AI is now a top priority for telecom companies, with investments expected to soar in the coming years. According to Precedence Research, the global AI in telecom market is projected to grow over 40% annually, reaching $42.66 billion by 2033. But where are these investments going?
In this interview, Silvia Candiani, Vice President of Telecommunications, Media and Gaming at Microsoft, shares her thoughts, diving into the key challenges, emerging trends and opportunities telecoms face as they adopt AI and new technologies.
“AI has really become pervasive throughout the entire value chain of a telecom operation,” she explains, highlighting its impact on everything from customer service to network analytics and complex B2B applications.
She also discusses the need for telecoms to break down silos and remove information bottlenecks, emphasizing how the integration of the cloud and AI can be the key to driving this change.
As the discussion evolves, Candiani draws parallels between the rapid evolution in telecommunications and industries like game development – another sector where Microsoft is heavily involved – highlighting how lessons learned in one field can benefit the other. Additionally, she shares exclusive insights into Microsoft’s AI tool, Copilot, and its potential for telcos, while stressing the importance of prioritizing security in AI-driven operations.
To hear from a company at the forefront of telecom innovation, listen to this full exclusive interview with Microsoft’s VP of Telco and Media!
Stephen Saunders:
I guess the big question which I have for you and Microsoft is, how are telcos using AI today? I have been hearing an awful lot about things like chatbots and improving customer service. I'm not terribly interested in those uses of AI. Are there other, more compelling uses of AI in telcos?
Silvia Candiani:
AI has really become pervasive throughout the entire value chain of a telco operation, and yes, we've seen the biggest adoption in customer service, but it's by far not the only place. For example, it is getting more and more used in the network space to even analyze data coming from the network, and prevent failover, and actually be able to guide people in the overhaul of the operations of the network.
Another area which is very big is all the marketing and safe. So helping customize the right message for the right customer, even creating the collateral and the communication for social media, for email, CRM, and then up to the more complex cases with the B2B sellers that they're now able to understand who they're going to meet with, and therefore create a pitch and an offering, and then get into transforming even into a proposal in a matter of a very short time. So, I would say really going across every role in the telco, and providing that level of intelligence and fast drive to outcomes.
Stephen Saunders:
It seems to me that there's sort of an incompatibility structurally with telco and cloud because telcos traditionally have operated in silos. They're famous for operating in silos, but cloud is more like, well, it's like a cloud. Do you think that the telcos are breaking down those silos and starting to genuinely be more cloudified, or is that structure which they've had for a long time holding them up?
Silvia Candiani:
Trying to connect the dots across all the different telco divisions is a major trend, and there are ways to do it in the cloud that then enable the AI to perform at best. What I see in most telcos is a hybrid approach. What you say is also super important, so we do see as a key trend the need to connect data across some of the different silos. So maybe you don't put everything into one place, but you want to make sure that you break the information blockage, and you really make a data connect across a different, let's say, areas of the company to understand whether, for example, customer churn is connected to a network performance, or to connect the data from content consumption together with revenue performance.
Stephen Saunders:
My experience with telcos over the last, well it's a long time, is that they move very slowly, but cloud of course is all about speed. Has Microsoft been disappointed with the speed at which telcos have adopted cloud, and are we at the point of, at that point in the hockey stick where it all just takes off? Or are we still going to have to wait a little while before it's fully adopted by tier one telcos, for example?
Silvia Candiani:
No, as I said before, we do see an acceleration, and I think we probably, telcos were an industry which came to the cloud a bit slower than other industries. Also, because some of the applications are so complex and rely on a real-time response. So, moving to the cloud was even in a sense more complex than in other industries. But now there are solutions that allow for that to become possible, and so we do see an acceleration, and we have some of the major telcos that are committing to be 90% in the cloud now. So, what had seemed impossible is now becoming a reality.
Stephen Saunders:
You also work with gaming companies as well, don't you? It must be very, very different to operate with those two industry demographics, or isn't it?
Silvia Candiani:
In gaming it's all about the game development, so it's really all about the development of new services. And so if you think about things like GitHub, Copilot and the benefits that also AI can give you in making developers more productive, more efficient, to avoid spending a lot of time in, let's say value-added tasks such as testing and documenting the code development versus creating what is new. That is a big area of focus for game developers.
At the same time, then it's all about engaging the users, so creating some sort of gamification, creating ways so that users become fans and remain hooked in the game, and loyal to the game. And actually, that's very interesting because what we've learned in that industry can really be applied to media company and telcos.
Stephen Saunders:
Well, I think it's interesting because the application of some of the gaming knowledge in terms of things like completion dynamic and participation dynamic and community dynamic, those are things which telcos could apply to their own business models in the same way that airlines have done with loyalty programs and getting all of those.
Silvia Candiani:
Just in terms of the prepaid market or the youth market, how do we make it more engaging, fun, and how do we create a sense of community and belonging?
Stephen Saunders:
You mentioned Copilot, have you encountered concerns from telcos with feeding their proprietary information into Copilot, or has that not been an issue?
Silvia Candiani:
Actually, no. And the Copilot runs on the tenant, on the customer tenant. So it's almost like a one-way journey so that you bring in the power of the LLM, the power of the understanding of the language and bring it to the telco, but then all the information that runs within the customer tenant stays there and doesn't help train the model, or doesn't get out, let's say in a wider internet.
Stephen Saunders:
It's almost like you've air-gapped, Copilot from the rest of the internet, and I think that that's exactly right. We've had this debacle with AT&T and Snowflake, obviously that got a lot of people concerned. What's your take on the state of the state of security for telcos and cloud now? It must be a big concern and a focus for Microsoft, isn't it?
Silvia Candiani:
Security is really the top priority of the company at the moment. I do believe that we are differentiated on the security space. We are the biggest security company in the world by now, and we also enable telcos to open a new security go-to-market. Because telcos have the opportunity to secure themselves in panic with us, but also to provide security services to our joint customers, because they're able to integrate the threat signals that come from the network with the security signals that come from the IT estate, and therefore provide managed security services to customers. And that also means that it's a great revenue and growth opportunity for telcos in which they can differentiate themselves.
Stephen Saunders:
What about the benefits of Copilot? Why are people using it, and what are they happy about?
Silvia Candiani:
Copilot has seen an incredible rate of adoption, and really the point is to make a life easy for employees, and to take out some of the drudgery of work. For example, one of our early adopters has been Lumen Technologies and they report for the B2B sellers, and they report that their salespeople were spending up to four hours per week to research information for customer that they were going to present a proposal to. And now that with Copilot has gone down to 15 minutes, so that's three hours a week, more than three hours a week that they save for each employee, that now also becomes more confident and more professional in presenting their pitch and their proposal to customers, prospective customers. And the value of the three hours per week for their B2B sellers amounts to about $50 million a year.
Stephen Saunders:
Fantastic. I need to get it for myself. I could do with saving three hours a week. Appreciate it, thank you.
Silvia Candiani:
Thanks.