By Susan White, Senior Director, Strategy, Netcracker Technology
For telcos, transitioning into a fully digital entity is no longer a luxury; it is a necessity. The move towards digitalization is driven by the need to drastically improve customer experience, modernize infrastructure, innovate faster and ultimately uncover new revenue streams—even beyond telecom. However, this transformation is fraught with challenges, as the industry grapples with issues that include low customer satisfaction, patchy automation, escalating costs and, more recently, the increasing pressure to meet important sustainability targets.
The Race for Digital Nativity Has Its Challenges
While digital transformation initiatives have been underway for years, many telcos are realizing that piecemeal efforts—upgrading only select components of their technology stack at a time—are not delivering the necessary results. The problem isn't that digital transformation is not happening, but rather that it's happening in isolated pockets, leading to fragmented systems and suboptimal outcomes.
- Customer Experience (CX) and Satisfaction: Telco customer satisfaction scores are not yet where they need to be for a digital company. This is mostly due to the result of poor customer service, issues with service quality, and reliability stemming from an inability to correlate relevant data fast enough from the network, customers, and services. Despite investing in customer-facing technologies such as apps, chatbots and self-service portals, these isolated upgrades have not significantly improved the overall customer experience.
- Patchy Automation: Many operators have begun automating certain processes, but the results have been inconsistent. With legacy inventory systems still in place and patchy automation in silos, the impact on efficiency and agility has been minimal. This fragmented automation is risky and leaves the business vulnerable to inefficiencies and higher costs, especially with the growing complexity of managing 5G core and IoT.
- Reliance on IT: Business users still rely heavily on their IT departments to implement changes, such as launching new offers, updating pricing models, or visualizing data in specific ways. Piecemeal digital upgrades that fail to democratize data access and decision-making for business users limit the effectiveness of transformation efforts, ultimately slowing down the business. Without empowering non-technical teams with the tools they need to move quickly, telcos will struggle to stay competitive in a fast-changing market.
- Cybersecurity Risks: With the transition to digital and cloud platforms, telcos are becoming increasingly vulnerable to cyberattacks. The rise of IoT devices connected via 5G networks introduces new vectors for attacks, putting both infrastructure and customer data at risk. Without an integrated security framework that spans the entire digital transformation, telecom operators remain at risk of costly breaches and data leaks.
Given these challenges, there is an urgent need for telecom companies to accelerate their digital transformation efforts. Yet, they face the new dilemma of ensuring a sustainable experience while driving growth.
Balancing Modernization and Sustainability
As telecom operators push forward with their digital transformation agendas, they are faced with the unique challenge of balancing the need for modernization with the requirement to meet sustainability targets. This dichotomy is forcing telcos to rethink how they approach both business growth and environmental responsibility.
- Modernizing Investments: The rollout of 5G, the expansion of fiber networks, and the transition to digital-first operations requires significant expenditures and new skills. These investments are necessary to stay competitive and meet customer expectations in an increasingly digital world.
- Sustainability Imperatives: On the other side of the equation, telecom operators are under growing pressure to meet sustainability goals. The telecom industry is responsible for 1-2% of global CO2 emissions, and energy consumption accounts for 20-40% of their operational expenses. Reducing emissions, becoming carbon-neutral, and lowering water and energy usage are now key priorities. Yet, the new technology and energy requirements needed for modernization can conflict with these sustainability goals, creating a tension that is difficult to resolve.
In this context, AI emerges as a powerful tool to solve the digital transformation dichotomy, enabling telcos to achieve both their modernization and sustainability objectives simultaneously.
How AI Can Help Solve the Digital Transformation Dichotomy
AI and GenAI are uniquely positioned to address both sides of the digital transformation dichotomy, helping telecom operators accelerate their modernization efforts while also driving sustainability. Here's how:
- AI Closes Automation Gaps
AI is crucial to closing automation gaps in telecom because modern networks are becoming increasingly complex, especially with the advent of 5G, network slicing, and edge services. These technologies require intricate planning, design, and ongoing management, making traditional automation insufficient. AI, together with GenAI, can handle this complexity by enabling more efficient network planning and design, optimizing network performance, predicting, and resolving issues in real time, and dynamically allocating resources to meet changing demands.
