Gone are the days when telcos were limited to offering basic solutions like phone and internet service. Today, the telecom industry is at the forefront of the widespread use of advanced technologies driven by Artificial Intelligence (AI), 5G and the Internet of Things (IoT).

This growth is expected to continue as AI becomes increasingly integrated into telecommunications to support networks and customers on a large scale

According to Valuates, the global AI in telecommunication market size is projected to reach $14.99B by 2027, growing at a CAGR of 42.6% from 2021-2027.

Leading telcos are already leveraging AI, machine learning (ML), and natural language processing (NLP) to simplify operational complexities, optimize network performance, improve the customer experience, and increase revenue. To stay competitive, telcos must keep up with evolving technology and the pioneers driving its adoption.

Read on to learn more about the widespread adoption of AI in the telecom industry, the benefits of using the technology, and which use cases are driving the adoption.

The telecoms industry is currently in a transformative phase, navigating a landscape where customer engagement and service delivery are being redefined.

Telcos are striving to become techcos, offering a wide range of cloud-based tech solutions. This shift allows them to cater to the needs of both businesses and consumers in a more efficient and convenient manner.

At the forefront of this transformation comes the adoption of AI, making it a top priority for communications service providers (CSPs).

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While the global market for AI in telecommunications is growing rapidly, many businesses are struggling with the complexities of implementing AI. Beyond recognizing the need for AI and finding suitable use cases, there is a range of challenges that CSPs must overcome to leverage AI effectively.

1. Managing large amounts of data: Telcos generate a large amount of data from their extensive customer bases over the years. This includes call records, customer data, and network performance data.

Managing and organizing this data for AI can be difficult, especially with siloed systems and legacy infrastructure. To overcome these challenges, telcos need a unified customer data platform that can solve the issue of data fragmentation.

2. Lack of technical expertise: Telcos struggle to find professionals skilled in data science, machine learning, and AI algorithms, making it hard to recruit and retain talent. Training existing employees in AI can be time-consuming and expensive. This is why you must prioritize talent acquisition and invest in training programs to build a capable AI workforce.

3. Data privacy and security: Telcos generally handle sensitive customer information and must comply with data privacy regulations. Implementing strong security measures and ensuring ethical AI use are important.

To address privacy and security concerns, you need to invest in privacy-enhancing technologies, governance frameworks and data security solutions like two-factor authentication (2FA) and Mobile Identity.

4. Integration with existing systems: Integrating AI solutions with legacy systems, applications, and networks can cause compatibility issues. Careful planning and ensuring compatibility with existing systems are critical for the successful integration of AI.

5. Balancing the budget: Telcos have already invested heavily in infrastructure and digitalization. This has caused a financial problem for telecom companies, who are now looking for cost-effective strategies to improve their finances. AI can help by providing efficiency gains.

6. Meeting customer demands: With customers increasingly demanding better services and experiences, telcos must invest in advanced AI chatbots to automate and personalize customer interactions and deliver tailored offers and support.

Having examined the telecom industry’s key challenges, let’s explore the benefits of integrating AI and how it drives growth.

Without a doubt, telcos are seeing significant benefits from using AI technology. As mentioned above, this technology is used to answer several industry challenges. And like any other technology, AI is expected to grow and develop in the coming years, especially in the telecom industry.

A key driver for this growth is an increasing demand for network solutions that can operate autonomously. By utilizing AI-driven network solutions, telcos can:

 In fact, AI will be mandatory for telecom businesses to run efficiently in the future. Here’s why:

Source: The Fast Mode and Netguru

The impact of AI in the telecommunications industry is evident in improved operational efficiency, as recognized by 70% of telecom companies. Customers also have a better experience with AI-powered interactions, with 65% expressing higher satisfaction.  

These positive outcomes have led to 55% of telecom companies planning to introduce new AI-powered services in 2024, reflecting a trend towards diversification and exploring new sources of revenue.

With its transformative capabilities, AI drives innovative use cases that optimize network performance, enhance customer experiences, and drive revenue growth. Let’s find out how.

AI algorithms monitor large volumes of network data in real-time. This allows you to reconfigure networks and identify and address potential threats. AI systems can modify network settings and redirect traffic to safer routes when local equipment fails, or channels become congested.

AI in telecom excels at detecting and preventing fraud. By analyzing real-time call and data transfer logs, anti-fraud analytics systems powered by AI and ML can identify suspicious patterns and immediately block corresponding services or user accounts.

Artificial intelligence automates and streamlines various critical processes in the back office. This leads to reduced costs and more efficient planning, resulting in a higher return on investment (ROI), more funds for capital expenditure (capex) investments, and enhanced customer satisfaction.

Integrating AI with 5G allows you to expand you product and service offerings, collaborate with other industries, and contribute to developing smart cities and industries through improved connectivity and data exchange.

AI virtual assistants are helpful tools that telcos can use to improve their customer service. AI-powered chatbots, for instance, can be used to respond to customer inquiries and resolve problems without requiring human involvement. This enables customer service agents to concentrate on more complex matters.

An AI-data platform can analyze various types of data, such as customer information, service usage, and billing data. With AI’s ability to predict customer needs in real-time, you can provide the right offer at the right moment through the right channel.

This results in increased revenue, subscriber growth rate and average revenue per user (ARPU) through smart upselling and cross-selling opportunities.

Telcos are undergoing a transformation by collaborating with cloud communication platforms to become techcos—a telco focused on technology.

More specifically, techcos combine automated, cloud-native networking with next-generation services to enable data-driven conversational journeys over the customers’ preferred channels.

Communication now extends beyond traditional SMS and voice. Instead, telcos are joining forces with cloud communication platforms to offer omnichannel solutions. For example, allowing delivery companies to send notifications via chat apps like WhatsApp with a fallback option to SMS.

This type of partnership enable telcos to sell and utilize CPaaS solutions. Operators can enable end-users to perform actions like topping up accounts, making bill payments, and exploring the latest offers through chat apps like WhatsApp, Viber, Google Business Messages, Messenger, and Rich Communication Services (RCS).

For example, our partnership with Vodafone Italy allows them to enhance their revenue by selling our solutions to their customers either as part of their network services or bundled packages.

However, expanding the number of channels alone isn’t enough. Data plays a vital role in delivering experiences that not only delight customers but also increase revenue per user. Hence, a customer data platform that integrates channels, chatbots, and customer engagement solutions is essential.

Infobip’s platform, with over 800 direct operator connections globally, continues to experience growth on telco-native channels (SMS, MMS, Voice, RCS). Our omnichannel security solutions and global scale will help you transform CX and secure the mobile ecosystem.

Partnering with us means unlocking endless opportunities as we co-create solutions to digitally transform your business and build a thriving conversational future for your enterprise and SMB customers.

Through our global experience and local presence, we provide best-in-class service and solutions in more than 75 offices worldwide. Our CX consultants are here to help you reach your full digital potential on popular messaging channels and chat apps.

Telcos that offered our CX solutions to their customers were able to generate new revenue streams, expand product capabilities, and continue to improve customer satisfaction – all through a single conversational AI platform.