AI in telecom
Telecom Providers

The role of artificial intelligence in the telco business: Opportunities and Challenges

7 Mins read

The Telecommunications industry has taken significant strides in leveraging artificial intelligence (AI) to revolutionize the way they operate. By embracing AI technologies, the industry is not only able to boost productivity, but it is also able to enhance the customer experience and ensure network reliability. These advancements have paved the way for a more efficient and effective telecommunications industry, driving growth and innovation in the sector. With the use of AI, the industry is poised to unlock new possibilities and create a more connected world.

In 2019, the global artificial intelligence in the telecommunication market was valued at USD 679 million. Since then, it has been expanding rapidly with a CAGR of 38.4%, projected through 2027.

In the telecommunications sector, operations present one of the most challenging and complex areas to manage. Those telcos who excel in this area typically achieve a higher level of success than their rivals; but even so, being on top can be quite daunting. In recent years, however, AI has offered innovative solutions that promise to streamline operational processes for better performance.

Telecom companies are leveraging AI to revolutionize customer service. Through the utilization of chatbots and virtual assistants, they have been able to swiftly respond to installation, maintenance, and troubleshooting requests – improving customer experience while simultaneously reducing operational costs.

Importance of AI in telecom

The telecom industry is rapidly embracing the usage of AI, propelled by a range of key factors.

Firstly, advancements in customer analytics have opened new opportunities to gain insights into consumer preferences and behaviors. Such insights are invaluable for telecom companies as they strive to ensure that their services meet the ever-evolving needs of their customers.

Secondly, with the rapid penetration of AI, and machine learning technology within the industry, businesses are able to automate certain processes and free up resources that can be dedicated to other areas.

Lastly, research and development spending has been on the rise globally which is allowing for the development of self-optimizing networks.

Together, these factors have made AI within the telecom industry an invaluable asset for ensuring its long-term success. As telcos seek to remain competitive and profitable, investment decisions must be made that optimize the experiences of customers and employees. By leveraging AI technology, forward-thinking operators can offer streamlined processes while simultaneously improving customer retention rates.

How does AI help in the telecom industry?

Enhancing customer experience

By employing AI tools, telecom operators can unlock unlimited potential to improve the customer experience. Telecoms can leverage the power of data science, AI, and analytics to offer customers a personalized experience. By anticipating customer needs based on their historical interactions and preferences, as well as utilizing intuitive self-service menus, and chatbots in addition to natural language processing (NLP) empowered by machine learning – telecoms strive for snappy issue resolution which elevates the customer’s journey overall.

Improving contact center operations

Telcos are taking proactive steps to reduce unnecessary customer interactions and make an impact on their bottom line. By introducing AI-based self-healing solutions, telcos can prevent the need for customers to contact them with questions. These applications consider factors such as the customer’s billing history, lifetime value, and propensity for contact upon a bill change when making decisions on how best to provide a resolution.

With the help of a self-healing AI, telcos can create efficient troubleshooting processes for wireline devices. Through a system that constantly checks device speed and performance alongside nearby devices, potential issues can be anticipated and addressed before they become major problems – improving customer experience by allowing agents to focus on complex tasks with greater value.

The Vodafone Group witnessed tremendous improvements in their customer service by implementing AI-powered technology in their contact centers. Deploying an automated self-service visual assistant allowed customers to rapidly find the answers to their queries without having to wait for an agent to help them. As a result, concierge activities and more complex customer requests were considered faster and more efficiently. By using AI in its contact centers, the company was able to reduce its technician dispatch rate by 10% and increase its FCR rate by five points. This generated higher customer satisfaction across all services and products, resulting in a better overall consumer experience.

Predictive maintenance

Advanced predictive capabilities of AI solutions can determine the probability of technical issues occurring and alert technicians ahead of their visits. Data from past events, in addition to weather and traffic factors, can inform an ML algorithm that adjusts technician schedules accordingly – promoting a better customer experience by reducing the risk of costly delays.

According to McKinsey, by leveraging historical data, a telco managed to sharply increase its predictive accuracy for workforce management by 80-90%.

Telefónica has leveraged the power of AI to create a predictive platform in Argentina that can foresee outages and failures with up to 24 hours’ notice. This development saves vital maintenance spending while drastically cutting their response times – all providing customers with an improved service experience when dependability is paramount.

Preventing fraud

The powerful analytical capabilities of AI and ML algorithms are invaluable tools in the fight against increased telecom fraud. An AI-powered system can detect anomalies that would be difficult to identify manually, allowing for swift action to be taken to reduce fraud encounters. These anomalous activities may include unauthorised access or fake profiles. By utilizing such technology, telecom companies can promptly barricade suspicious entities from accessing their network, thereby drastically minimising the potential damage that could have been incurred by these malicious activities.

