Telecom businesses are 'falling behind' in AI

For nearly a decade, carriers have struggled to increase revenue, leading to a significant decline in cash flow. This has forced telecom companies to cut staff on a large scale while looking for solutions to increase cash flow.

Vodafone's new CEO Margherita Della Valle has taken the decision to cut 11,000 jobs from a total of 90,000 employees amid the company's poor return on investment in Europe.

Meanwhile, BT CEO Philip Jansen, who plans to cut 55,000 jobs by 2030, said AI technology offers a huge opportunity for the company to maximize its resources. Accordingly, automated digitization could help reduce 10,000 jobs.

Falling behind other tech fields in AI

BT is not alone in having high hopes for AI technology. Ahmed Hafez, VP of Technology Strategy at Deutsche Telekom, says that “AI is one of the biggest shifts” the carrier has ever faced. According to a study by Accenture, AI has the potential to increase business productivity by at least 40%.

Telecommunications companies are slower than technology companies in applying AI.

Vodafone’s chief technology officer says speed is the biggest change automation will bring to the telecoms business. But in the future, more automation will mean companies will expand their use of AI beyond specific use cases, posing a challenge to adaptability.

“We don’t have dozens, but hundreds or thousands of use cases for AI. Are companies ready for that scale? Also, I don’t think we’re building AI for this,” Hafez said.

Meanwhile, other tech companies have been implementing AI much earlier and much faster, Joe Butler, chief technology officer of Digital Catapult, said at a forum hosted by Telecom TV: “Tech companies using AI are growing at a breakneck pace, and the business opportunities and value creation are happening at an incredibly fast pace,”.

For example, “Google’s AI deployments across the company were exponential from 2013 to 2016,” he said. “So when the telecom industry talks about missing the boat on AI, it’s already done.”

AI for growth

Neil McRae, director of network strategy at Juniper Networks and until recently chief architect at BT, encourages telecoms companies to focus on using AI to deliver “double-digit growth” rather than cutting costs, saying that otherwise businesses will “not be able to afford the cost of AI” before they can even think about actually developing it properly.

Carriers need to see AI as a growth tool rather than a cost-saving solution

The ability of telecoms companies to invest heavily in innovation is constrained by financial performance. Brian Potterill, director of competition policy at Ofcom, said that “cost-cutting strategies are not a sign of a healthy industry” and that continued investment by telecoms companies depends on making enough profit in the industry.

McRae said service providers should use AI to gain an edge over competitors and avoid getting bogged down in regulatory silos. Still, telecoms businesses must deal with the complexity of running legacy systems and networks alongside new technology.

“You’re not solving one small problem,” Azfar Aslam, Nokia’s European CTO, pointed out during a panel discussion on AI at the DSP Leaders World Forum. “You’re looking at the entire field and putting it all together. In real businesses, you’re competing for capital to solve a problem that has a million problems… and that capital is always finite,” Aslam explained. “As the cost of implementing AI starts to increase, you have to be really smart about which problems to solve first.”

(According to Inform)

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