GenAI early adopters transform how telecom competes and delivers value
The telecommunications industry is at a tipping point due to market changes. Stagnant revenues, fierce competition and high capital expenses have eroded profit margins for a sector still vital to billions of consumers and businesses.
Telecom firms are now poised for a new era of growth powered by Artificial Intelligence (AI) and especially Generative AI (GenAI)—the iteration that learns and creates novel content. GenAI models learn the patterns and structure of the data and then generate unique data that has similar characteristics.
GenAI as a market disruptor
McKinsey & Co. estimates that novel GenAI use cases could generate $60 billion to $100 billion in new revenues for the telecom sector. Furthermore, Lumen Technologies, a leader in metro connectivity and data transport at the edge, announced this summer that GenAI demand will drive $5 billion in new business, prompting it to establish a new Custom Networks Division to support this growth.
These trends point to GenAI’s potential to be a transformative force in redefining how telecommunications firms, from KPN and Telstra to Telefonica and T-Mobile, operate, compete and deliver value. In fact, telecoms globally already attribute GenAI to helping drive double-digit improvements in everything from marketing conversion rates to call center agent productivity. It’s also pivotal to delivering the next generation of telecom services, particularly for 5G and Internet of Things deployments.
GenAI offers telecom providers new market advantages beyond the industry’s longstanding focus on chatbots. It represents the new network layer for telecom, crucial to enhancing how telecoms elevate customer service and their speed to market.
The Power of AI in Telecom
As the infographic below illustrates, AI touches every aspect of today’s communications enterprise, delivering compelling value across the back end and front end of operations, and even extending to the supply chain.
Telecommunications early adopters see GenAI as a crucial tool. Instead of replacing staff, it has helped them work more strategically, allowing employees to focus on higher value-added activities.
For instance, Orange, the French-based global telecom giant, has deployed Microsoft 365 Copilot, Microsoft’s GenAI tool, extensively in areas such as marketing and field intervention. Keying off the industry-wide challenge of delivering consistent customer service, Orange used Copilot to rewrite 30,000 customer FAQs to sound more empathetic, which contributes to callers feeling more “heard” and thereby, more supported. Copilot has dramatically accelerated how quickly Orange software teams develop lines of code and allowed after-sales service teams deploying fiber to respond to customer inquiries 85% faster—calls that previously took 20 minutes are now handled in less than three minutes, on average.
Orange isn’t alone in finding powerful business value from GenAI. Following a successful pilot, Vodafone, which has more than 330 million mobile and broadband customers and around 100,000 employees, increased its Microsoft Copilot licenses from 300 to 68,000 across its business. As an early adopter of the GenAI tool, Vodafone used Copilot to deliver a super-agent capability to its contact center staff, where they could understand all the previous interactions with customers. This tool allowed them to have better customer conversations, which in turn, has resulted in dramatically higher Net Promoter Scores for customer satisfaction. Copilot also gave network engineering and planning teams knowledge of when base station leases would expire. This intelligence improved Vodafone’s network planning, resulting in a higher quality network and a better customer experience across its mobile phone user base. Even the firm’s Legal & Compliance team considers it a major time saver, with Copilot helping the group analyze, draft and renegotiate contracts.
Lumen customer service teams also are using Copilot to provide better customer experiences. Rather than replacing staff, the AI engine allows employees to work smarter by simplifying workflows.
For its healthcare users, Lumen leverages AI to enhance network connectivity, agility and security, while enhancing patient experiences and outcomes. It also provides critical support to clinical teams. Lumen’s scalable and secure backbone allows healthcare organizations to focus less on IT management and maintenance and instead exploit AI to drive new innovation.
Frontline responsiveness
Similarly, Australia-based Telstra has dramatically improved its service resolution rates thanks to two in-house GenAI solutions, Ask Telstra and One Sentence Summary. The company finetuned its Ask Telstra tool to the company’s vast internal knowledge base to put the necessary data at the fingertips of customer service agents. It combines the intelligence of Azure OpenAI service with the precision retrieval capability of Microsoft Azure AI Search.
One Sentence summary uses Microsoft Azure OpenAI’s large language model to transform customer notes, recent interactions and transactions into a summary of that customer’s history and status. Telstra trialed the tools in 2023, with initial results showing 90% of employees saved time and increased their effectiveness, leading to faster resolutions and 20% less follow-up contacts.
Conclusion
Looking ahead, the AI revolution comes at a key moment in the telecom industry. As Telstra, Orange and other early adopters have shown, GenAI will continue to be at the forefront of telecommunications’ digital-first transformation, helping reshape the industry, driving new innovation and improving service and customer experiences.