How AI and Data Are Reimagining the Future of Telecom

Build a technology-driven future to be more efficient, personalize customer experiences, and grow revenue
October 24, 2023. 5 MIN READ

Our entire world continues to move online, and connectivity is key. What’s more, new AI technology is accelerating that digital transformation even quicker. It’s especially important for the telecommunications industry to keep up, not only in its digital transformation but also satisfying increased demand for connectivity and creating added value, and understanding and creating personalized experiences for customers.

The telecommunications industry isn’t just growing, it's evolving. With business value being created beyond the network, providers realize that offering a base layer of connectivity may no longer be enough. Providers need to unearth new opportunities and position their companies to take on a greater role in both the B2B and B2C value chain to find success.

Growth depends on a provider's ability to optimize the existing business while branching out beyond the traditional connectivity-based business model. This means success will come to companies that are able to reimagine – with the help of AI and automation – the ways in which they:

  • Harness the potential of data and AI
  • Grow and diversify revenue
  • Leverage technology to reduce operational costs
  • Ensure trust and compliance with sustainability reporting

Set your company up to take advantage of future growth opportunities with an agile, scalable platform.

Learn how to innovate, grow revenue, and reduce costs with Communications Cloud.

Harness the Potential of Data and AI

AI and especially automation are nothing new to the communications industry. It’s been leveraged to drive efficiency and customer satisfaction for years, starting with human-trained rule-based systems in the 1970s to the predictive network optimizations and virtual assistants of today.

But now, we are at another inflection point with generative AI, which will allow the industry to unlock even more growth opportunities and create more efficiencies. But the industry is just beginning this journey; 56% of communications companies are still investigating generative AI use cases and only a fifth are using generative AI, according to an Omdia survey. But it’s clear that the technology works: The same survey shows 73% of communications executives leveraging AI saw revenue increases.

We can’t talk about AI without addressing data. The first step has to be connecting, harmonizing and making sense of all your data. Only 15% of companies have a unified view of their customer data to make use of customer data insights. It’s why a CRM that unifies all of your customers’ data in one place to serve as the foundation of all of the applications possible with AI is so important, while also building in a layer of trust and privacy for your most sensitive customer and business data.

Once that foundation is in place, you can start seeing the benefits across the customer lifecycle.

Growing and Diversifying Revenue

Traditional high-value services like multi-protocol label switching (MPLS), short message service (SMS), and video are being replaced by software and over-the-top solutions. The price of data is dropping faster than demand is growing, mobile growth has peaked in many markets, and the value chain is evolving. This is all pushing connectivity toward commoditization. Adjacent businesses – technology platforms, marketplaces, hyperscalers, social networks – continue to use networks and other services from communications service providers to grow their businesses. Meanwhile, the telecommunications industry stagnates. Was Marc Andreessen right? Is software truly eating the world?

This rivalry with large technology and cloud players is forcing communications service providers to grow, adapt, and rethink their business models. A willingness to think outside the box will allow providers to drive and achieve business growth. Without this adaptation, providers will be unable to effectively transition from their legacy business models into growth models that capitalize on new technologies and opportunities. The good news is that the “as-a-service” business models are not new and there are many lessons learned and best practices that can be applied.

Monetizing Network Modernization

Communications providers have made major investments in modernizing their networks, particularly in 5G and fiber infrastructure. It sets the groundwork for providers to meet future needs, offset declining revenues from older technologies, and provide a foundation on which they can continue to grow.

Making the most of fiber investment

Both private and public enterprises are investing big money in fiber infrastructure. So much so, the global fiber market is expected to reach $31.3 billion by 2030.

Why fiber? Fiber is the best choice when it comes to wired connectivity. It’s faster and more reliable (and more sustainable) than copper/cable. More recently, players like government, energy and utility companies, and community investment groups are getting into the game, hoping to take advantage of the fiber opportunities. However, with their experience and expertise, communications service providers are better positioned to move fast and maximize their market share.

