This article was first published in The Fast Mode.
Generative AI was the big tech story of 2023, and in telecoms, we’re starting to see CSPs use AI to improve operations. Additionally, the need to move beyond selling connectivity is driving CSPs to change in order to grow, impacting the technology they use to run their business. In this article, we explore four major trends for the telecoms industry in 2024.
1. Customer Care is the First Telco Use Case for Generative AI
Generative AI (GenAI) is topping lists of ‘things that will be big in telecoms’ for 2024. GenAI is wide-ranging and can be overwhelming. Indeed, there are a vast number of potential use cases in telecoms but not all will generate the same results in delivering business value.
One area in which GenAI can provide a quick win is customer care. Most consumers prefer calling CSPs when they have a question or issue. As for business customers, the majority don’t have a choice since many CSPs don’t offer B2B digital engagement channels, meaning they must get in touch via call centres.
Unfortunately, most customer problems aren’t resolved in the first call to customer care, and in telecoms, around 6% of customers hang up before even speaking to an agent. Clearly, this is an area that would welcome help. Furthermore, many CSPs have an average wait time of around 10 minutes, as listed on their websites.
I recently engaged with my CSP via chatbot whilst waiting to be connected to an agent. Before starting, a message stated that the CSP had a zero-tolerance policy towards abusive behaviour to its staff, which begs the question, how bad must things be when CSPs have to inform customers not to be abusive towards care agents?
Generally, people prefer speaking to humans when they need support, so it’s not a case of GenAI replacing the call agent, but acting as copilot, providing the agent with the information required to assist their customers, increasing first call resolution and call throughput that is clearly needed.
2. Digital Operators Buck the Trend of Slow Growth
According to an Analysys Mason report, the telecoms industry has been growing at 1% a year since 2017 and is set to jump to 1.8% between 2022 and 2027. Not exactly cause for breaking out the champagne, but this, coupled with the job cuts we’ve seen across the board in the technology sector and in CSPs, were no doubt influencing factors when the TM Forum report, Reigniting Telecoms Growth, a playbook for CEOs, stated the industry was at “code red.”
Still, the report also said that a truth in the industry is that “new business opportunities were not the same as they were in the past decade, the playing field has changed. CSPs must fundamentally rethink their operating structures to seize these opportunities.”
So brighter times are ahead for CSPs, provided they change how they run their business as the traditional model is no longer as effective as it once was. While many CSPs are struggling with growth and recognise the need to rethink strategies, others are forging ahead with change, delivering significant results.
VEON Group has a well-publicised digital operator strategy, having transformed their opcos from telecoms operators to digital operators providing a wide range of services to their customers. The results are impressive and many of VEON’s operating companies are enjoying double-digit growth.
Orange recently launched a super-app (Max it) in the Middle East and Africa which includes mobile banking (Orange Money) as well as a content marketplace. In countries where the majority of internet traffic is delivered to mobile devices, there is an opportunity for CSPs to grow their revenues by expanding their portfolios to offer more than connectivity.
VEON’s strategy was perhaps the pioneer here and due to its success, we are now seeing an increasing number of CSPs undertake digital transformations to provide the foundation to play an increasing role in the lives of their customers.
Many of the operators bucking the industry trend and achieving growth through selling digital services operate in countries with traditionally low ARPUs and limited fixed broadband penetration.
This creates the perfect opportunity to increase revenues through the use of mobile as the main delivery network for broadband services, growing a portfolio with additional digital offers and getting customers to engage using the mobile app, thus driving usage of the super-app.
However, implementing this requires a full transformation of the BSS operators need to run their businesses to have the right foundation to become digital operators.
3. APIs: Opening Up Networks and Systems to Partners
As CSPs enter new markets, develop new partnerships, and sell a wider range of offers, agility has never been more important. Fast time to market with a low cost to develop and launch new offers and processes - beyond connectively - is a driver for many CSPs as they look to evolve.
This means CSPs will need open systems that can quickly and cost-effectively integrate with others. This ease of integration is not just for their solution and content partners, their B2B customers plus B2B2X partners, but it also applies to the integration of the CSPs’ own systems.
For many years, CSPs have been using ESB (enterprise service bus) as a centralised software component to enable integrations between software applications. This worked well up to a point.
As the number of systems that needed integration increased, so did the bottleneck of teams waiting their turn - and the costs to support them. For CSPs looking to integrate more and more systems and make their stacks open to their partners, this is becoming an IT, organisational and financial headache.
To move away from a legacy-based ESB architecture to a decentralised, microservices-based approach, innovative CSPs are now implementing API Hubs, a set of tools and practices to effectively manage a telecom BSS API ecosystem. It serves north-side channel and engagement layer clients and connects them to south-side systems of record, network services, and partners.
One of the benefits of microservices is that it enables decentralisation and independence, providing a solution to the problems centralised ESB were encountering as telecoms evolved, and will become increasingly popular as CSPs open up their networks and systems to partners to enable B2B2X models and keep pace with the demand and speed of integrations.
4. No/Low Code BSS and More Agile CSPs
TM Forum called no/low code configuration ‘the next big thing’ in BSS. According to their July 2023 survey, only 8% of agile CSPs have invested in no/low code configurability, but a massive 78% have this in their next three investment areas. The main reason for this is to increase agility.
Agility is often measured by time to market, which refers to how long it takes a CSP to get a new offer set up on BSS and monetisation systems and launch it. This takes anywhere from under a week to two months.
Introducing new offers requires change to the BSS, which for some, involves configuring rules and parameters with no coding involved. For others, it involves getting the vendor to do code changes, adding time and cost.
It’s no coincidence that this new investment focus comes at the same time that CSPs start to roll out 5G SA, turn their attention to selling other ‘beyond connectivity’ services, enter new vertical markets, and explore new B2B2X business models. Embracing these new opportunities will require a step change in BSS agility.
