To get ahead of the competition and future-proof their offerings, communications service providers (CSPs) must constantly seek innovative ways to drive resilient growth and retain their customers. And telecom operators that make the Netco/Servco split can see a significant improvement in their financial performance. For example, CSPs undergoing a Servco transformation stand to increase their B2C margins to 15-20% according to McKinsey & Co. The Netco/Servco split involves separating the network infrastructure operations (the Netco) from the customer-facing services and applications (the Servco). This allows each entity to focus on its core competencies, fostering greater agility and specialization—ultimately fostering a superior customer experience. AI is set to accelerate this transformation by enabling automation, intelligent network management and personalized service delivery.
What strategies are the leading CSPs using? And how are they leveraging AI in pragmatic ways to grow customer loyalty as well as revenue? CSG Chief Strategy and Product Officer Chad Dunavant sat down with TM Forum for an interview on how CSPs are navigating the new era of personalized digital engagement and optimized data analysis. Here’s what he discussed:
- Netcos vs. Servcos: Operators can leverage the distinct advantages of Netco and Servco models and focus on flexibility and cost efficiency in their service offerings.
- The role of AI in enhancing customer experience (CX): AI is playing an ever-larger role in customer engagement, both in call centers and online. Find out what AI means for optimizing networks, enhancing performance and increasing efficiency for Netcos and Servcos.
- The importance of CX and data utilization: How can companies improve CX through personalized engagement and targeted service offerings? Chad explains how leveraging large data sets to predict and meet customer needs effectively will be a critical differentiator for operators.
What strategies should operators use to evolve into network companies and platform-driven service companies? What role do you see AI playing in the realization of those strategies?
Chad: Let me start with the service side first, or what we call Servco. This is not a new business line for them [operators] but they need to think about the realities as they approach the new consumer demand. On the Servco side specifically, they need to look for flexibility and cost avoidance. They need to look for opportunities that allow them to launch new digital services more quickly at scale, leveraging applications that run in the cloud natively. Applications delivered through SaaS really allow the operator the flexibility to launch these new services more quickly, more cost effectively and targeted at those consumers.
On the Netco side, it’s interesting as we see the network services become a focal point for that side of the business. [These include] ways that [operators] can launch new partner ecosystems to onboard new services quickly, ways that they can configure complex services within those ecosystems to maximize revenue and really take advantage of those network investments [from] over the last several years.
And as it relates to AI, I think AI will find its way across both opportunities—so on the Servco side, AI is going to play a role in how you engage with customers both in the call center and online. And more specifically, on the network side, we’re going to see network optimization through new AI strategies.
How does this evolution impact customer experience and revenue growth in the telecom industry? What can CSPs measure so they can assess the impact of their AI investment?
Chad: As operators think about this new paradigm, customer experience is going to be at the forefront. One of the reasons why CSG has invested so heavily in our customer experience platform and integrated it into our BSS suite is to allow operators to really take that opportunity to the market. Being able to understand the specific needs of each customer as it relates to those service offerings will become critical. And we believe that’s going to happen in two forms:
One, within how you optimize the customer relationship: knowing how you engage with customers on a personalized level, reacting to their needs specifically and not in groups, but on a personalized level. And number two: as I think about new revenue opportunities, how do I target a customer with specific offers within my catalog? How do I promote services that are relevant to them and what they want to get out of the operator’s service plan? [That] will be critical.
As CSPs prepare for a new era of AI-driven growth opportunities, how can they use this insight to boost competitiveness and expand and retain their customer base?
Chad: As CSPs think about the competitive differentiation that they have, it starts with the data. Sitting on the large amounts of data that they have, being domain specific about how they use that data and targeting specific customer attributes will allow them to engage with customers in a unique way.
Specifically, we’ve seen ways in which we can leverage that data to engage with customers around invoices, for example. Being able to tell a customer why an invoice change happened in advance of them calling into the call center can have a direct impact on cost savings and cost avoidance, but also on customer experience. So being able to engage with customers on that personal level by targeting the specific data sets that exist in the operators’ environments will be a critical differentiator.
You can watch TM Forum’s interview with Chad here.
Why CSG?
The key moments for your customers might already be happening, so why delay making a difference? As Chad explained: CSPs can take many paths forward as they evolve into Netcos and Servcos. Which path your business takes, and how you choose to leverage emerging technologies will determine your success.
CSG has decades of experience helping businesses worldwide with SaaS solutions tailored for any scenario. As committed partners, you can tap our expertise to ensure your company’s success under any conditions.