AI’s ability to process vast amounts of data and adapt in real-time makes it indispensable for managing this complexity while also ensuring sustainability by optimizing energy use and reducing waste. Without AI, the growing intricacy of networks would overwhelm existing automation systems, leaving critical inefficiencies unresolved.
- AI is the Only Way to Personalize the Customer Experience
AI is crucial for enhancing customer experience in telecom by enabling a 360° customer view, which integrates data from multiple touchpoints—such as mobile usage and billing—into a comprehensive profile. This foundation allows AI to drive personalization, offering tailored services and recommendations based on individual preferences.
GenAI assistants further enhance customer care and sales by handling complex queries, providing real-time solutions, and recommending services, improving response times. AI also enables proactive issue resolution by predicting potential problems, such as network disruptions or billing errors, and addressing them before they affect customers. These AI-driven capabilities ensure a more personalized, efficient, and proactive customer experience, boosting satisfaction and loyalty.
- AI as a Catalyst for Sustainability
Sustainability is a growing priority for telecom operators, and AI can play a pivotal role in helping them meet their environmental goals. Here's how:
- Energy Efficiency: AI can monitor and optimize energy usage across telecom networks, reducing waste and lowering operational costs. For instance, AI can dynamically adjust power consumption based on network demand, ensuring that energy is used more efficiently.
- Reduced Emissions: AI can help telecom operators identify opportunities to reduce their carbon footprint. By analyzing data from across the organization, AI can pinpoint areas where emissions can be reduced, whether it be through more efficient use of equipment or changes in operational practices.
- Sustainable Supply Chain: AI can also improve the sustainability of telecom supply chains by optimizing logistics, reducing waste, and ensuring that materials are sourced responsibly.
- AI Beyond Connectivity: Enabling New Business Models
Telcos are increasingly looking to diversify their revenue streams beyond traditional connectivity services. AI can unlock new business models and tap into the following adjacent markets:
- B2B Services: AI can drive growth in the B2B sector by enabling more efficient and personalized services for business customers. For example, AI can help telecom operators offer tailored solutions for industries such as healthcare, manufacturing, and smart cities.
- IoT and Edge Computing: AI can enhance the capabilities of IoT and edge computing solutions, allowing telecom companies to offer new services that go beyond connectivity. By leveraging AI, telcos can create smart solutions for industries such as transportation, energy, and agriculture.
- Strengthening Telecom Security with AI
AI plays an important role in securing telco networks, services, and customers by providing real-time threat detection, predictive analytics, and automated response capabilities. By continuously monitoring vast amounts of data, AI can identify unusual patterns and potential cyber threats before they escalate, allowing for quicker, more effective mitigation. Additionally, AI-driven automation helps patch vulnerabilities across both legacy and modern systems, reducing human error and response times.
Integrating AI into a comprehensive security framework ensures that all layers of the telecom network, from edge to core, are protected, enabling operators to defend against increasingly sophisticated cyberattacks while minimizing operational disruptions.
Also Read: Netcracker’s New Broadband Solutions for CSPs
Unlocking the Full Potential of Digital Transformation with AI
As telecom operators navigate the complexities of digital transformation, AI emerges as a critical tool to resolve the digital transformation dichotomy. It accelerates automation, enhances customer experience, drives sustainability, and enables new business models, positioning telecom operators to achieve both business growth and environmental responsibility.
However, to fully harness AI’s transformative potential, it must be implemented cohesively across the organization rather than in isolated silos. A holistic integration of AI can unlock its full benefits, driving innovation, operational efficiency, and long-term growth while ensuring a sustainable, forward-thinking approach to business operations.
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