Why Telecom is Gung-ho on AI
The reasons are much the same as other service businesses, but there’s a bit more here
Global telecom businesses have faced a major shift over the past few years wherein 5G has become a priority, given its ability to expand use-cases way beyond what the predecessors could take up. While individual customers are getting access to better quality content services, at the enterprise-level, businesses see telcos more as strategic partners now.
Given this scenario, the telecom industry itself has every reason to modernize and incorporate the latest technology innovations that could result in better customer experiences, smarter internal processes and innovative means to boost productivity that helps optimize network operations. All this, directly or indirectly benefiting the end customer.
Telcos appear to be early adopters of GenAI
In fact, a recent report from Nvidia titled State of AI in Telecommunications, notes that more than 90% of those surveyed confirmed that their companies were either assessing, piloting or implementing AI solutions. The survey, conducted during the October quarter of 2023, reached out to more than 400 global telecom professionals.
These professionals represented a diverse group of telecom players that included those offering mobile telephony, fixed and cable services, and the suppliers of both hardware and software to the industry as a whole. They were spread across C-suite leaders, managers, developers and IT architects.
The survey noted that Generative AI was the breakout technology of the year and was already helping some of the early adopters with better cost savings and higher revenues. The respondents in the survey were questioned on a range of AI topics such as infrastructure spends, top use cases, biggest challenges and deployment models.
Increased adoption amidst growing expectations
Forty-three percent of respondents said they were investing in GenAI solutions and there was also a marked increase in interest in adopting AI as well as growing expectations of success from using the technology. Fifty-three percent agreed that adopting AI will be a source of competitive advantage, compared to 39% who reported the same in 2022.
The report noted that Telcos were adopting AI and GenAI across a variety of business needs with 31% of the respondents claiming they already had at least six AI use cases during 2023 while another 40% said they planned to scale to six or more use cases in 2024. However, the first use case was generally across enhancing customer experience.
Customer experience and much more
Investing in customer experience optimization continues to be the most popular use case for 2023 with more than half the respondents punting on AI and GenAI. However, there’s more to the story as 42% of those surveyed also said they saw security use cases while 37% used it for predictive maintenance, network planning and operations (34%) and overall operations (34%).
Most of the respondents surveyed also accepted that overall investments were still in an early phase but growing strongly. While 43% reported an investment of over $1 million in AI in their previous year, 52% reported the same for the current year, and 66% reported their budget for AI infrastructure will increase in the next year.
From the bucket of those already investing in AI, 67% reported that its adoption had helped them increase revenues while 19% noted that this growth was more than 10% in specific business areas. Another 64% reported that AI adoption helped reduce costs with 14% of those noting that the overall reduction was more than 10%.
Finally, the survey also noted that about 40% of the telcos were using their own data to train GenAI models internally to improve things, while 29% were collaborating with partners to create or personalize the models. More than two-fifths of the respondents also favourted on-premises deployment of GenAI to facilitate low latency and quick outputs.
