The telecom industry faced challenges in 2023, and most stocks in the sector duly declined. But we expect a rebound in 2024, and AudioCodes (AUDC) should benefit, explains George Gilder, editor of Gilder’s Technology Report.

Rising costs, particularly for energy, led to necessary but often insufficient cost-cutting, including the decommissioning of older networks. Network reliability was challenged by high data usage and infrastructural pressures. Add all that to a rapidly changing regulatory landscape, new competitors, and evolving consumer demands, and it was a rough year.

Telecom service providers will continue to struggle as their cash cow of consumer wireless revenues continues its long descent toward zero. But then costs of provision are dropping as well. Advancements in AI, cybersecurity, IoT, and multi-cloud connectivity will enhance scalability and efficiency.

Intelligence moves to the edge for convenience, control, and speed, aka low latency. Though at the consumer level, 5G often seems like much ado about nothing, for the enterprise, it plays a vital role. High-speed, low-latency connectivity enables faster data transfers, increased connectivity, and improved network reliability, essential for managing the larger data volumes generated by edge computing and ensuring real-time processing and analysis.

AudioCodes (AUDC)
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Facilitated by 5G, as well as driving demand for it, is the exponential increase in IoT devices. These devices produce vast data amounts that require quick, efficient processing, which is faster and more efficient when performed at the edge near where the data originates.

As for AI-enabled user applications that will demand more bandwidth and reduced latency, many have not even been imagined yet. What we already know is that Natural Language Processing (NLP) allows AI systems to understand and interact with human language effectively. In telecommunications, this is particularly useful for customer service applications, such as chatbots and virtual assistants, which can handle customer inquiries and provide support in a more efficient and human-like manner.

When technologies converge, supplying exponential new capabilities, demand doubles upon itself creating exponential growth. While these technologies make for improved use of network resources, the resulting efficiency does not reduce demand for network resources. It only increases it.

As for AudioCodes, it is a provider of advanced voice networking and media processing solutions. It should benefit from the integration of AI and machine learning technologies into telecom networks. These technologies can enhance voice recognition, call routing, and customer service experiences.

The company’s products should see increased adoption due to the enhanced efficiency and capabilities they bring to voice networking in a more connected, AI-integrated telecom environment, which, in turn, drives growing demand for sophisticated voice networking.

Recommended Action: Buy AUDC.

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