AI can help you capitalize on this — scaling your efforts to gain new customers and helping you better serve current ones. Generative AI implementations can allow you to ask specific questions based on your company’s CRM data, helping you make more informed decisions when it comes to optimizing your fiber investment or 5G monetization. With fiber, AI technology can help with everything from identifying neighborhoods for infrastructure projects all the way down to streamlining individual home installations.

5G monetization

5G opens a world of opportunity. It offers faster data throughput, low latency, enhanced reliability, increased network capacity, and greater connectivity across people, machines, and devices. Ensuring that the promise of 5G actually translates into tangible growth requires that providers both find and create effective monetization strategies. While there are many consumer-facing models, the bigger opportunity likely lies in business-to-business (B2B) offerings that generate new categories of usages.

These categories include:

  • Network as a Service (NaaS) – Both an architectural framework and a business model, NaaS allows providers to offer customers on-demand access to network resources that satisfy specific business needs. It gives providers the ability to lease resources, such as a multisite virtual network, to their customers.
  • Internet of Things (IoT) – Communications service providers can offer a platform to connect the growing number of IoT devices to the 5G network. This would enable providers to monitor equipment performance, use live location tracking, and pinpoint problems before they happen.
  • Network Slicing – A provider could implement value-based charging for a dedicated “slice” of the network, offering fixed access, for a specific purpose, for a set period of time. For example, an event planner might buy a “slice” of the network to set up a short-lived drone operation.

AI can help operators predict the spectrum and bandwidth of their 5G network and identify points of failure. When coupled with IoT, AI can help companies pinpoint problems before they even happen. But the use cases for AI go way beyond those examples and can help with everything from generating marketing emails to potential fiber customers to identifying potential B2B partnerships to help monetize your 5G network.

Hyperscalers and Marketplaces

Hyperscalers bring a large portion of network demand, but this represents only a fraction of the demand that likely exists. One of the lessons from the last two decades of digital business transformation is that platforms often pave the way for marketplaces (any platform that connects buyers and sellers of goods/services with one another). Now that networks are being modernized and made accessible via APIs, the challenge becomes attracting developers who know how to build and connect applications with devices. These developers may also bring unique knowledge allowing them to not only operate these devices but also tap into the analytics and AI that enable them to learn from and automate them. Furthermore, creating a self-service marketplace to onboard these solutions and commercialize them will streamline the ability for market-first movers to take advantage.

As we look into the future of telecom, many of the emerging opportunities may also involve strategic partnerships with hyperscalers like Amazon Web Services and Google. Hyperscalers are more adept at delivering infrastructure as a service (IaaS). They can do it better, faster, and cheaper. Partnering would bring new sources of revenue (such as app marketplaces, referral business, and access to new customers), and cost savings as well. It would negate the need for a telecommunications company to make broad investments in areas like hardware, tooling, and maintenance. Multi-access edge computing (MEC), as a concept and in practice, also lends itself to lasting partnerships with clear mutual benefit.

Here’s how AI can help: Machine-learning AI can make recommendations as to what other offers/products/services are potentially interesting to each customer based on what was learned from other customer sales.

AI can go beyond with concepts like:

  • searching for new partners to include in the marketplace
  • searching for new customer segments that we haven't thought of before
  • creating - and a/b testing - new offers, copy, artwork

Reducing Costs With AI, Automation and Self-Service

In the same way that providers need to find new solutions for driving growth and increasing revenue, they also need to explore innovative ways to reduce costs. Cost reduction requires that companies find ways to improve efficiencies and increase productivity both internally and externally. Employing analytics, automation, and AI can help achieve this by:

  • Reducing the size of product catalogs
  • Minimizing the number of IT stacks
  • Replacing manual processes to make employees more efficient
  • Standardizing processes to reduce mistakes
  • Organizing data so employees can easily access the information they need to make smarter, more-informed decisions

We often hear about the value of providing great customer experiences, but research has shown that the employee experience is just as important. Automation and AI enable faster, more efficient service. They free up time so that employees can focus on more valuable and complex work. This type of investment in employee growth allows providers to attract and retain a better, more dedicated workforce. This is especially important for an industry that often struggles to attract the top job candidates.

