Telcos in APAC Are Betting on AI to Gain a Competitive Edge

Compelling use cases are encouraging telecommunications companies in Asia Pacific (APAC) to invest in, adopt and implement artificial intelligence (AI) solutions at a faster pace than other sectors.

The telecom industry is investing heavily in AI. Investment in this sector is expected to touch US$2.5 billion by 2022, at a compounded annual growth rate (CAGR) of 46.8 percent between 2017 and 2022, and APAC is expected to show the highest CAGR during this period.

A recent study, Artificial Intelligence is Critical to Accelerate Digital Transformation in Asia Pacific, published by Forrester in partnership with Appier, points to the high adoption of AI in the IT and telecom industry in the region. Sixty-four percent of the respondents from the telecom sector say that they are already implementing AI solutions within their businesses. This adoption rate is well ahead of other sectors in the region.

The Impact of AI on Functions Across Enterprises

AI today is impacting every function within an enterprise, from research and product design to sales and customer service.

In one study, 32 percent of decision-makers surveyed believed that by 2020, AI’s greatest competitive impact will be on sales, marketing or customer service. The 2017 Boston Consulting Group (BCG) – MIT Sloan Management Review study “Reshaping Business With Artificial Intelligence” states that customer-facing activities, such as marketing automation, customer service, and support services, will be most impacted by AI over the next five years.

AI has a lot to offer the telecom industry in particular, across different aspects of the business. Telecom operators have access to mind-bogglingly vast amounts of customer and network data. Using AI, they can make sense of this data at a granular level and access rich insights to improve customer service, boost operational efficiency and introduce new revenue streams.

As the Forrester study finds, the telecom sector in APAC aims to use AI in innovative ways in order to stay competitive and flexible, so they can better anticipate and respond to market changes. Additionally, telcos aim to speed up the generation of customer insights and improve existing products and services.

Using AI to Enhance Customer Service and Improve Marketing

Undoubtedly, the fastest growing and most visible use case for AI in this industry is customer service. Telecom companies around the world are using automated chatbots to streamline customer operations and applying machine learning algorithms to make customer service more seamless and cost-efficient.

For example, Ask Spectrum – Spectrum’s AI-powered virtual assistant – can help customers with their questions around their account or Spectrum’s services, and can even help troubleshoot issues. In 2017, Vodafone launched its chatbot TOBi, which simulates human conversation, and live chats with customers to respond to their questions. Closer home, Indonesian telco Telkomsel now only employs chatbots to answer most customer queries.

AI can also be immensely valuable in sales and marketing functions, by creating a personalized user experience and boosting customer engagement and retention. Telcos can use AI tools to analyze users’ preferences, interest areas and past purchase patterns, profile subscribers, and map these onto typical conversion rates to make personalized and relevant recommendations. AI-powered insights can help them recommend the appropriate packages to users, and push these to them at the right time – for example, marketing an add-on package when customer data shows that the subscriber is close to using up their data quota for the month.

Applying AI in Operations

However, the customer angle is only one half of the story. AI can also find application in network optimization and predictive maintenance. AI-powered algorithms monitor network data to detect problems as they occur in real time, and help in quick and efficient resolution. AI can enable a network to self-heal, self-optimize and self-learn, and make decisions autonomously. This ability to detect and solve potential issues before the customer is even aware of them, leads to proactive and enhanced customer service. Additionally, telcos can offer better service delivery through better network performance and improved reliability.

Take the example of SK Telecom, considered a pioneer in the use of AI through the implementation of Tango, its AI-powered network operation system. Used across all of SK Telecom’s telecommunication networks, Tango uses machine learning to analyze network traffic information and optimize network operation.

There are various such examples of how telecom companies all around the world are successfully using AI and machine learning within their operations, but AI implementation in this sector is not without its challenges.

