Artificial Intelligence (AI) in telecommunications is driving a paradigm shift with the enormous benefits it brings to the industry. The sector is witnessing a robust surge in AI adoption, especially with the advent of generative AI. This transformation is driven by the industry’s pursuit of improved customer experiences, streamlined processes, heightened productivity, and refined network operations.
NVIDIA’s latest State of AI in Telecommunications report, which surveyed 400 telecommunications industry professionals, indicates that AI is not only contributing to increased revenues but is also proving effective in achieving cost savings. Read on for key insights from the report.
Opportunities of AI in telecommunications
The report underscores sustained interest and growing expectations in AI, particularly among industry executives. An impressive 90% of survey respondents are actively engaged in AI initiatives, signaling a pervasive integration of AI across diverse segments of the telecom value chain.
The primary motivation behind this sustained engagement is the belief among stakeholders that AI is pivotal to their company’s success. A substantial 56% of respondents affirm the importance of AI, with decision-making management expressing an even higher rate of 61%. However, not all stakeholders are unanimous in recognizing the significance of AI, emphasizing the need for further efforts to showcase its real-world business impact.
Generative AI is gaining importance with applications in customer service improvement (57%), employee productivity enhancement (57%), network operations and management (48%), network planning and design (40%), and marketing content generation (32%). The report also sheds light on the development and deployment of large language models (LLM) for generative AI, with 40% of respondents utilizing their data to train internal models and 29% opting for partnership-driven model building or customization.
Enhancing customer experiences is identified as the most significant AI opportunity for the telecom industry, with 48% of respondents selecting it as their primary goal. Notably, 57% of respondents view generative AI as a key driver for achieving this objective. Telcos are leveraging AI to offer virtual assistance, enrich the retail experience, provide personalized recommendations, and manage customer churn.
The survey reveals that 67% of respondents experienced increased revenues with AI adoption, with 19% noting growth exceeding 10%. In the trial or pilot stage, 71% reported revenue increases. Likewise, 63% reported cost reduction with AI adoption, with 14% achieving reductions exceeding 10%, and 66% experiencing cost reduction in the trial or pilot stage.
Challenges of implementing AI in telecom
Despite achieving success, challenges persist in the widespread adoption of AI. Skill gaps and the need for appropriate labor are identified as the top challenges (34% for AI, 55% for generative AI). Establishing a robust business case with a clear return on investment (ROI) is another significant hurdle, with 33% of respondents struggling to quantify the ROI.
Investing in AI
Investments in AI infrastructure and models are on the rise, with 66% of respondents planning to increase their budget for AI infrastructure in 2024. Innovations in AI infrastructure and models play a pivotal role, enabling telcos to transform legacy infrastructure into AI-ready platforms and deploy AI solutions to address business needs.
Customer experience optimization remains the most popular AI use case, with 42% planning to invest in generative AI in 2024. The telecom industry is still in the early investment stage, with 96% intending to either increase or maintain their AI spend in 2024.
Partnerships will be critical for the adoption of AI solutions in the industry. As per the survey, 44% of respondents reported co-development with partners as their company’s preferred approach to building AI solutions. Open-source tools (28%) and AI-as-a-service approaches (25%) are also recognized methods for this. Notably, 29% of respondents built or customized generative AI models with partners, aligning with the telecom industry’s stringent data protection rules.
In conclusion, the telecommunications industry is at the forefront of AI integration, leveraging its transformative capabilities to enhance customer experiences, increase efficiency, and overcome challenges. With a focus on strategic investments, partnerships, and innovative approaches, the industry is poised for a continued evolution, laying the foundation for a future where AI plays a central role in shaping the telecommunications landscape.
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