The impact of AI on CX in telecom

Startek Editorial
Startek Editorial

Apr 19, 2023 | 7 min read

The telecom industry has evolved beyond just providing basic phone and internet services. With the rise of mobile and 5G broadband services, the industry is at the forefront of technological growth in an era dominated by the Internet of Things (IoT). Additionally, the rapid adoption of artificial intelligence (AI) is expected to drive the telecom industry's growth. According to Valuates, the global market size for AI in telecommunications is projected to reach $14.99B by 2027.

AI's impact on the telecommunications industry

AI has become ubiquitous in the telecommunications industry. From chatbots to automated personalized recommendations, AI enables companies to improve their customer experience (CX).

Call center automation: AI is often used in the telecom industry through chatbots; computer programs that mimic human conversation, commonly used to provide customer support on websites and apps. Telecom companies use chatbots to help customers with tasks such as checking account balances and making payments. Chatbots can also provide 24/7 support, which can be beneficial for customers who may not be able to reach a human representative during traditional business hours. Using AI solutions can eliminate traditional pain points such long wait times resulting from high call volume rates by automating routine and repetitive inquiries.

Personalized recommendations: Customers expect to be treated as individuals and AI makes it possible for the telecom industry to create one-to-one relationships through personalization. Many providers are now using AI to analyze customer data and offer personalized products and service recommendations. For example, a telecom company might use AI to suggest a new phone plan to a customer based on their usage patterns. Personalized recommendations can help telecom companies improve customer satisfaction by offering products and services that meet the specific needs of individual customers.

Conversational AI: AI-enabled virtual assistants enable telecom to connect with customers via chat and voice. Virtual assistants contain inquiries in automated channels, reducing the volume of inquiries that need to be handled by a live agent. In this way, AI enables agents to focus more attention on more complex queries.

Fraud detection: Telecom industry deals with various security breaches in their daily operations. Fraud could be in many forms, such as subscriptions, voicemails, identity theft and voice-phishing calls. Conventional telecom security services only identify basic issues and fail in detecting or predicting future threats. With AI, telcos are empowered to implement algorithms that can detect and prevent fraudulent activities with network optimization AI.  AI can be used to detect a caller’s identity by their voice or even by keystrokes, alerting them to the potential of someone pretending to be the account holder. AI can then be leveraged to trigger additional security checks where a flag for potential fraud has been raised. Another way AI is helping the telecom industry detect fraud is through anomaly detection. AI algorithms can identify abnormal usage patterns, such as an unusual spike in call volume or data usage. This can help detect fraudulent activities, such as SIM box fraud or cloning. Moreover, AI can also analyze call records and network data to identify international call-forwarding fraud, which involves rerouting international calls to a different destination. In addition to fraud detection, AI can also help telecom companies optimize their network performance and customer experience. By analyzing data from customer interactions, AI algorithms can identify areas for improvement and recommend solutions to enhance network performance.

Benefits of AI in telecom

Increase engagement and retention: AI-powered telecom solutions personalize the customer experience by providing highly relevant recommendations and content. This increases customer engagement and loyalty.

Generate new revenue streams: Telecom companies are using AI to develop new products and services, such as personalized pricing plans.

Enhanced security: AI-powered solutions enable telecom providers to detect and stop malicious activities, such as fraud and identity theft. This protects customers’ sensitive information and supports the security of their accounts.

Reduced customer friction: AI is having a positive impact on the telecommunications industry by improving customer experience in self-service channels. With the widespread adoption of NLP, interacting with chatbots is a more conversational experience. Customers can interact as they would with a live agent with a lot of sense and humor.

Predictive analytics and machine learning: AI has been making significant waves in the telecommunications industry, particularly in CX. Predictive analytics and machine learning, two forms of AI, are used to improve customer satisfaction, reduce churn and increase revenue for telecom companies. Predictive analytics uses statistical algorithms and machine learning techniques to analyze historical data and make predictions about future events. This technology has been applied to customer data, enabling telecom companies to identify patterns and trends in customer behavior, preferences and needs. With this information, telecom operators can personalize their services and communications to meet customers’ specific needs.

Machine learning algorithms: They can also be used to improve CX in telecoms. These algorithms analyze customer interactions with the company's products and services, identifying patterns and trends in customer behavior to predict future customer needs, preferences and actions.

In addition to improving CX, predictive analytics and machine learning can help reduce churn. By analyzing customer behavior and identifying those at risk of churning, telecom companies can take proactive measures. For example, they can offer targeted promotions or discounts, provide personalized customer service or suggest alternative products and services.

By using predictive analytics and machine learning, telecom companies can provide personalized solutions, reduce churn and increase revenue. As AI technology continues to improve, we expect to see even more innovative solutions in the telecom industry that enhance the customer experience.

Sentiment analysis and natural language processing: Sentiment analysis, which involves using AI to analyze text data and determine the sentiment or emotion behind it, can be used to monitor customer feedback and reviews. Telecom companies can use sentiment analysis to gauge customer satisfaction levels, identify areas for improvement, and quickly respond to negative feedback. NLP, on the other hand, enables computers to understand and interpret human language. This technology helps telecom companies automate their customer service operations and provide more personalized customer experiences. For instance, chatbots and virtual assistants understand and respond to customer inquiries in natural language, providing a more seamless and human-like interaction. AI-powered tools identify patterns and trends in customer behavior, enabling telecoms to make more informed business decisions. For example, AI can identify products or services that are most popular among customers.

 The impact of AI on CX in the telecom industry has been considerable.  Sentiment analysis and NLP are two key areas where AI has made a significant difference. By leveraging these technologies, telecom operators can provide more personalized and efficient customer experiences,  increasing customer loyalty and improving business outcomes.

Considerations when implementing AI for CX in telecom

  • Data privacy and security concerns: Telecom companies deal with sensitive data, such as customer names, addresses, phone numbers and payment information, on a daily basis. This data is highly valuable and attractive to cybercriminals, making the telecom industry a target for hacking attempts and other forms of cyber attacks. Companies must take steps to ensure that customer data is always protected. Telecom companies should consider anonymizing customer data before processing it with AI. This can help protect customer privacy while still allowing telecom companies to analyze customer data to improve CX. Be cautious when sharing customer data with third parties, including AI vendors. Make sure that the vendors have appropriate data privacy and security measures in place and conduct regular security audits to identify vulnerabilities in the AI system and take appropriate measures to mitigate them.
  • Balancing automation with human interaction: Customers expect telecom companies to provide quick and efficient customer service and AI can help meet these expectations. However, customers also expect to be able to quickly interact with a live agent when they have a complex or highly emotional need. Telecom providers must balance the use of AI to deliver fast, 24/7 service while also providing access to live agents when needed.

To build trust, telecom companies must ensure that customer data is collected, processed and stored securely in compliance with data privacy regulations. They must also communicate transparently with customers about how their data is being used and obtain their consent for its use.

Established for many years, traditional telecom operators often have legacy systems that can be incompatible with AI technology, which can lead to challenges in implementing modern AI-based solutions. It is necessary to collaborate with a CX solutions provider with a sound understanding of driving digital transformation within established telecom companies to ensure systems are integrated effectively. And training will be required to ensure associates are able to work with newly deployed systems and tools.  The impact of AI on the telecom industry has resulted in the development of highly personalized products, enhanced fulfillment processes and improved network management. It also helps operators provide their customers with more attractive services and greatly improves their customer retention rate.

With more than 30 years of experience supporting telecom companies in transforming their CX delivery, Startek® is the partner you can rely on to optimize your customer engagement models for growth and resilience.

To learn how we can support your brand, click on contact us.


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