Opportunities and challenges for telcos in 2024

By: Jesus Ma. Lava III

ONE of the hard lessons learned from the pandemic was that the Philippines needed to address its slow, spotty network connections, especially in this new, borderless world of work. In 2020, as employees and students sheltered at home and dove headlong into fully remote work and learning, it quickly became apparent that some districts were better prepared than others to accommodate the "work/study where you live" arrangement.

Since then, local telco companies have made significant investments to improve their services nationwide and to keep up with the changing behaviors and preferences of users — individuals and enterprises alike. Moving forward, telcos are now faced with new challenges and opportunities in a post-pandemic market, including the rise of artificial intelligence (AI).

Like many industries, telcos are already seeing the effects of generative AI (Gen AI) on their operations as they explore use cases for this powerful technology. Opportunities are emerging, especially in customer care, customer service, and network performance. This will be particularly useful for local telcos that struggled to handle the volume of customer complaints during the height of the pandemic and so sought to divert simpler customer concerns away from limited employee agents to allow people to focus on more complex transactions. With the use of Gen AI, telcos could significantly expand the capabilities of chatbots, for example, empowering these programs to handle more kinds of customer issues and, more importantly, resolve these problems more quickly.

Operationalizing Gen AI will require the right foundations and ecosystem relationships. For starters, telcos will have to break down data silos to allow Gen AI to make sense of information across different parts of the business. Bringing together customer care transcripts, network logs, and maintenance records, for example, will give customer service agents and field tech officers deeper insights that will lead them to the best course of action.

Giving Gen AI widespread access to data may necessitate stronger data security and compliance strategies, especially surrounding the use of personally identifiable data and sets that may combine public and private data. Telcos will have to revisit their data quality and governance models in order to mitigate the risks associated with the use of Gen AI.

Another concern attendant to the use of Gen AI is having the right talent to oversee it. Remember that this technology only came to the fore in 2023 and even its developers have emphasized the need to deploy AI responsibly and place it in the hands of the right people. Do telcos have those people on board?

Probably not. As with other sectors, one of the biggest limitations in scaling Gen AI is access to talent. Organizations across industries are looking to hire data scientists who can help condition data and develop training sets and guardrails to ensure Gen AI produces reliable and valid results. Security specialists are also in high demand as this technology opens organizations to new vulnerabilities and risks.

In order to compete for limited, and likely very expensive, talent, telcos will have to adjust to the new ways of working, which we are already seeing across industries. For one, workplaces have been shifting toward flatter organizational structures in an effort to give individual employees more power and autonomy and to enhance the overall nimbleness of the enterprise. Part of building this kind of environment is breaking down silos to allow for more cross-functional collaboration, especially when it comes to tackling complex problems.

Telcos will also have to get more creative when sourcing talent. They may have to hire from outside the industry to build a team with a diverse perspective and that can bring fresh ideas for reshaping the organization to make it more agile. Leaders may want to tap often overlooked talent demographics that can be trained with technical skills, including people who don't have traditional college degrees, young professionals who are looking for early career opportunities, or those returning to the workforce after a break.

Of course telcos should also consider retraining current employees, especially as technology changes business models and shifts talent needs from one function to another. Reskilling and redirecting employees to other capacities will allow organizations to continue benefiting from these workers' institutional knowledge even as they try on new roles and projects.

The year ahead promises to be an exciting one for the telco sector as tech capabilities open new doors to new ways of working and new services for a growing customer base. According to the Economist Intelligence Unit, the internet user penetration rate in the Philippines jumped from nine per 100 people in 2009 to an estimated 57 per 100 people in 2022. That figure is expected to hit 80 per 100 people by 2027. With the right infrastructure, tech, and talent investments, local telco players stand to make great strides in the country's connectivity landscape, especially for underserved areas. In an increasingly digital market, that will make a world of difference.

As published in The Manila Times on 26 February 2024. The author is a Risk Advisory Partner at Deloitte Philippines.