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Transforming telco businesses with AI

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Artificial intelligence is exerting its influence on almost every sector, including telecommunications. This technology has begun to add impressive new dimensions to many industries, accelerating the digital transformation. According to Tractica, annual investment in telecommunications AI software is expected to grow to more than $11.2 billion in 2025.

The telecommunications industry is at the heart of technological growth and digital transformation. The industry is huge. 54 telecommunications companies are listed on the Forbes Global 2000 list. They account for more than $3.4 trillion in assets and almost $1.5 trillion in income in 2020.

The potential of AI in the telecom industry is immense. By taking advantage of this technology, organizations can create supplementary revenue streams using business niches they had not even thought could be profitable. The demand for higher quality telecom services and a better customer experience grows. Therefore, service providers need to look for smarter, more powerful and more innovative technologies to retain their customers.

A glimpse into AI

Today, artificial intelligence is everywhere. It is used to recognize your online activity patterns and recommend what you should buy next. Also to understand what you are saying to virtual assistants such as Amazon’s Alexa and Apple’s Siri. To detect spam or fraud, and to carry out a myriad of other activities.

Artificial intelligence is a rather poorly understood concept. Opinion surveys, conducted by Deloitte, show that even business front runners lack a comprehensive understanding of AI. That a significant  percentage of the generic public confuse AI with super-powerful robots or devices with high intelligence. And, due to the ambiguity of the term, technology pessimists conspire that AI will conquer humanity, suppress personal freedom, and destroy our world.

To put it simply, Artificial Intelligence defines the ability to provide intelligence to any artificial object, software, machine or equipment through a programming algorithm so as to perform a specific task. AI is a broad branch of computer science involved in the development of intelligent machines capable of performing tasks that normally require human intelligence.

AI algorithms are created to enable machines to make decisions, frequently using real-time data. These are not passive machines that are only able to generate mechanical or predetermined responses. By using sensors, digital data or remote inputs, AI algorithms are capable of combining information from an array of sources, instantaneously analyzing the material and acting on the insights derived from that data. 

AI is being embraced by service providers around the world and it’s easy to see why. 

How can AI benefit telecoms?

According to a survey of 1,200 global organizations, 66% of telecom companies believe that AI is considerably or very important for the future of business. However, this technology faces challenges in data management and regulatory compliance, identifying the most reliable data sources, and ensuring data security.

At the moment, one of the main uses of AI in telecoms is providing a better customer experience and reducing operating costs by driving automation. However, improving the customer experience and speed of service is only the tip of the iceberg when it comes to AI use cases.

Telcos use the power of artificial intelligence to process and analyze vast amounts of data to gain useful insights that provide a better customer experience, improve operations, fight fraud and increase revenue from new products and services.

According to Gartner, Inc., the number of Communication Service Providers (CSPs) investing in AI technologies to improve the planning, performance and services delivered by their infrastructure will increase from 30% in 2020 to 70% in 2025.

AI benefits for telecoms

Combatting overload

Once AI is active, the communications network will be able to automatically respond to any significant congestion that may occur. The network will be able to quickly detect congestion, automatically generate the number of virtual machines needed to process the amount of traffic received, and route the excess traffic through these virtual machines, all without human intervention.

Network optimization

AI is essential in helping telecoms create self-optimizing networks (SONs), where operators can automatically optimize network quality contingent on traffic information on a regional and time zone basis. AI applications used in the telecommunications industry employ advanced algorithms to search for data patterns. Those patterns allow them to detect and predict network anomalies, allowing operators to proactively resolve problems while not adversely affecting customers.

Improved customer service

Another advantage of AI in telecommunications is in the automation of customer service mechanisms. These forms of intelligence, called chat robots or virtual assistants, are becoming increasingly popular in the telecommunications industry. Chatbots can improve, increase, or even internationalize customer service. They can increase customer satisfaction by providing faster responses and deliver customer support in languages that would not otherwise be possible.

Fraud detection

The area of telecoms that adversely affects millions of consumers every day is that of fraudulent activity. AI and machine learning (ML) algorithms are used to reduce fraudulent activities in the telecommunications industry. It can help in combating counterfeit profiles, unauthorized access, cloning, behavioral fraud, caller ID spoofing, and so on. The exposure of unsupervised machine learning algorithms to a huge amount of customer and operator data allows AI applications to learn the characteristics of normal traffic, thereby being able to detect abnormalities and avoid fraud. Algorithms define anomalies and present them as real-time alerts to analysts using data visualization techniques.

Predictive analytics

All telecom service providers have to handle huge amounts of data in their daily operations. Telecommunications companies use predictive analytics to gain useful insights so as to become more efficient, make improved data-driven decisions and generally deliver improved services. Predictive Analytics gives a helping hand to sales and marketing in performing customer segmentation, customer churn prevention, and customer life-time value foresights. By combining a panoramic view of customer data, CSPs can offer better and more customized services to their customers.


There are many possibilities for AI in the telecommunications industry, and the cases described above describe only a few applications.


The amalgamation of AI technology into the telecommunications industry helps various communications service providers to manage, optimize and maintain infrastructure. Artificial intelligence tools and applications are rapidly being developed. This technology will undoubtedly only accelerate its presence and influence in the telco vertical.

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