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2024 trends in the telco sector illustrated by AWS

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2024 trends in the telco sector illustrated by AWS

Chivas Nambiar, General Manager, Global Telco Business Unit, AWSillustrates some of the key trends that will characterize the telecommunications sector during 2024.

The past year has been a period of considerable interest for the telecommunications industry, characterized by the explosion of generative artificial intelligence (AI) and macroeconomic instability. Because of this. telecom companies had to reconsider their business models carefully and reorient their strategies.

Spending on digital transformation is growing

While revenue growth remains a priority, we are seeing an increasing focus on maximization of efficiency in response to increasingly expensive access to financing. According to Omdia, only one in 10 telcos has reduced operating expense (OPEX) relative to revenue over the past decade. Global spending on digital transformation is expected to reach close to $3.9 trillion by 2027. Thus determining profound changes in the sector, also with regards to the use of capital (CAPEX). Today, building and managing networks is increasingly expensive, implying significant changes in the allocation of financial resources of telecommunications companies.

The next phases of generative AI are opening up

No technology has recently attracted as much interest as generative AI. According to a survey conducted by Altman Solon, telecom carriers could increase up to six times the current spend on generative AI. Adoption of this technology is expected to reach an average rate of 34% among communications service providers (CSPs) by next year. To then rise to 48% in the following two years.

The 2024 trends

Currently, telecommunications companies are located in the prima phase of using generative AI, implementing solutions to summarize calls or chatbots to enhance existing systems. Customer-facing chatbots represent the most common use case, with 92% of CSPs highly likely to implement them. While 63% say they already have one in production.

Improve the customer experience

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In 2024, we will see a new phase in the adoption of this technology. Telecom carriers will mature and scaleranno their experiences and tools based on generative AI. The implementation of solutions to improve the customer experience will increase, which may take the form of personalized offers and marketing to create value. One New Zealand has already introduced a generative AI solution that helps customer service agents understand the reason for calls, actively supporting them in resolving issues.

Adopt a solution

The adoption of this solution brought a 10% increase in customer trust. Amdocs, on the other hand, launched Stellar Elements to unite the company’s 8 companies specializing in customer support under a single brand. This shows how generative AI tools are capable of generating business value quickly. Cox Communications also uses generative AI to drive innovation and improve customer service, reducing tempo of manual document searches from 2-3 hours to a few seconds.

Increase the use of Software as a Service (SaaS)

Many large telecommunications companies have traditionally acted as builders, assembling bits and pieces of various technologies to develop services. Currently, they are adopting solutions SaaS to deal with problems. Such as technical debt, resulting in improvements in the overall customer experience. As part of their digital-first strategy, operators like T-Mobile are relying on SaaS solutions from Salesforce, Adobe, Amdocs and others to quickly transform the customer experience while tackling complex system migrations. In 2024, telcos will continue to focus on using SaaS technology, aiming to improve turnaround time. marketing for new products, financial performance and agility.

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APIs unlock new networking capabilities

To showcase the capabilities of their networks, telecom companies will focus their efforts on development of Application Programming Interfaces (APIs). Useful to provide more information on 5G networks, they give greater control over the programmability of the network. These elements, in fact, are fundamental to manage aspects such as quality of service and bandwidth.

2024 trends in the telco sector illustrated by AWS

Following the standardization of APIs across operators, telcos will need to consider whether manage your own API network or partner with cloud providers. It is essential to consider the components necessary for the operation of such a network, including computing power, storage, databases and machine learning capabilities, necessary to provide developers with an improved support experience.

Improve efficiency through the cloud

Many telecom carriers are leveraging the cloud to build more networks efficient from a cost point of view, with the prospect of reducing the ratio between operating expenses and revenues by more than 10%. The focus on Cloud RAN will continue into 2024, with telecom operators taking full advantage of its benefits. These include greater efficiency, cost reduction and lower energy consumption. Communications service providers such as NTT DOCOMO and NEC Corp, for example, have demonstrated that they can reduce consumption energetic by over 70% using Cloud RAN architectures.

The 2024 trends

In addition to theoptimization of costs, the cloud opens up new revenue opportunities for communications service providers, giving them the opportunity to think about new product lines, as well as unlocking new capabilities. For example, the cloud allows you to create a globally distributed enterprise network, as Deutsche Telekom has done, which combined its own connectivity services with third-party connectivity, computing and storage resources. TELUS introduced a smart home solution in 2023 that reduces the need to use multiple apps, simplifying the process for setting up new devices.

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A flexible attitude

In conclusion, it is imperative that telcos make a careful assessment when choosing the most appropriate cloud provider. Because this decision will determine the readiness and security of available AI solutions, the breadth of cloud-native SaaS providers, the availability of developer communities for their APIs, and the industry depth needed to build the next generation of execution capabilities. To maintain a position of advantagetelecom operators must remain flexible and evaluate how these emerging trends and technologies can accelerate their business goals, setting them up for long-term success.

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