FICO predictions for the telecommunications industry in 2020

JAKARTA (IndoTelko) - The proliferation of mobile devices was one of the biggest technology breakthroughs of the last decade. The rapid growth has since led the telecommunications sector to push for 5G, that will finally become a reality in 2020 for several markets in Asia Pacific (APAC). 

In other markets where 5G deployment is years away, the focus lies on other areas such as payments and identity, according to GSMA Intelligence.

As we look forward to a new decade marking yet another evolution for mobile networks, we share our thoughts on the areas that will potentially impact Communication Service Providers (CSPs) in a big way this 2020:

1. A brand-damaging AI project will make headlines
Artificial intelligence has certainly reached the top of the hype curve during the last couple of years. According to IDC, APAC’s telecommunications sector was mentioned as one of the top industries that would see the fastest growth in AP expenditure. 

However, the deployment and use of AI could well have unintended consequences. As outlined recently by Scott Zoldi and Kate Crawford at FICO World 2019, algorithmic bias can creep into decisions made by AI.

For example, if AI is used in the hiring process, the algorithm might look at previous employees that were successfully hired at the company. If the company isn’t very diverse to begin with, this can lead the machine to conclude that it should only look at hiring individuals that share similar working histories or traits to those that have been employed previously. This perpetuates the lack of diversity.

Going back to an example this year, Apple which launched their credit card in the U.S began issuing smaller lines of credit to women than men. There was a lack of clarity on how the algorithm worked and explanation on the output.

“Given the current lack of control and governance around AI, and that even Apple can mess up, it is conceivable that a large CSP will deliver a project that drives unexpected results and adversely impacts customers as an outcome of poor data science rigour.” said Mel Prescott, Telecoms Practice, Principal Consultant, FICO.

2. Financial inclusion initiatives will help accelerate monetisation of GSM data
Mobile for Development remains one of the pillars for GSMA’s strategy, be it for financial or digital inclusion or to reduce the gender gap of mobile ownership and use within developing markets. The ability to offer financial products where there is little to no credit bureau, yet almost ubiquitous phone ownership, offers opportunity for both CSPs, financial services institutions and consumers.

Telcos have been raving about the potential of monetising their data assets, but have faced mixed success, due to the data privacy implications or regional regulations. Operators should be looking at a different lens and offer their customers more digital financial inclusion initiatives, in return for their data.

3. CSPs will start to centralise group-level decision platforms
As the practical use of advanced analytics such as AI becomes more widespread, so will the consideration and adoption of platforms that are able to execute based on machine learning. These decision management platforms can be applied across the customer lifecycle, including Network Function Virtualisation (NFV) / Software-Defined Network (SDN), customer onboarding, loyalty and retention and customer care. Over in Asia, Indonesian telecommunications provider Telkomsel has deployed chatbots to answer most customer queries. 

Several large CSPs have numerous companies across the group, with many local installations of such platforms. These groups will begin to evaluate how cloud-based scalable decision platforms will enable consistency across the organisation, reduce the overall cost and complexity of vendor management, plus allow centralisation to become a reality. A standardised approach to decision management will also help to streamline centralisation and facilitate activities.

4. CSPs will start getting better at personalisation
How well does your telco know you? With various distribution channels, such as mobile and web becoming more integrated, telecommunication organisations now have the chance to take customer engagement to the next level and accelerate the user experience.

According to McKinsey, advanced analytics will serve as an enabler for telecoms to cross-sell value added services. Given how users are comfortable with Netflix and Amazon taking personalised marketing up a notch, telcos should try to personalise offers through a decision-making platform powered by prescriptive analytics to engage with their audiences.(es)