AI adoption drives promising returns for Indian TMT companies

A majority of domestic companies, 65% in the telecom, media, and technology (TMT) sector have reported a return on investment (RoI) of 10-20% from their artificial intelligence (AI) initiatives, clearly demonstrating AI’s positive impact.

Further, AI is catalyzing substantial operational improvement, with 40% of organizations achieving cost reductions of 5-10%, says a KPMG survey shared exclusively with TOI.

While multiple studies have highlighted the positive impact of AI adoption in business performance, the survey is perhaps the first to provide concrete data specific to the sector.

These trends present a compelling case for the widespread adoption of AI across the sector, underscoring its potential to drive both financial and operational success, it adds.

The cohort comprised 32% telecom companies, 21% media organizations, and 47% tech firms. The survey of CXOs in 125-odd companies reveals that 55% companies have fully integrated AI, while 37% are in the scaling phase. Additionally, 55% of respondents anticipate that 30-50% of their product or solution portfolios will be AI-led, expecting these AI-driven offerings to contribute 10-30% of incremental revenue.

Akhilesh Tuteja, partner and national leader (TMT) KPMG India told TOI: "As the global landscape rapidly embraces a digital-first future, AI is emerging as a transformative force, reshaping not just the TMT industry but all other industries. There is now a need to build a domain-specific AI model for a more specialised, faster and cost-effective outcome’’.

AI's contribution to revenue growth is becoming increasingly evident in the TMT sector , the survey adds. Significantly, 38% of companies report that AI initiatives have led to revenue growth of over 10%. Additionally, 23% have experienced a 6-10% increase in revenue following AI deployment, highlighting the scalability and revenue-generating potential of AI solutions.

Purushothaman KG, partner, head technology transformation and sector head -telecommunications, KPMG India said, "Our findings suggest that organisations adopting AI technologies are not merely enhancing their operations; they are also fundamentally reshaping customer experiences and driving innovation in ways we haven't seen before. For companies in the TMT sector, the message is clear: those who embrace AI and invest in robust strategies to integrate these technologies will emerge as leaders in a highly competitive environment’’.

The adoption of AI within the TMT sector is primarily driven by three key factors: revenue growth (40%), compliance, security, fraud prevention, and risk management (30%), and operational cost reduction (30%). AI's potential to drive revenue growth and reduce costs highlights its holistic value proposition for TMT companies, aligning strategic objectives with financial performance.

As organizations recognize these benefits, AI adoption is spreading across various functions. Leading this charge is the sales and marketing function, with 43% of organizations leveraging AI to reduce customer acquisition costs and improve customer engagement.

Operations and delivery functions also show significant AI adoption at 38%, highlighting AI’s role in driving operational efficiencies, process optimization, and productivity gains. While finance and HR functions have a lower AI adoption rate of 19%, it adds.