Network optimization

Telecommunications companies around the world are committed to improving network performance and speed for their customers, especially with the increasing reliance on network connectivity. To ensure this, telecoms are taking advantage of artificial intelligence and machine learning technologies which can detect and predict irregularities from data patterns before such problems occur.

Through their innovation and utilization of AI, telecoms now possess the potential to maintain a higher quality of service than ever before, providing enhanced user experience without compromises or disruptions. As remote work becomes common, this type of proactive monitoring and analysis is essential for providing a seamless user experience.

Robotics Process Automation

Robotic Process Automation (RPA) is revolutionizing telecom companies and has many applications to automate repetitive, data-driven tasks and processes. RPA can help reduce labor costs and errors, as well as speed up operations considerably. It can also return higher productivity, and increase efficiency and accuracy by taking on monotonous tasks from humans, allowing employees to focus on more challenging work.

Some of the specific ways RPA can support telecom companies include:

  • automated network management
  • efficient invoice and purchase order processing
  • simplified customer onboarding/offboarding processes
  • quick response to partner queries
  • improved manual sales order processing
  • accurate data transformation tasks
  • better expense control management systems
  • streamlined first call resolution (FCR) efforts

Increasing revenue

Artificial Intelligence offers a wealth of potential for telecoms in terms of leveraging data analysis to drive growth. By amassing an array of datasets such as geolocation data, detailed customer profiles, and service usage, AI can generate powerful insights which are then used to anticipate customers’ needs and make the right offer at the right time over the right channel. This way, telecoms can foster more profitable subscriber relationships by smart upselling and cross-selling their services. Put simply, AI opens up opportunities for telecoms to boost subscriber growth and maximise average revenue per user (ARPU).

Challenges faced by telcos in implementing AI

Despite its efficacy, the integration of AI technology can still be thwarted by outdated legacy systems. Therefore, careful consideration should always be given to technical integration when looking to capitalize on AI’s advantages.

With AI quickly rising as a disruptive technology, many telecoms struggle when looking to leverage its potential. This is mainly due to the lack of necessary technical expertise and experience required for successful implementation. Selecting the proper vendor for your AI project is essential, as it requires both – a high level of competence and experience.

Without access to the right data, implementing an AI system is futile. Common issues such as fragmented, unstructured, and incomplete datasets often render an efficient implementation impossible. Without access to well-arranged information that is both comprehensive and cohesive, businesses are unable to take full advantage of AI systems.

How telcos can begin their AI journey

Telcos looking to leverage the power of AI for their service operations can benefit from studying best practices implemented by those leading the way. Here are some steps to follow:

Identify use cases: For each business unit, figure out the best ways to use AI. This could be for call centers, retail, or field operations. To do this, think about what areas need the most help and what would be the easiest to implement. Once you have a list of ideas, prioritize them by how easy they would be to do and how much of an impact they would make.

Determine data availability: With each use case in mind, determine if there is data available for each use case. Then, create a plan that details what needs to be done to make the data usable.

Begin building on the use cases: Establish a strong AI service ops foundation with an agile approach from the start, beginning by leveraging descriptive analytics and eventually incorporating predictive and prescriptive models. Furthermore, establishing minimum viable products through focused sprints followed by scaling with continual learning can help ensure optimal results are attained in due course.

Create cross-functional teams: Teams of cross-functional experts, comprising both technical talent and business leaders alongside subject-matter specialists, can be tasked with developing innovative AI solutions. These teams can collaborate to create use cases and test the efficiency of their outputs.

In the current business landscape, telecommunication operators must have a competitive edge. By leveraging artificial intelligence, telcos can improve service operations and confidently face any challenges. As more customers become technology users each day, AI presents a unique opportunity for telcos to innovate their services accordingly. With the right tools like RackNap in place, telcos can overcome any challenge and perform at their best.

RackNap helps telcos automate their network operations by providing tools for automating repetitive tasks, reducing manual intervention, and improving overall efficiency. By integrating with existing systems and processes, Racknap helps telcos streamline their operations, leading to improved service quality and customer satisfaction. With its intuitive user interface and customizable dashboards, Racknap empowers telcos to drive innovation, increase productivity, and stay ahead of the competition.

To know more about how RackNap can help better your ARPU, book a demo.

Read next: Maximizing Profitability in the ISP Industry: Top 10 Strategies for Success

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