Automation, AI and data analytics are driving telco strategy
STL Partners has been at the forefront of identifying network and service automation opportunities for telcos since 2016. Our report Network AI: The state of the art outlined the telco automation journey as a continuum of four stages: from business intelligence, to fixed-policy and ML-supported (or augmented intelligence) automation, and finally to fully autonomous systems. In Telcos and AI: What it will take to create an AI-driven telecoms industry, we discussed the state of AI in the telecoms industry and took a deep dive into the specific technologies available.
The telecoms industry can no longer rely on manual operations. Automation is a necessity for operators to manage business and technological complexities in creating new digital services and B2B2X business models. Operators are expected to provision best-in-class connectivity services, while managing underlying network complexities with quality, resiliency, and speed.
In this report, we focus specifically on automation within network and service operations (See image below). While rules-based automation has been around for decades and is well embedded into network processes, AI is at a more nascent stage where most implementations are in small pockets or proofs of concept (POC). For the purpose of this report, we have regarded “automation” as an umbrella term encapsulating rules-based automation and AI and ML assisted automation.
Key automation use cases in network and service operations
Source: STL Partners
The report discusses findings from a research programme conducted by STL Partners between December 2020 and February 2021, consisting of an online survey of 100 individuals working at telecoms operators and an in-depth interview programme with 15 leading operators. Drawing on insights from this research, we will discuss the current state of the industry and operators’ future ambitions for automation in network and service operations, and highlight regional nuances between operators from the Americas, APAC, Europe, and Middle East & Africa.
Network and service operations are the critical domains for operators to consider automation, as the payoff for being highly automated in these areas will be game-changing. We predict implementing automation technologies in network and service operations can deliver greater financial value than all other domains combined. For an average operator, this is equivalent to 5.7% of its total annual revenues, or $850 million, from revenue uplift, CapEx and OpEx savings.
The current state of automation in network and service operations
Automating network and service operations will deliver the largest financial impact for a telecoms operator
Source: STL Partners, Charlotte Patrick Consult
Over the past decade, all operators have made progress in adopting automation within the network and service operations domains. Results from our survey show that operational areas where operators can leverage mature, pre-existing vendor solutions tend to be the most highly automated. For instance, operators report greater degrees of automation for network fault detection and root cause analysis – an area where pretrained models from vendors are widely available – than for network function lifecycle management, where vendor solutions are still nascent.
- In our survey, less than 10% of operators reported being fully automated in any single network or service domain. The majority of operators indicate they are still in the mid-stages of automation with a mix of automated and manual processes.
- Our data show that operators on average have achieved around 40% of “intra-process” automation, i.e., automating processes within a single domain, while very few achieved “inter-process” automation linking across different domains.
Despite this, the industry still has a long way to go to achieve “full automation”. Operators are automating individual functional units at different speeds, depending on their geography, network focus, and maturity. In fact, for most operators, the network and service domains are lagging behind, and higher levels of automation are being seen in domains like HR and sales and marketing.
Some flagship automation use cases are gaining maturity, but none are close to being fully automated
Source: STL Partners telecoms survey, March 2021, 100 respondents
Not all telco automation journeys are the same: Ambitions, region and maturity all impact adoption
Impact of changing ambitions
The ongoing conversation about automation within network and service operations will be shaped by operators’ changing attitudes towards how critical network and service domains are to their business. Our data indicates that operators are becoming increasingly divergent in their approach.
- There are two main camps: those who believe that the network will always be their main differentiator versus those who are increasingly exploring new network agnostic opportunities. These could include platforms, applications and solutions.
Both camps are pursuing automation – this bolsters our claim that automation is not a choice, but a requirement for all operators to remain commercially competitive. However, differing end goals does present different priorities.
Changing ambitions in the telecoms industry bring automation to the fore
Source: STL Partners telecoms survey, March 2021, 100 respondents
Impact of different regions and market position
These aspirations are shaped by market positioning; new entrants will not have to undergo as significant a journey as incumbents who need to reshape their employees, technical capabilities and operating model. For new-entrant operators, automation is often at the core of their business strategy, enabling them to quickly build out, scale, and manage a cloud-native network with a limited workforce. One APAC challenger operator described automation and a DevOps approach as being essential to their ability to roll out a greenfield network and accelerate 4G site commissioning from 3-4 days to 8 minutes.
Operators’ ambitions in Europe are more diverged than in other regions
Source: STL Partners telecoms survey, March 2021, 100 respondents
Operators must adopt a building block strategy to account for their current state of automation in network and service operations, in order to successfully cross over from “connectivity” to “beyond”. This means taking a pragmatic, incremental approach in designing and implementing intelligent automation initiatives, starting with modernising existing and legacy networks.
Table of Contents
- Executive Summary
- Automation: How to get there faster
- Achieving automation: The building block strategy
- Automation, AI and data analytics are driving telco strategy
- Network and service operations: The current state of automation
- Not all automation journeys are the same: Ambitions, region and maturity all impact adoption
- Defining, evaluating, prioritising: Creating a successful building block strategy
- Step one: Defining automation domains
- Step two: Evaluating the importance of domains
- Step three: Prioritising automation domains
- Making automation bitesize: How to innovate
- Changing people, processes and culture
- Building trust in automated systems
- Automation chaining and managing domain interfaces
- Recommendations for the industry
- Appendix: Breakdown of telecoms survey respondents