Why communication service providers are having to embrace AI apps
Public cloud computing applications have left the telecom service providers in a marginalised position. The whole industry has always been directly affected by technology innovation and digital disruption. That said, the past 10 years have been particularly challenging for several significant reasons.
The mainstream penetration of artificial intelligence (AI) and machine learning (ML) in communication services, the rise of highly customised over the top (OTT) applications, the rollout of superior connectivity modes such as 4G LTE and 5G, and the internet of things (IoT) have changed the landscape.
In the face of the hyperpersonalised, customer-centric and often free OTT alternatives, communication service providers (CSP) have already under growing pressure to combat declining Average Revenues per User (ARPU) - a key growth metric that industry analysts measure.
CSP AI analytics market development
According to the latest worldwide market study by Juniper Research, total network operator investment on AI solutions will exceed $15 billion by 2024 - that's rising from $3 billion in 2020.
Juniper analysts have identified network optimisation and fraud mitigation solutions as the most highly sought-after AI-based services over the next four years. AI-enabled solutions also automate network functionalities including routing, traffic management and predictive maintenance.
The new market study found that network operators in developed regions - such as North America and Europe - would account for over 40% of AI spend by 2024, despite only accounting for less than 20% of global subscribers.
Juniper Research also predicts that growing demand for operational efficiencies will drive network operators in these regions to increase their overall investment into AI over the next 4 years.
Their latest assessment urges network operators to embrace a holistic approach to AI implementation across service operations, rather than applying separate AI strategies to individual use cases.
CSPs must leverage AI to unify internal data resources and encourage cross-functional insight sharing into network efficiencies to maximise the benefits of collaboration across internal teams.
Moreover, the new research findings predict that AI spend by emerging markets network operators will exceed $5 billion by 2024 -- that's rising from only $900 million in 2020.
Juniper found that this growth will be driven largely by operators exploring early use cases of AI before expanding the presence of AI in their networks to include more comprehensive services.
Outlook for CSP AI applications growth
The market study resulted in a forecast that the Indian Subcontinent and Africa & Middle East will experience the highest growth in spending on AI services, with network operator spend in both regions expected to grow over 550% during the next four years.
Furthermore, Juniper analysts now anticipate that network operators in these regions will initially invest in AI-based customer relationship management (CRM) solutions that yield immediate market development benefits. We'll have to wait and see how the technology execution matures over time.
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