Challenges to the Rapid Adoption of AI

Different studies, including the Forrester report, point to the prevalent barriers to AI adoption across enterprises, including those in the telecom sector. These include:

  • Difficulty in attracting and developing skilled resources that can implement cutting-edge AI solutions and transform business
  • Difficulty in building a skilled and agile cross-functional team to work with AI solutions
  • Security concerns around the adoption of AI solutions
  • Internal resistance to change within the organization, especially given the popular notion that AI replaces people
  • Lack of leadership support for AI initiatives, and competing priorities for investment

With AI offering unprecedented opportunities to obtain effective insights into customers and operations, telecom companies in the region are focusing on finding a way around these obstacles in order to accelerate their digital transformation and stay ahead of the competition.

 

* For more insights into AI adoption across different industries, read our industry-focused infographic and the full Forrester study.

Accelerate Digital Transformation With Artificial Intelligence in APAC

As customer expectations continue to intensify in an increasingly competitive environment, companies can stay ahead of the curve only by adopting the latest and best that digitalization has to offer. For those frenziedly pursuing a digital transformation agenda, artificial intelligence (AI) has the potential to positively impact the way they do business.

A new commissioned study conducted by Forrester Consulting on behalf of Appier shows that AI has a critical role to play in accelerating digital transformation in Asia Pacific (APAC). Companies are well aware of the powerful insights that AI can generate. More importantly, they are testing how they can use AI to transform their business models and enhance experience across the entire customer life cycle.

The June 2018 study surveyed 260 business and IT leaders across eight markets (Japan, South Korea, Singapore, Taiwan, China, India, Australia and Indonesia) who are directly responsible for technology purchasing decisions.

Covering the key industries of telecom, insurance, banking, IT and retail, the study threw up some interesting insights on how companies perceive AI’s role within their businesses.

Some of the key benefits that companies are expecting by using AI tools are:

  • Easily discover relevant prospects, and boost chances of conversion
  • Improve customer interaction using deep insights into customer behavior
  • Maximize customer value, offer an enhanced user experience and improve customer loyalty
  • Optimize the marketing mix to improve ROI
  • Personalize digital experiences

Streamline Operations and Offer an Enhanced Customer Experience With AI

In a customer-obsessed world, 71 percent of respondents were surprisingly clear that AI would primarily help them improve efficiency of operations, while 59 percent spoke of improved scalability.

Respondents also expect that AI will improve the digital customer experience by helping companies deliver smarter and more personalized service. More than half of them expect that AI will help better predict customer behavior better and 45 percent are convinced of the deep consumer insights they can gain.

Investment in AI is Still Nascent

Yet, the study found that when it comes to investing in AI technologies, companies in the region are still in the nascent stage. Most respondents are investing in data management technologies and platforms in a bid to first build a strong base for future digital growth and their AI journeys.

For instance, 61 percent of respondents are investing in enhancing their data security and privacy capabilities while 57 percent are investing in data cataloguing solutions for analytics. Only around half of the surveyed companies are investing in AI solutions that improve customer view across digital channels and even less are using insights to build data-driven AI applications.

The reason for this seems to be the challenges APAC firms face around gathering and integrating big data, as well as building the right predictive analytics platform for their needs. While these challenges demand that firms invest in data management technologies, an insufficient focus on core-AI technologies such as computer vision and natural language processing could cause AI adoption to slow down.

Prioritizing Business Objectives to Build Relevant AI Journeys

Investment may be slow in coming but companies are already building their business plans based on what they hope to achieve using AI. The IT and telecom industry, for example, are prioritizing AI solutions that will allow them to predict market changes better while the FSI segment is looking to improve the accuracy of customer behavior prediction. Retail firms want to use insights gathered through AI to develop new products and services.

The Forrester study points to the immense potential that AI holds for APAC companies, which can use this technology to address core business objectives of streamlining operations and enhancing the customer experience.

Companies in the region are also expected to leverage AI to deliver business value at every stage of the customer lifecycle, from prospecting to upselling and retaining loyal customers.

For a more in-depth analysis of how companies in the region are using AI, download the complete study here.