Is the new ‘Genie’ genAI interface the answer to boosting EBITDA?
The GenAI genie redefines CX - Phase II Catalyst aims to create a genAI interface which understands various data types to improve EBITDA for the communications industry
Is the new ‘Genie’ genAI interface the answer to boosting EBITDA?
Commercial context
CSPs have an opportunity to use generative artificial intelligence (genAI) to make a significant commercial leap: by some estimates, genAI can boost EBITDA (earnings before interest, taxes, depreciation, and amortization) by up to 30% by enhancing revenue, profitability and operational efficiency. There is no doubt that the communications industry must adopt genAI to develop interactive interfaces that can transform business operations and revenue models, but questions remain over how these can be implemented effectively.
Like many other businesses, CSPs face the ‘productivity paradox’ challenge, where the promise of new technologies may lead to productivity dips if not integrated with the right processes and frameworks. This means CSPs need to pick off those business challenges and AI use cases that will yield the greatest upside. To be thoughtful about how to leverage their existing data sources, channels and software choices and enrich them with cutting-edge ways of working and AI / genAI tooling. CSPs will also need to be vigilant to the carbon implications and ethical considerations that stem from heightened AI usage, adapt their models per application and ensure that fairness and, where appropriate, human oversight are baked in.
The solution
Building on the success of last year's award-winning Catalyst, which achieved significant reductions in customer churn and boosted average revenue per user (ARPU) among participants, the GenAI genie redefines CX - Phase II initiative expands its focus to directly target EBITDA growth. The plan includes both revenue enhancement and cost-reduction strategies within the Genie’s interface.
The Genie uses multimodal AI to understand and respond to various data types, including text, images, and even video; unlocking new possibilities for customer interaction and operational optimization. By integrating AI automation, the Genie optimizes existing processes, automating repetitive tasks, reducing errors, and freeing up human resources for higher-value activities. This approach directly addresses the productivity paradox, ensuring that AI enhances rather than hinders efficiency. Additionally, a modular governance and responsibility framework ensures the ethical and responsible use of AI, fostering trust and maximizing potential benefits, which is key to achieving a sustainable 130% ROI.
The implementation strategy is built on last year's proven Pega framework, and uses AI and genAI to improve decision-making and real-time delivery of contextually relevant actions that enhance customer experience. The integration of various AI types and the use of real-time data aid the process of continuous learning and improvement, while TM Forum assets such as Open APIs and frameworks are strategically employed to streamline processes, enhance data representation, and support AI models that drive revenue and cost-saving decisions.
The primary objectives (and expected outcomes) are a 10% increase in revenue across connectivity-related revenue centers and a 19.6% reduction in costs in network operations and customer service. These targets are underpinned by KPIs including call deflection, reduction in on-site visits, decreased network downtime, shorter average handle times (AHT), improved Net Promoter Scores (NPS), and lower customer churn rates.
Wider application and value
The broader application of this Catalyst is a framework for the industry to follow for operational efficiency and EBITDA growth. Yet there are a number of other opportunities for cost reductions and revenue growth based on comparable implementations in similar industries. Alphabet, for instance, achieved a 57% reduction in repair process delays, while UPC reduced internal costs associated with move requests to nearly zero.
On the revenue front, Telenet saw a 43% increase in digital sales, illustrating how AI can open new revenue streams and lower customer acquisition costs. Customer experience improvements are equally notable, with Virgin Media Ireland experiencing a 15% increase in NPS and a 20% reduction in churn, directly translating to retained revenue and competitive advantage.
As distinguished architect at Verizon Communications Rahul Sharma explains, “the limitation of context often excludes valuable insights from historical data like past interactions, order history, previous incidents as well as ongoing network activities and events. Building on its previous phase, the Catalyst addresses this challenge by leveraging Gen AI to transform the customer service experience. By correlating a customer's full history with network events and real-time interactions, the effort aims to enable a hyper-personalized correlated conversation empowering both customer and care teams to resolve issues more effectively."