As a result, it’s vital that CSPs do not become AI ‘laggards’, and move quickly to advance digital transformation with solutions that leverage AI. The report notes that, while many CSPs have already committed to infusing AI across their operations, AT&T, Telefonica, and ST Telecom are leading the way. However, many others are still formulating their AI strategies.

Many CSPs are facing up to what some have described as the challenge of digital transformation in order to compete with more agile OTT and consumer technology players. Digital transformation is a much-overused term, but in this context can be taken to refer to the disruption of strategies, business models and revenue streams caused by new innovation, applications and technologies, and how they alter user behaviour – in particular by sharing data across what have previously been silos.

As a result, whether we call this transformation or not, CSPs need a clear-headed perspective on AI and an actionable roadmap on how to maximise the opportunity it affords, notes the report.

The report offers some advice. While it’s important not to become a laggard in response to market AI hype, it’s equally vital that CSPs are not “too visionary” and end up with products for which the market is not ready – and which would consume resources and, with uncertain outcomes, undoubtedly raise the bar for future such activities and, ultimately, impede the very agility they seek to adopt. Ovum recommends steering a pragmatic path by building AI expertise and planning for clear use cases and definable ROI with existing proven AI technology.

It recommends a three-step approach:

• Identify and assess your opportunity
• Build the capability with AI expert partners where you lack in-house expertise; and
• Follow through with a managed lifecycle.

The most effective AI solutions will be those that support a horizontal approach, accessing multiple data streams in real- time to produce intelligence that can feed into and enhance cross-domain business processes, it adds.

In fact, CSPs are in a strong position, as data fuels AI automation by helping to build, train and constantly improve the algorithms that power it. Implemented correctly, AI can enable customer personalisation at scale and become a prime differentiator for CSPs in a highly competitive market.

However, CSPs need to understand what data they have available and its relevance to AI opportunities. This means not just looking at new sources, but also re-examining existing applications and systems, including product catalog data.

“In turn, AI can fine-tune the product catalogue like never before. It can propose the optimal price, content, size, validity, or other parameters of a product catalog entry and configure it based on analysis of available data such as competitor analysis, advertising, customer feedback, and business support systems (BSS) data,” says the report

Digital customer self- service is another top priority for CSPs, so it makes good business sense to invest in customer care platforms with strong AI capabilities. The report suggests that CSPs need to become more adept at personalisation across all customer-facing touch points and services, and AI capabilities are a key enabler on this front.

AI can enable customer interactions via an intelligent conversational interface that can play a central role in next-generation customer care – something that the telecoms industry, and notably Vodafone, are working hard to improve.

Of course, CSPs need to be aware of data privacy concerns, which are only going to intensify. As a result, they should be proactive and visible in demonstrating how their AI solutions safeguard data privacy, and build a reputation for trust that can act as a point of differentiation, concludes the report.

The report is a timely one, with CSPs facing a number of challenges and pressures, ranging from competition from newer, more nimble market entrants to data privacy, poor customer experiences, and shrinking revenue streams. They need to evolve their business processes to maximise the use of information available from their resources. AI offers a promising opportunity to help meet some of those challenges, as well as extracting more value from existing customer data – as long as it’s implemented in a structured and thoughtful manner, and as long as CSPs don’t delay until it’s too late.