Digital Self-Service

Eighty-one percent of people attempt to fix a problem themselves before seeking support. This saves time for both the customer and the provider. However, better self-service requires providers to invest in the tools that enable them to meet this demand. People expect connected, friction-free experiences anytime, anywhere, on the channel of their choice, that pick up wherever they last left off.

While many service providers already offer some form of self-service; it’s not robust enough to meet consumer demands. People want more than the ability to pay a bill online; they want everything from granular account management to troubleshooting to installation support to service changes. Tools like remote support assistance, self-service portals, and data-powered customer service operations can help providers create the personalized experiences people have come to expect from the companies they interact with.

It’s also important to keep in mind that individual self-service capabilities can only do so much. Self-service needs to be fully integrated so that the provider can obtain a 360-degree view of the customer. This means that human-to-human interactions are informed by digital touchpoints and vice versa, so that a customer is never left having to “start at the beginning” or tell the same story twice.

Ensuring Trust and Compliance

For many years, the communications industry’s impact on the environment went relatively unnoticed, but that’s changing. The industry accounts for 3 to 4% of global CO2 emissions, about twice that of civil aviation. That’s only expected to increase – with global data traffic expected to grow around 60% per year – unless investments in energy efficiency and renewables can offset the effect.

Making these investments isn’t only important for the environment, but also for the future of business; 66% of customers have stopped using companies whose values don’t align with theirs, according to the Salesforce Trends in Communications Report.

The industry is also facing external pressure from investors, customers, employees, and regulatory bodies to report their sustainability progress. This means they need to focus on creating solutions that consume less sustainable power, while implementing tools that allow them to track and report where they are today by integrating sustainability into the core of your business.

Network modernization offers sustainable solutions for the following reasons:

  • Fiber is more efficient and sustainable than copper wire.
  • 5G is more efficient than 3G and 4G with a fewer number of radios supporting an increased number of devices.
  • 5G is often used to connect IoT devices, many of which are working to solve efficiency problems by only using power when it's needed — cutting out excess and overuse.

Emphasizing fiber and 5G offerings can help communications service providers display value by demonstrating a consumption of less direct power and enabling 5G networks to activate new sustainability businesses.

Automating your emissions tracking also allows you to save costs by optimizing field service operations and lowering fleet emissions, understanding energy consumption and taking action on wasteful areas of the network.

The marriage of constant, continuous connectivity with smart technology works to power the ever-growing green revolution by allowing us to build smarter, more sustainable solutions across a variety of industries. Communications providers not only need to ensure their house is in order due to reporting requirements and business efficiency, but also because it’s the right thing to do.

Next Steps for Future Growth

The future of the telecommunications industry is multifaceted. Gone are the days when the industry was solely focused on connectivity. Today, the consumer holds the power and their options are seemingly endless. It means putting the customer experience at the center of this new direction. To do that, you must have a complete picture of the customer and a centralized source of trusted and secured data. It allows you to provide everything from superior and personalized service to bringing partners together to offer new bundled offerings and experiences that cater to a more sophisticated customer whether they are businesses or consumers.

The companies successfully doing this are leveraging a robust cloud-based CRM that includes a holistic view of the customer – all optimized by AI – offering the ability to attract, sell, and service at scale. This digital-first approach allows providers to diversify and increase growth and revenue, increase operational efficiency and reduce costs, and maintain a level of trust and loyalty with their customers.


More resources

What Is a Network-as-a-Service (NaaS) Model and How Does It Work?
The Intelligence Playbook for Communications Service Providers
Communications Cloud Demo

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