmedia.

Telcos:ModestReturnsbutPlentyofOpportunities

Telcos,too,havebeenunderpressuretobecomemoreprofitable.Multipleorganization-widecosttransformationprogramscoupledwiththe

adoptionofdigitaltoolstodriveautomationhave

hadaneffect:marginshaveimproved,andinvestorshavebecomemoreconfident.

Buttelcobusinessmodelsremainutility-like,doingrelativelywellinchallengingtimessuchas2022butunderperforminginarobustinvestmentenviron-

mentlike2023.Nosurprise,then,thatthissector’sfive-yearTSRwas6%,farbelowtheS&P1200’s

TSRof13%,puttingit31stoutofthe33sectorswetrack.

Nevertheless,telcoshavemanywaystoavoidcommoditization,including:

·

ExpandingtheCore.Innovativetelcoscanprovide

newsticky,high-valueproductsandservicesby

enhancingcoreproductssuchasmobileandfixedline.GenAIisoftenkey:forinstance,itcanimprovethecustomervalueintraditionaltelcoservices

throughpersonalization.GenAIcanalsoboostthe

toplineofthecorebusinessbyreducingchurn,expandingcross-selling,andincreasingsales

productivity.

·

DrivingExpansionOutsidetheCore.Growthin

areassuchasfinancialservicesforB2CcustomersandITservicesforB2Bcustomerscanoffset

stagnantand,insomecases,decliningrevenues

inthecorebusinesses.Butmanagersshouldnotunderestimatethechallenges:successrequires

agility,innovation,andanastuteunderstandingofthemarketbeingentered.

·RadicallyOptimizingCosts.Incoreandnoncorebusiness,companiesneedtothinkbeyondone-off

costcuttingtoimplementend-to-endcost

transformation.Manyofthelargesttelcoshave

alreadyundertakenmultiyearcosttransformationinitiatives,suchasBTGroup,whereAIisintegral

toitsplanstoreduceitsworkforcebyapproximately40%byaround2030.

·

MaximizingAssetLeverage.Giventhisindustry’s

capital-intensivenature,telcosarefindingwaysto

segmentandshareinfrastructurewhilemaintainingindividualcontrolandmanagementcapabilities.

GenAIpresentsamassiveopportunityforthetelco

industrybecauseitcancatalyzeaprofound

transformationalongtheentirevaluechain.Fromcuttingcoststocreatingnewproductsand

experiences,thebenefitsofGenAIaretangibleandfar-reaching.Forinstance,GenAI-enabledcustomer

serviceisexpectedtobeabletoreduceserviceinteractionsby50%ormorewhileimproving

customersatisfaction.

Althoughlarge-scaleapplicationsarestilltocome,firstmoversincommercializingthistechnology

withinthetelcosectormayverywellpopulatetheupperlevelsoftheTSRrankingsinfutureyears.

Todiscoverthesevenwaystelcoscangenerate

valuein2024andbeyond,seeThe2024Telco

ValueCreatorsReport.

ThreeStrategiesforFutureValueCreation

ThereboundforTSRandvaluecreationin2023wasremarkable.Butmuchmoreispossibleifmanagersconsiderthesethreestrategies:

·AccelerateddeploymentofAItooptimizetheirowninternalprocessesbutalso,crucially,toboostthetoplinewithnew,excitingproductsand

services.

·Areimaginationofcoststotakeastrategic

approachandavoidtheproblemsofconventionalcostcutting.

·SavvyM&Athatachievesstrategicoutcomessuchasensuringaccesstokeyinnovativetechnologiesbalancedwiththeongoinghighcostofborrowing.

AcceleratedDeploymentofAI

Wehavealreadyunderlinedhowthistechnology,particularlyGenAI,hasbeguntodrivevalue

creationforTMTcompanies.Buttherevolutionisjuststarting.Asignofitspotential:ChatGPT

reached100millionusersjusttwomonthsafterlaunch,amilestonethattookTikTokninemonths

andInstagram2.5years,accordingtoSensorTowerdata.OpenAI,thecompanythatcreatedChatGPT,sawitsrevenuesspikefromareported$34millionin2021toanannualized$2billionin2023.

Intermsofinternaluse,initialdeploymentslookverypromising.Forexample,GenAI-enabled

conversationalassistantshaveled,inindividualcases,toa14%increaseinproductivityfor

customerserviceagents.GenAIcanalsodrivedown

thecostofsoftwaredevelopment—asignificant

expenseformanyinTMT.BCGdatafrompilot

projectsindicatesthatmid-leveldeveloperswithtwotofouryearsofexperien