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  • Writer's pictureTomaz Tomsic

AI in Telecoms is a must have with one key question: developing it internally or use a third party?

Updated: Apr 16, 2023

Ask telecom executives what are the main trends shaping telecom industry today and the answer is usually some combination of 5G, IOT, Cloud, eSIM, Big Data and AI. According to recent surveys most of them believe that AI is one of the main tools needed to bring them competitive advantage. It is also clear why they might think that way. While today’s telecom offers are very similar to each other and offering discounts is the main selling point, using artificial intelligence in order to more precisely offer what individual customers want can bring substantial benefits in terms of increased bottom line. Therefore more than half of them already deployed some kind of AI and machine learning solutions in their companies or are planning to do so soon.

What exactly is AI in telecom? Artificial Intelligence applications in the telecommunications industry use advanced algorithms to look for patterns within the data telecoms collect and store. The areas that can use AI and machine learning in telecommunications extend from network management to churn prevention, from marketing campaigns to preventing fraud and much more. Wherever there is a vast amount of data, there is room for automation, AI and machine learning. Benefits of implementing AI in telecoms go beyond cost savings enabled by automation and optimization of network operations.

What if one could identify customers that are most likely to churn with almost 100% certainty? What if one would be able to move customers to higher price plans when customers are not even looking for any kind of change and certainly not higher prices? Wouldn’t it be great to focus on the offers that really matter for the company’s bottom-line and enjoy up to 90% acceptance rate? AI can help identify gaps in products and services portfolio as well as targeting new or underserved customer segments. AI can help with all of the mentioned and much more under a term that is called Next Best Offer (NBO) or sometimes Next Best Action (NBA). NBO is a form of predictive analytics that helps guide marketing efforts toward connecting with customers to close a deal by offering a highly customized service in the right moment over the most convenient sales channel.

Given the major benefits of AI, what are the factors hindering its faster deployment in telecom companies? While most common answer from telecoms is that they already have a solution or parts of it that they consider AI based, these solutions are more often than not developed wholly or in part internally. However, when asked about the issues telecoms are commonly facing with AI implementation, most executives consider these are mostly internal, with major factors being lack of skills and lack of internal resources, followed by the costs of implementation. So, while everybody sees AI as part of their long term future, the question is, should one dedicate already strained internal resources and risk the project to fail (as so many do) or engage outside provider.

The reply to that question goes to the heart of each company’s strategy, their approach to IT development and overall business philosophy. Although there is no right or wrong answer, it is our recommendation to always check what is available on the market first. A solution from a big data predictive analytics technology company, preferably with roots in telecom industry will reduce time to address key sales and marketing challenges including churn, usage prediction, product recommendations, segmentation and real-time dynamic pricing.

There are vendors on the market today that will take a sample of telecom’s data and provide free feedback in a matter of days, giving a quick look into what established AI tool can do when compared to internal solution.

One can also get free consultancy to revise and improve their Customer Value Management (CVM) activities. Customer Value Management (CVM) is another key to any operator’s business development and growth as it is essential to find out what value does your products and services create for your customers. This consultancy consists of 7 steps and can be done in as little as 15 day and will provide a summary of findings from all steps in discovery session, proposed future state and a high level cost, benefit and timeline estimation. As mentioned, all this is done for free. And while this might seem like something that belongs more into FMCG or cosmetics industry, to us it shows the confidence of AI vendors that their solutions, tested and proven, can be superior to in-house ones.

And if still not convinced, consider just one of the real life case that reported 2.5x ARPU uplift for renewed contracts, 183% ROI and that saved more than 18.000 work-hours which is equivalent to 10 FTEs by employing one such established solution.

If you would like to learn more about AI and Big Data solutions that can help increase the efficiency of your business please do not hesitate to contact us.

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