In this report we update our model of the financial value of adding AI, analytics and automation (A3) into a telco’s processes. The focus of this update is the network and OSS. In these domains, our bottom-up assessment shows that telcos can achieve financial benefits amounting to 5% of annual revenues.

Unlocking value using A3 in the network and OSS

In this bi-yearly update of the financial value of deploying AI, analytics and automation (A3) into a telco, we have focused on the most important area for A3 deployment: the network and operational support systems (OSS). A second part covering all other areas (customer channels and sales and marketing) will be published in the second half of 2024.

In this edition, we examine the impact of A3 technologies on industry focus areas in the network, such as service orchestration and the autonomous network. We also provide a deep-dive into the potential uses of generative artificial intelligence (AI) in the network and OSS.

There are two previous editions to this update (which covered all operations, not just network and OSS):

• A3 for telcos: Mapping the financial value (2020)
• AI & automation for telcos: Mapping the financial value (2022)

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Methodology of analysis

We estimate the financial value of AI, automation and analytics through a bottom-up analysis of potential capex savings, opex savings or revenue uplift from integrating these technologies into 46 processes across a telco’s network and OSS.

This value is measured on an annual basis in US dollars and as a proportion of total revenue for a standard telecoms operator (see the full report for how we define this).

This report illustrates how the use of A3 can improve the processes in the network and OSS and can create financial value. We have split our analysis between two main types of processes: service management and resource management and virtualisation. For each, we provide the overall breakdown of the financial value and detail the value of specific line items. We also explain the changes in outcome since the previous iteration in 2022.

A3 generates substantial value in the network and OSS

Our financial analysis shows that an average telco can save the equivalent of 5% of its revenue (US$816 million) annually by deploying A3 in its network and OSS processes. This will be achieved by AI, automation and analytics contributing to a decrease in capex and opex and lifting certain revenues. Notably, this value is primarily driven by the application of A3 in resource management, which generates nearly half the overall financial value.

Financial value of A3 (AI, analytics and automation) per year

Source: STL Partners

Table of contents

• Executive summary
• The value of A3 in a telco network and OSS
• Progress of A3 in the telco network and OSS
• Use of generative AI in the network and OSS
• Conclusion
• Appendix

Related research

• AI & automation for telcos: Mapping the financial value
• A3 for telcos: Mapping the financial value
• Automation: Reaching full potential
• A3 in open RAN
• Generative AI and beyond: Preparing for future A3

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Charlotte Patrick

Charlotte Patrick

Associate Senior Analyst

Charlotte has 27 years of professional experience in strategy, marketing and finance. Most recently in the largest global technology analyst firm and previously two of the worlds largest global telecommunications companies. She is an electronics graduate and MBA with excellent business analysis, commercial and strategic planning skills.