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The Importance of Artificial Intelligence in the Telecom Industry

by Anthony Weaver

Companies that utilize this technology will reap financial benefits and market competitiveness.

If there is one industry that should be leveraging data in every way possible, it’s telecommunications. The telecommunications industry services billions of people each day, generating massive amounts of data. Though not many telecom companies are leveraging this data, the introduction of data science, machine learning, and artificial intelligence in this industry are inevitable.

A study by McKinsey, Telcos: The Untapped Promise of Big Data, based on a survey of leaders from 273 telecom organizations, found that most companies had not yet seriously leveraged the data at their disposal to increase profits. And only 30 percent say they have already made investments in big data.

So while there is certainly debate within telecom companies about whether the return on investment is worthwhile, there is no doubt that data science, machine learning (ML), and artificial intelligence (AI) are inevitable when it comes to the industry’s future. Those that figure out how to leverage these techniques and technologies will thrive; those that don’t will be left behind.

By using data science, machine learning, and artificial intelligence strategies, telecommunication companies can improve four areas of their services. The importance of data science, ML, and AI to the telecom industry will likely present itself in these four areas in particular, which this paper will take a look at individually:

  1. Troubleshooting: One of the major challenges for telecom providers is being able to guarantee quality service to subscribers. Analyzing call detail records (CDR) generated by subscribers at any given moment of the day is key to troubleshooting. However, CDRs are challenging to work with because the volume of data gets massive and unwieldy quickly. For example, the largest telecommunication companies can collect six billion CDRs per day.

With data science, machine learning (ML), and artificial intelligence (AI), companies can instantaneously parse through millions of CDRs in real-time, identify patterns, create scalable data visualizations, and predict future problems.

  1. Fraud Detection: Verizon estimated in 2014 that fraud costs the telecom industry upwards of $4 billion a year. However, the faster that telecom companies analyze large amounts of data, the better off they are in identifying suspicious call patterns that correlate with fraudulent activity.

Cutting-edge ML and AI strategies like advanced anomaly detection make it much easier for telecommunication companies to identify “true party” fraud quickly.

3. Marketing: The high churn rate in telecommunications, estimated at between 20-40% annually, is the greatest challenge for telecom companies. Telecommunication companies can use data to build better profiles of customers, figure out how to best win their loyalty (in the most scalable and automated way), and adequately allocate a marketing budget. With improved data architecture, they are able to harvest and store a greater diversity of data that provide insights into each customer such as demographics, location, devices used, the frequency of purchases, and usage patterns. By combining data from other sources like social media, they can have a stronger understanding of their customers.

Using machine learning gives a more accurate picture of which channels are most responsible for customer conversions for better ad buying as well.

  1. Customer Experience: Telecommunication companies can enhance their services by analyzing the millions of customer complaints they get every year to figure out which types of improvements will have the greatest impact on customer satisfaction and thereby increase customer retention. They can also leverage data at a larger and more automated scale to gain insights into the performance of their technicians.

The more that telecommunication companies can analyze data on customer calls, the more they can begin to recognize which types of problems are most likely to lead to unwarranted “truck rolls” and put in place measures to prevent those calls. Given the number of calls and the depth of analysis required, this necessarily dictates a machine learning approach – more specifically, a deep learning approach. Because analyzing the calls themselves means dealing with lots of unstructured data, it’s the perfect place to expand into ML and deep learning for big gains.

The future of data in the telecom industry.

Data science is already a big part of the telecommunications industry, and as big data tools become more available and sophisticated, data science, ML, and AI will all continue to grow in this space.

In the coming years, companies that succeed will be those that figure out how to best use the massive number of data points that are flowing both through their network and around it to reduce labor costs, develop better technology and, to better understand what the seven billion potential customers around the world want to do with their smartphones and computers.

To learn more, download the whitepaper White Paper: Top 4 Growth Areas of Machine Learning in Telecommunications.

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