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key trends for 2024

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key trends for 2024

On the occasion of the Mobile World Congress which will be held in Barcelona from 26 to 29 February, AWS will be protagonist with a dedicated booth in the Upper Walkway – South Entrance.

In this byline, Nambiar outlines four trends that will characterize the telecommunications landscape in the coming year, offering valuable insights into business strategies and challenges facing the sector. Topics covered include the rise of generative AI, the increased use of SaaS solutions, the role of APIs in powering networks and optimization through the cloud.

The article by Chivas Nambiar, General Manager, Global Telco Business Unit, AWS

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 have had to carefully reconsider their business models and reorient their strategies.

Although revenue growth remains a priority, we are assisting to an increasing focus on maximizing efficiency in response to increasingly expensive access to financing. Second Omdia, only one in ten telecom operators has reduced operational expenditure (OPEX) relative to revenue over the last decade. Global spending on digital transformation is expected to reach a figure close to 3.9 trillion of dollars by 2027, leading to profound changes in the sector, also with regard 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. Below are some of the trends that will distinguish the sector during 2024.

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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 current spending on generative AI by up to six times. Adoption of the technology is expected to reach an average of 34% among communications service providers (CSPs) next year, and then rise to 48% over the next two years.

Currently, telcos are in the early stages of employing generative AI, implementing call summarization solutions or chatbots to augment existing systems to achieve rapid adoption. Customer-facing chatbots represent the most common use case, with 92% of CSPs highly likely to implement them and 63% saying they already have one in production.

In 2024, we will see a new phase in the adoption of this technology, where telcos will mature and scale their generative AI-based experiences and tools. The implementation of solutions aimed at improving the customer experience will increase, which may take the form of personalized offers and marketing to create value. A New Zealand company – One New Zealand – has already introduced a generative AI solution that helps customer support agents understand the reason for calls, actively supporting them in problem resolution; the adoption of this solution led to a 10% increase in customer trust. Amdocs, however, launched Stellar Elements to unite the company’s eight customer support businesses under one brand. This shows how ready-made generative AI tools are capable of generating business value quickly. Cox Communications also uses generative AI to drive innovation and improve customer service, reducing manual document search times from 2-3 hours to just seconds.

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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 SaaS solutions to address issues such as technical debt, resulting in improvements in the overall customer experience. As part of the digital-first strategy, operators like T-Mobile rely on SaaS solutions provided by 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 time to market for new products, financial performance and agility.

APIs unlock new networking capabilities

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

Following the standardization of APIs across operators, telcos will need to consider whether to manage their 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 cost-efficient networks, with the prospect of reducing their operating expense to revenue ratio by more than 10%.

The focus on Cloud RAN will continue into 2024, with telecom operators taking full advantage of its benefits, including 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 power consumption by more than 70% using Cloud RAN architectures.

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In addition to cost optimization, the cloud opens up new revenue opportunities for communications service providers, enabling them to think about new product lines, as well as unlocking new capabilities. For example, the cloud allows you to create a globally distributed corporate network, as it did Deutsche Telekomwhich 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.

In conclusion, it is imperative that telcos make a careful assessment when choosing the most appropriate cloud provider, as this decision will determine the readiness and security of available AI solutions, the breadth of cloud-native SaaS providers, the availability of of developers for their respective APIs and the industry depth needed to build the next generation of execution capabilities. To stay ahead, telcos 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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