By Bernhard Kraft, Head of Product Management, Optiva
The telco industry has been obsessed with network capacity for years, well beyond consumer interest. The speeds, bandwidth, and latency figures for 4G, 5G, and now 6G have dominated headlines and industry discussions for years. However, the rapid rise of AI and GenAI has now claimed the spotlight.
Nowhere was this clearer than at Mobile World Congress 2024, where, at least in terms of signage, content, and messaging, the focus was on GenAI while network bandwidth retreated to the shadows. I welcome this shift in perspective, not because speed and bandwidth aren’t important (they are) but because AI has the power to capitalize on the underlying network capabilities on which headline-grabbing innovations are built.
Take customer data for example. Telcos have long understood that their vast mountains of data have the potential to improve operational efficiencies across the board for themselves and MVNOs. These data mountains are better-termed data gold mines, cataloging millions of network events occurring every millisecond, every minute, and every day. However, this data gold mine only has value if the MNOs and their MVNO partners can directly mine, analyze, and monetize this data in real time.
It’s a big “if.” BSS data can predict customer churn, highlight behavior trends, help MNOs and MVNOs zone in on high-value customers, and identify market opportunities. Yet, it delivers little transformative value if it sits siloed in legacy systems with limited or no accessibility. The challenge for MVNOs who depend on their MNO’s legacy BSS platforms has always been accessing and harnessing this data in real time.
How AI is unlocking the telco value creation model
Data-driven, digitally native competitor businesses have quickly capitalized on the ability to access, analyze, and predict customer behavior. As a result, it has rapidly eroded profit margins for many telcos. Unlocking the limitless value of telcos' treasure troves of customer data is paramount. Therefore, many pioneering players are turning to AI as a powerful and accelerated route to value transformation and operational overhaul.
By harnessing BSS data to train advanced AI systems, increasing numbers of companies, especially MVNOs, are successfully improving every aspect of business operations. Sophisticated chatbots, powered by generative AI models harnessing large language models (LLMs) and natural language processing (NLP) fueled by BSS data, can now handle complex customer service interactions. Additionally, real-time BSS data that feeds into AI-powered revenue and cost models can help MVNOs tailor offers according to usage trends, combine services, and improve customer experience. AI-powered BSS is redefining what a traditional MVNO looks like.
It is little wonder that MNOs and MVNOs are evaluating the wide-ranging potential applications of AI-powered BSS data within their businesses. With many ways to harness AI-powered insights for smarter business operations, new market-entrant MVNOs need help knowing where to focus their investments. So, let's examine the three surest routes to rapid value transformation for MVNOs embarking on AI-powered BSS modernization.
1. Leverage BSS data to improve customer retention
It's an uncomfortable topic: customer churn. AI-powered analytics are a MVNO’s best weapon in a market that makes it increasingly easy for customers to churn. Why?
Traditional churn prevention strategies effectively started once a disgruntled customer called to cancel their subscription. AI-powered churn prevention acts much earlier because most customers provide telltale indicators that they are considering alternatives long before they churn. These include red flags, such as failing to pay bills on time and lodging customer service complaints. It also includes more subtle sentiment analysis, such as using negative language in chatbot communications or failing to respond to messages and deals.
Ultimately, churn costs MVNOs dearly in lost revenue because of the high cost of acquiring new customers. Despite it being easier than ever before for customers to switch services, churn is not inevitable. MVNOs that proactively reach out to high-value customers with discounts, loyalty schemes, and tailored resolutions (or operational improvements based on negative feedback) are more likely to succeed in retaining customers.
2. Better bundling based on data insights
Smart bundling is associated with improved customer experience, lower levels of churn, and improved cross- and up-selling. To succeed, MVNOs need to get closer to each customer by understanding usage patterns as they happen. Crucially, they must use these patterns to predict what the customer will want next.
AI-powered BSS insights are invaluable in spotting market opportunities for MVNOs to tailor and bundle offers and services better. Thanks to integrating advanced BSS-based analytics with agile operations, we have seen a wave of innovative bundling strategies succeed in recent years.
For example, one African MVNO considerably boosted the uptake of its offers by regionalizing them based on 30 geographic locations. Other MVNOs have successfully identified dual SIM usage and created tailored offerings to suit that segment. There’s also a growing trend in bundling mobile services with other standard services customers already use.
For instance, the Dish Wireless deal with Amazon gives Amazon Prime members money off its “Boost Infinite” package, making Prime membership much stickier. Nova Energy in New Zealand offers mobile services bundled with utilities, meaning customers get a good deal on their energy prices and mobile services via a simple, unified bill at the end of each month.
3. Giving consumers ultimate choice and control through self-service
Humans may be social beings, but when it comes to resolving customer service issues, not so much. Instead, self-help options are consistently more popular with consumers, but only when done well. According to a recent survey by Zendesk, three-quarters of those polled saw self-service as a convenient way of addressing customer service issues. Further, two-thirds preferred it to talking with a company representative.
Successful self-service is becoming a competitive differentiator. This is especially true as customer service chatbots move from information retrieval and basic issue resolution to handling more complex queries and even being able to offer personalized, contextual solutions.
By integrating real-time BSS data with advanced, generative AI, MVNOs are finding new ways to keep customers happy, identify cross-selling opportunities, and reduce friction. For example, Guinea Mobile in Peru uses a highly flexible, AI-based BSS solution that streamlines the onboarding process for new customers down to just four clicks.
MVNO innovation has AI-powered BSS at its core
AI-powered automation, leveraging unprecedented data scale and speed, is set to transform the business operations of MVNOs and MNOs who seek to open the door to new MVNO partnerships. Equipped with valuable customer data, telcos must adapt or face digital disruption. Advanced AI techniques facilitate more personalized customer experiences, enhance operational efficiencies, and drive value creation. However, to fully harness AI's potential, it must integrate seamlessly with a contemporary BSS platform designed for real-time analytics.
The most successful MVNOs are already modernizing their systems from the inside out. They're starting with their own BSS stacks and harnessing data insights to drive operational and service improvements and deliver a new level of customer experience. MVNOs who do not prioritize this will find themselves far behind in the customer retention race, as will the underlying MNOs.