Today’s customers operate in a world shaped by instant gratification. They expect seamless, personalized experiences, delivered on demand. This “Netflix generation” has high expectations across all sectors, and the telecommunications industry is no exception. Customers demand more from telcos than ever before: reliable networks and connectivity everywhere are taken for granted, they want "always on" services tailored precisely to their needs. At the same time, providers face intense competition, not just from sector rivals, but also from agile digital-native players and over-the-top (OTT) service providers.
According to telco industry association the TM Forum, revenues from traditional voice and private networks services are declining by 5% per year as customers move to IP and cloud-based communications services. The challenge is clear: deliver more value, faster, with greater efficiency, all with constrained budgets. Artificial intelligence (AI) is no longer a ‘nice to have’ but fundamental to meeting these heightened expectations whilst improving profitability and return on investment. The AI native telco can forge stronger customer relationships and also unlock new avenues for growth.
How AI driven CX is different
The potential of AI in transforming customer experience extends far beyond basic hyper- personalized marketing communications. Teradata has partnered with telcos around the world to use granular data to provide real-time communications and market to an audience of one for years. Now, leveraging this experience with vast amounts of customer data from across all departments and functions, we are helping fulfil the promise of truly AI-driven CX. Emerging AI native services are not only intrinsically personalized but autonomously adaptive to respond to customer interactions and other data ‘cues’ in real time.
Self-service will reach new levels of sophistication, with AI-powered virtual assistants capable of understanding complex queries, providing instant support, and even automating service provisioning. The rise of generative AI (Gen AI) opens doors to entirely new service paradigms. Concierge-like services, powered by large language models (LLMs), can offer personalized recommendations and automate aspects of a customer’s digital life. The concept of ‘agentic’ AI, capable of understanding user needs and proactively taking actions like finding relevant offers or even negotiating lower-value deals, is moving closer to reality.
Consulting firm McKinsey reports that 42% of telecoms executives identify scaling agentic use cases across functions as a priority for 2025, with 75% of these aiming to use agentic AI for CX purposes. Compared to other industries, telcos already have fairly advanced customer insight capabilities offering consistent 360-degree profiles. Plus, they have well-established and highly regarded customer-facing brands. They have a unique opportunity to leverage these assets to pioneer cutting edge agentic AI services and catalyse customer adoption and build trust.
The steps towards AI native CX, and who’s taking them
The journey towards this AI-driven CX transformation demands a strategic focus on use cases that deliver tangible business value. Operators are increasingly prioritizing AI applications that improve customer retention, boost average revenue per user (ARPU), and streamline critical customer-facing operations. We have worked with leading telecommunications service providers across EMEA to deliver measurable returns on these key metrics. For example, providing one leader in Eastern Europe with daily usage analysis, churn rate data and spend effect measures, helped halve churn rate and deliver a $70 million revenue benefit. With another, incorporating speech analytics at the call centre contributed to a 10% increase in net promoter scores.
AI-powered chatbots and call summarization lead to reduce cost per call and increase customer resolution rates. AI-driven marketing not only allows hyper-personalized real-time offers and dynamic pricing, but the acceleration of new product and service introduction enabling telcos to rapidly respond to events with promotional offers and bundles at the right time and in commercially advantageous ways.
Essential foundations for AI-native CX
These examples demonstrate a clear shift towards leveraging AI not just for internal efficiency but for direct customer benefit and revenue generation. But, building these AI-native CX strategies requires strong foundational elements. Creating value for millions of customers using billions of data points requires efficient AI inference at scale. Enterprise-wide data platforms are paramount, providing the clean, consistent, and accessible data that AI algorithms need to function effectively. Typically, relevant and valuable data is scattered across many different systems and operational departments. Operators must break down data silos and establish robust data governance frameworks to unlock the full potential of their information assets.
Once data is aggregated and available, integrating AI models to train and provide inference capabilities directly within database functions is essential. Taking AI to the data is faster, more reliable, secure and more cost effective than creating new silos of AI data. Teradata’s VantageCloud can support analytics and model scoring in database delivering AI at scale in public and private cloud as well as on prem deployments.
Embedded AI, at scale
The time for simply experimenting with AI in customer experience is coming to an end. Telcos must now accelerate the transition from proof of concept (PoC) to embedded AI, deployed at scale across their operations and service offerings. Reusing successful AI models and scaling their deployment is crucial for realizing meaningful impact. The competitive threat from digital-native players who have AI at their core remains significant. However, telecommunications operators possess a powerful advantage: the trusted brand relationship they have cultivated with their customers and their existing deep knowledge of those customers. By strategically embedding AI into their networks, services, and customer interactions, they can leverage this trust and enhance these insights to bring a new generation of intelligent and personalized experiences to market. The opportunity is huge: to redefine how customers interact with their telecoms providers, fostering loyalty, driving revenue growth, and solidifying their position as indispensable partners in an increasingly digital world.