AI-First Telcos Set to Drive Africa’s Next Wave of Fintech Growth, Report Says

Emma OKonji

A recent report from Boston Consulting Group (BCG) argues that African telecom operators can achieve a significant breakthrough by adopting API‑driven and AI‑first business models, potentially sparking a new wave of fintech growth across the continent.

Labelling the study “Telco Value Creators Report,” BCG stresses that the rise of Artificial Intelligence will transform the telecom sector, but only if executive leadership teams take decisive action to unlock its full value.

The report notes that the industry is experiencing a “Great Recovery.” After years of stagnation, median Total Shareholder Return (TSR) has risen to nine percent, comfortably surpassing the cost of equity.

While large developed‑market operators grapple with legacy debt and regulatory constraints, emerging‑market telcos are proving themselves as growth engines rather than mere infrastructure providers. They have embraced fintech integration, enabling consumers to transact more freely.

BCG’s research declares the era of “AI as an IT project” over, asserting that the top value creators of 2026 will be AI‑first telcos.

An AI‑first telco is one in which Artificial Intelligence forms the foundational layer of the operating model, rather than a “bolt‑on” feature. The shift moves from using AI to reactively solve problems to using it to reimagine the entire business.

Kitso Lemo, Associate Director of BCG’s TMT Practice and author of the report, explained: “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.”

Lemo points out that emerging‑market telcos have shown agility in moving beyond pure infrastructure roles, yet many still rely on legacy technology. In Africa, roughly 80 percent of transactions are conducted via USSD rather than modern app‑based platforms, which limits the expectations of the “Digital Native” generation. APIs can bridge this gap by allowing telcos to integrate with third‑party technology suppliers, including financial services products. Integrated products become strategic levers—no longer just buzzwords.

He recommends a 10/20/70 framework for managing the transition: 10 percent of effort on algorithms, 20 percent on technology and data infrastructure, and 70 percent on people and process transformation. “African telco leadership teams often over‑invest in technology purchases and under‑invest in change management,” Lemo said.

Key trends identified for 2026 include hyper‑personalisation and ARPU expansion. Leading telcos are deploying Generative AI to craft personalised customer journeys. Instead of a simple chatbot that answers bill queries, an AI‑first telco uses a digital concierge that understands a user’s habits and offers tailored entertainment or financial services at the exact moment of need, turning customer service from a cost centre into a revenue driver.

The report also highlights a major shift toward Open Radio Access Network (RAN) and software‑defined infrastructure, which frees telcos from vendor lock‑in. By using AI to manage a multi‑vendor network, operators can reduce capital expenditure by 15–20 percent while boosting network resilience.

Although the report outlines opportunities for emerging‑market operators, it cautions 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 report notes. “The gap between potential and practice represents a massive opening for forward‑thinking management teams to fundamentally change their operating models.”

BCG estimates that bridging this gap could deliver substantial rewards. “On the revenue line, we anticipate that operators could optimise for a three to five percent increase in revenue, largely through AI‑driven customer acquisition and significantly reduced churn across existing client bases,” the report states. “Technological advancements will also directly impact 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 percent.”

“The opportunity for telco operators on the African continent is significant, but it is also time‑sensitive,” the report warns. “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.”