The CSP industry is transforming with AI and automation, despite some skepticism and challenges
CSP leaders are making significant investments in generative AI to enhance operational efficiency and customer experience
Deployment challenges remain, including a shortage of skilled professionals, data privacy/security concerns and unclear ROI
A recent survey from Fierce Network explored the communications service provider (CSP) industry's undergoing metamorphosis driven by artificial intelligence (AI) and automation. As with any new technology, there are skeptics and challenges, but still noteworthy is how far along many telcos already are in implementing automation and AI.
Overall, CSPs are making serious investments in these technologies, the survey of 130 CSP leaders showed, focusing particularly on generative AI (GenAI) to manage unstructured data and enhance operational efficiency across business areas.
AI-driven automation in network operations can streamline troubleshooting, maintenance and optimization, resulting in more reliable networks with reduced downtime and proactive issue resolution. CSP leaders touted AI and automation for enhancing customer experience through AI-powered chatbots, virtual assistants and personalized services, making room to boost revenue and customer satisfaction in the CSP market.
AI is critical for most CSP leaders, skeptics remain
According to many survey respondents, they now see AI and automation as crucial for future business success. Over a third of respondents consider these technologies "critical for survival and maintaining competitiveness," while nearly half view them as important, among other key technological advancements.
However, not all CSP leaders are convinced. One in 10 see the technology as useful but not a game-changer, and 5% are uncertain about the impact of AI and automation. A small number (3%) believe these technologies will have limited impact, citing reasons such as better returns on other investments, immature technology and high costs.
“While we disagree with the skeptics, we respect their thinking,” Mitch Wagner, executive editor, research, Fierce Network, wrote in the the full report. “The best CSP leaders are innovative but also cautious. Indeed, after years of hype in the technology industry about metaverse, Web3, crypto, blockchain — and in telecom Iridium satellite phones, WiMax and 3D TV — any prudent person is skeptical of the next so-called revolution.”
Still, nearly three-quarters of respondents prioritize AI and automation in their spending plans. A little under a fifth of respondents rated these technologies as a top priority, and more than half said they are a high priority, balanced with other investments.
High adoption rates, but not without challenges
A substantial amount of CSP leaders surveyed said that their AI and automation efforts are already well underway, which is impressive given the backdrop of previous, slow-moving tech fads.
Nearly three-quarters of survey respondents are actively integrating AI and automation into their operations. More than half have already fully or partially incorporated these technologies into their tech stacks.
Looking ahead, over half of the respondents expect a significant boost in AI and automation deployment in the next two to three years, while more than 40% foresee a moderate increase.
“Even many current skeptics see themselves as ready to jump in soon,” the report said.
Despite all that enthusiasm, CSPs face some challenges in integrating AI and automation. The biggest hurdles include integration with existing systems, a shortage of skilled professionals, data privacy/security concerns and unclear ROI. Nearly three-quarters of CSP executives cited integration difficulties, and nearly two-thirds noted a skills shortage.
Additionally, telcos are moving slowly in bringing AI to the network core, according to executives at Intel and Microsoft. Once the industry gets moving, telcos could well lead the global AI revolution, Silvia Candiani, VP of Microsoft’s telco and media business, told Fierce Network at Mobile World Congress in February. “Telcos are number one, the center of the digital system of every single country,” she said.
AI already making an impact
AI and automation are already making a significant impact for some providers, particularly in network operations and customer experience. Nearly three-quarters of survey respondents report the biggest impact in network operations, while nearly two-thirds see a significant impact on customer experience.
Deutsche Telekom is one company that has implemented AI to enhance customer experience. The telco is working with Uneeq, a company based out of Auckland, New Zealand, which has developed a “digital human” — a CGI-based character that customers can talk with to get problems resolved. “Max,” the digital human, has a 10% better success rate at solving problems than a chatbot, handling about 10,000 queries a month and growing.
Looking ahead, CSPs plan to expand the use of AI and automation, with more than half expecting a significant increase in deployment over the next two to three years.
More than a third of CSP leaders responding to our survey are using AI and automation for real-time network optimization, more than a quarter using the technologies for automated fault detection and resolution, nearly a quarter for predictive maintenance. Almost one in 12 for capacity planning and management, and nearly one in 13 are not leveraging AI for network performance just yet.
Download our latest research report "Telecom automation and AI: Let’s get real" here.