Telecommunications Providers Lag in Use of Applied AI and Machine Learning

While telcos view personalization as very important, only 41 percent said they are using advanced analytics when they onboard a new customer, the majority (81 percent) use analytics in advertising and marketing, but do not use it in the later stages of the customer journey. The number one driver for analytic investments is to improve the customer experience, followed by the desire to improve profitability, and reduce churn.

FICO, a leading analytics company, today announced results of a global survey with TM Forum, the global not-for-profit association focused on digital transformation. They survey shows that telecommunications providers worldwide are lagging in their use of predictive models, machine learning and artificial intelligence. However, communications service providers (CSPs) are increasingly recognizing the need to become more data-driven in order to improve their decision-making and profitability. Improved customer experience is central to both, and it was cited as the number one driver for analytic investment in the survey.

“With CSPs under pressure to increase profitability, they are turning to data-driven, predictive models in all stages of the customer lifecycle,” said Mark Newman, chief analyst at TM Forum. “As they start to explore artificial intelligence and machine learning, CSPs need to take a holistic approach and find opportunities and use cases across the customer lifecycle. This is how the battle for customer loyalty will be waged.”

Advanced analytics including AI and Machine Learning can enable CSPs to gain a greater understanding of customer expectations and experiences across the customer lifecycle, but few have yet to implement technology solutions. Data points to consider:

Few CSPs use prescriptive analytics later in the customer journey – Only 35 percent are using advanced analytics or machine learning for renewals, and only 36 percent are using artificial intelligence for collections and recovery.
Personalization is an opportunity yet to be fully realized – While operators view personalization as very important, only 41 percent said they are using advanced analytics for it when they onboard a new customer. Only about half are proactively working to match offer packages to customer needs.

“The survey results underscore that there is still a tremendous opportunity for telcos to utilize analytics throughout the customer journey,” said Shawna Morgan, senior director for telecommunications, media, entertainment, and technology, FICO. “Providers need to look beyond marketing, and expand their focus to how machine learning and AI can improve customers’ experiences and reduce churn.”

A large majority – 81 percent – are using or plan to use analytics in marketing and advertising campaigns.
70 percent are still using a reactive and rules-based approach to fraud, with just over a quarter using machine learning and predictive models. Text is the dominant channel of communication – 94 percent communicate with their customers via text, however only 20% use personalized text for late payment communications. The research surveyed 64 professionals from CSPs around the world who are applying, leveraging and/or planning to deploy advanced analytics in some capacity at various points across the customer lifecycle.