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Telcos are falling behind in use of applied AI and machine learning: Research

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Telcos using AI and machine learning

Telecom providers around the world are lagging in their use of applied artificial intelligence (AI), predictive models, and machine learning, according to research by FICO and TM Forum. The research states that only 41% of telcos are using prescriptive analytics to provide personalized onboarding experience to customers.

However, communication service providers (CSPs) are increasingly realizing the importance of being more data-driven to increase profitability and enhance their decision-making.

“With CSPs under pressure to increase profitability, they are turning to data-driven, predictive models in all stages of the customer lifecycle,” said Mark Newman, chief analyst at TM Forum.

“As they start to explore artificial intelligence and machine learning, CSPs need to take a holistic approach and find opportunities and use cases across the customer lifecycle. This is how the battle for customer loyalty will be waged.”

81% of telecommunication providers apply advanced analytics in marketing and advertising campaigns to drive conversion rates. However, they don’t implement it in the later stages of the customer journey.

How telcos use advanced analytics

Use of AI and machine learning can allow CSPs to better understand the expectations of customers and their experiences throughout the entire lifecycle.

But, only 35% of them are using machine learning for renewals, while only 36% are using AI for collections and recovery.

Providing a personalized customer experience is an opportunity which is yet to be fully realized.

“The survey results underscore that there is still a tremendous opportunity for telcos to utilize analytics throughout the customer journey,” said Shawna Morgan, senior director for telecommunications, media, entertainment, and technology, FICO.

“Providers need to look beyond marketing, and expand their focus to how machine learning and AI can improve customers’ experiences and reduce churn.”

In the next two years, the biggest drivers of advanced analytics among the telcos will be to optimize the customer experience, improved profitability, and reduce churn.

drivers of advanced analytics

Also read: Impact of artificial intelligence on roles of business leaders: Microsoft research

The research further reveals that 94% of CSPs communicate with their customers via text messaging, while 92% do it via a call centre.

At the time of communicating with customers for late payment, 67% of CSPs send automated messages, while only 20% send a personalized text that is tailored to their specific preferences and customer profiles.

how telcos communicate with customers

For more information on the survey results, download the full report here.

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