Telcos Need Ecosystem Partnerships to Seize Back-Office AI Use Cases as Internal Frictions Hinder Adoption

04 Jan 2024

Artificial Intelligence (AI) offers telecom operators a sizeable opportunity to transform operations. However, given inherent technology risks, early, accessible use cases will be mostly constrained to the back-office in customer services, marketing, sales, and network support. Furthermore, telcos face significant deployment challenges, making adoption slower than in other verticals. According to a new report by global technology intelligence firm ABI Research, competition, ecosystem partnerships, and, eventually, standardization will unlock telco AI value.

Although networking use cases will create value, and some will be deployed, the technology and telcos are not (yet) ready to make this jump. The back office aligns closely with AI use cases and has human touch points to mitigate its risk profile. In addition, compared to the network, back-office deployment offers a better commercial model with cross-vertical shared innovation and a more apparent return on investment model (time saved, headcount reduced, lower customer churn).

Reece Hayden, senior analyst at ABI Research, explains, "Back-office use cases make most sense, but it does not mean that they are simple for telcos to deploy. Telcos have highly siloed internal structures, significant knowledge gaps, and data challenges that will stand in the way of effective implementation.”

Early telco market leaders have developed partner-led solid strategies to navigate AI. Among these are e& (formerly Etisalat), who support their three-step GenAI integration strategy with Netcracker and DataRobot as partners.

However, the rest of the market remains in the very early stages of deployment and still faces significant commercial and technical questions. Hayden points out, "Most telcos still need to figure out who to partner with. Three key players are building strong telco value propositions. OSS/BSS vendors are rolling out GenAI capabilities built on their strong telco expertise, hyper scalers are relying on their AI expertise and market-leading models, and AI leaders like Anthropic are playing a more niche role as they try and define their commercial proposition.”

Telco planning, preparation, and implementation should be underway already, and securing strong partners will help open doors quickly and enable a long-term operational transformation. ABI Research expects that hyper scalers offer the best long-term proposition. Still, Operations Support System (OSS)/ Business Support System (BSS) vendors will undoubtedly compete, especially if they continue to develop their GenAI platforms. Beyond commercial partnerships, coop-etition will be a powerful force as it solves data availability and accessibility challenges for specialized use cases.

“However, the result will not be achieved through coop-etition and partnerships alone. Instead, as with most telco opportunities, ABI Research expects standardization to be key (like those defined in 3GPP). This process will help overcome the cost and deployment challenges, which are all too familiar to telcos,” concludes Hayden.

These findings are from ABI Research’s Defining Telco Strategy for BSS/OSS Artificial Intelligence Transformation report. This report is part of the company’s AI and Machine Learning research service, which includes research, data, and ABI Insights.

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

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