Generative AI is the latest industry megatrend to engulf the technology sector. Leading benefits include summarizing information and generating concise responses and recommendations from both simple and complex queries.
In a recent Insight Series report, CCS Insight evaluated the opportunities that generative AI presents to telecom operators and how some are already seeking to capitalize.
Weighed down by old systems, and seeking to revamp their operations so that they can emulate some of the agility and flexibility of major technology companies, operators would appear prime candidates to benefit.
Our research shows that the most immediate opportunity presented by the technology is more-effective interactions with customers. This makes sense, as customer service has long proved an Achilles heel for the telecom sector.
Successful implementation promises more accurate, automated and flexible responses to enquiries that could save operators costs and free front-line staff to undertake less monotonous tasks.
The report assesses several early deployments among operators. Vodafone, for example, is using the technology to bolster its TOBi chat bot, which it initially launched in 2017. Generative AI now enables it to interpret entire sentences and phrases, rather than just a few keywords. It can also respond more quickly and through more-personal and natural conversations rather than just one- or two-word answers.
Deutsche Telekom aims to use generative AI to improve the scope and performance of its Frag Magenta (“ask Magenta”) service. It says it will help answer more of the obscure queries that traditional assistants can’t handle, while also offering more flexible and less scripted responses to common questions.
Verizon launched four generative AI tools in May. One of these, dubbed Personal Research Assistant, reviews internal documents to arm front-line teams with information to assist customers more quickly and accurately.
The use of online channels to support customer interactions divides opinion. Many people still dislike the idea of speaking to a bot and find the experience clunky and unintuitive. But our latest survey of mobile buying in the UK showed that more than one in six people (17%) plan to interact with their mobile provider in this way over the next six months. It’s a similar proportion to those expecting to use more-traditional methods, like visiting shops or making a phone call.
Importantly, we found that usage of online chat is three times higher in younger age groups than among people aged 55 and over, suggesting it’s set for significant long-term growth.
Beyond supporting their own operations, many networks see longer-term opportunities from generative AI: one of the most interesting is to bolster strategies in the enterprise market.
This is supported by CCS Insight’s survey of senior leaders, which showed that a huge 82% of companies in the US and Europe have already deployed generative AI or expect to do so in the next 12 months. This shows strong appetite for the technology and the range of perceived benefits.
Deutsche Telekom is among the first operators to offer services to business customers based on generative AI. Its Business GPT tool aims to make manual working processes more efficient for companies of all sizes. Meanwhile, Telefonica and IBM are using generative AI to support Spanish companies’ digital transformation journeys, and Orange has launched two products to help organizations develop uses for the technology.
The ability of generative AI to interrogate complex data sets to create concise summaries means that, in theory, it could support operators in almost any area of their business. This could include network maintenance, monitoring for cybersecurity vulnerabilities or improving energy efficiency.
But operators must avoid unleashing generative AI into multiple parts of their day-to-day operations too soon or without adequate testing. Although it could, for example, free up time for network teams by monitoring individual sites and generating reports, it’s not able to make decisions using the same processes that a human engineer would employ.
Payback could take longer than expected, so I’d recommend against setting near-term expectations too high. That’s not easy amid inexorable hype, but telecom operators still have plenty to do to understand where the technology can help them and how it complements existing AI strategies. Careful, selective implementation should be the way forward.
Overall, I expect operators to find it much easier to employ generative AI to save money than to make money. It should quickly help them improve efficiencies through greater automation, partially in customer care, but using it to grow revenue in the enterprise market will prove a far tougher nut to crack.
To succeed in the business market, operators need to forge effective partnerships with some of the big tech firms that are at the cutting edge of developing the technology. But even then, they’ll face a stern hurdle to convince companies that the benefits of engaging with operators on generative AI are worth the investment.
As the report explores, generative AI is set to play an important role in telecom operators’ transition from pure connectivity providers to integrated technology companies. However, I believe it’s merely a tool to support this journey rather than an all-encompassing solution.
Successful operators are likely to be those that use it most effectively alongside other important technologies such as 5G, cloud computing and the Internet of things.
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