Great, AI is here… but where’s your business model?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Angus Ward, CEO, Beyond Now, talks about practical applications for AI in telecoms.

Communication Service Providers (CSPs) are at the forefront of this transformation as they explore the various ways AI can reshape their landscape.

Since the advent of ChatGPT, the topic of AI has become the predominant subject of discussion, garnering attention from individuals at all levels, from board members to vendors, to analysts and event organizers. Yet, as we delve deeper into the realms of AI's possibilities, one crucial lesson stands out — AI alone will not be the cure for the revenue challenges that the telecoms industry currently faces.

Over the past decade, the profit performance of major CSPs has been in gradual decline. In 2022 alone, the global telecoms market declined 9.7% in revenue. And earlier this year when the Bank of England was struggling to prevent inflation from becoming embedded in the economy, the six top CSPs in the market all charged a 3.9% point supplement on top of their annual inflation to try and save their profit margins. It’s no surprise then that CSPs are hoping that AI will become that elusive ‘silver bullet’ to their greatest challenges.

However, while AI offers an unprecedented leap in enhancing human capabilities, merely adopting the technology won't create new profitable revenue streams that CSPs urgently need.

Inept business models will hinder AI progress

CSPs must undergo a mindset shift and concentrate on new business models that are dedicated to driving growth. Transitioning into ecosystem orchestrators and collaborating closely with partners to tackle customer challenges can significantly expand the growth prospects for CSPs. By exposing their network to partners who can incorporate their applications and sell these to customers in a B2B2X model, CSPs can collaboratively generate industry solutions that were previously nonexistent.

With this in place, CSPs can integrate AI deep into their ecosystem orchestration platforms to improve efficiency and effectiveness in many ways. Some use cases include: 

Marrying the ecosystem orchestration model with a digital marketplace to expediate AI

As AI continues to redefine the telecoms industry, CSPs are at a crossroads where innovation and collaboration are essential for success. This merger of business models not only boosts customer intimacy and profit margins but also signifies a shift from traditional, centralized business structures to dynamic, multi-faceted ecosystems. By leveraging this strategy, CSPs can amplify the power of AI, offer customized solutions, and expedite portfolio expansion.

These multi-faceted ecosystems are enabled by digital marketplaces, increasingly used by CSPs like Telekom Deutschland for its B2B2X Marketplace to showcase their capabilities and services, and now can be used to create AI-powered solutions. This marketplace isn't just a one-way street; its dynamic DNA means CSPs can interact with diverse partners and enterprises, fostering collaborative solution-building and ultimately expanding the range of choices available to customers. This, in turn, attracts a broader audience and drives scalability.

Within this digital marketplace, partners can amalgamate their unique digital service expertise and capabilities to provide completely customized solutions that cater to specific customer needs. For instance, combining AI services into a pay-as-you-go manufacturing solution means applying AI-driven enhancements at various stages of the manufacturing process is a tangible possibility. By offering dedicated solutions to problems that can be easily upgraded and scaled, CSPs can foster continuous customer engagement that builds trust, intimacy and a community. By establishing these foundations, CSPs will be ideally placed to both benefit from AI and deliver a high level of customer experience.

Where the industry stands

In the current landscape, CSPs are increasingly recognizing the transformative potential of AI. Take SK Telecom as an example, they are proactively evolving into an AI-centric company, leveraging AI to bring forth energy-efficient solutions that result in substantial cost savings of up to 30% within their cost center operations while also offering personalized AI support to enhance seamless customer interactions.

Additionally, SK Telecom's collaboration with Deutsche Telekom to develop a specialized large language model (LLM) tailored to CSPs, further exemplifies its commitment to leveraging AI for flexible generative services that save time and costs, while fostering business growth and innovation.

These are just a couple of examples that highlight CSPs' dedication to using AI to enhance customer engagement and streamline operational efficiency. Overall, it’s clear that the industry is aware of AI’s benefits - but the focus must shift to the execution of the AI strategy and how it will support business growth. Through the adoption of an ecosystem orchestration strategy and the utilization of a digital marketplace, CSPs can swiftly collaborate with partners to develop and market solutions on a broader scale. This approach enables CSPs to expedite portfolio expansion and harness AI’s potential for service improvements and revenue growth effectively.

As AI continues to redefine the telecommunications industry, having the right business model becomes a strategic imperative for CSPs seeking to thrive in the digital era.

Angus Ward is the CEO of Beyond Now, bringing 30 years of consulting and solutions experience to his role, supporting organizations across multiple industries to shape strategies and adopt platform-based business and operating models with differentiating partner ecosystems.

Under his leadership, the company has transformed from a service-based entity to a SaaS-based technology company, expanding into ecosystem orchestration platform and digital marketplace solutions, strengthening both internal innovation and Beyond Now’s competitive advantage.

In 2021, Angus led a successful management buyout backed by private investors which saw Beyond Now become an independent technology company with a vibrant global customer community of leading telecoms and technology organizations.