Developing New Services and Revenue Streams with AI
In addition to improving operations, AI is transforming the digital industry by enabling new revenue streams and service offerings. Telcos have been offering new services, beyond connectivity, for the past 15 years, with various degrees of success. In 2024, they still need to increase revenue from existing customers and to attract new customers on new services to stay relevant. As AI is attracting public interest as well as some degree of anxiety from users, telcos can rely on their clients’ trust and their image as providers of solid, reliable infrastructure for the digital age. This section explores various strategies to create new business opportunities thanks to AI.
One strategy is to offer AI as a service to business customers. This involves providing foundational AI services that companies can leverage, even if they lack extensive technical resources. For instance, a telco may provide a service where each business can easily get access to a chatbot drawing from its own private set of documents – without security or confidentiality risks.
This service can be offered in a secure, national environment, ensuring data sovereignty, privacy and confidentiality. The infrastructure can be owned and managed by the telco, providing a secure and packaged solution for organizations. This approach allows them to leverage AI without the hassle of setting up their own infrastructure or worrying about data security and data security regulations.
For example, Orange Business, in collaboration with the LightOn startup, has recently launched for French customers a range of “Trusted GenAI powered by Orange Business” services (source).
As demonstrated by the recent partnership between Telenor and NVIDIA, Telcos might have a role to play in the AI ecosystem beyond pure connectivity or value-added services. Through this partnership, Telenor aims to become a sovereign AI cloud partner of NVIDIA to drive the adoption of AI solutions in the Nordics, providing infrastructure for businesses, while focusing on reducing the environmental footprint of AI services. A sovereign AI cloud is certainly of interest, similar to the sovereign infrastructure and platform clouds which are being created all over Europe. It enables a company dealing with sensitive data, such as national security data or very confidential information, to still be able to benefit from AI powered by cloud services.
Another strategy is to develop services powered by Generative AI. These services could be complementary to connectivity and could cover for instance translation services or value-added voice services. A telco could offer a translation service that allows users to talk seamlessly in two different languages. A telco could provide a service for professionals (hairdressers, doctors, lawyers…) to make an appointment.
While some of those services may already be embedded in the latest smartphones (translator, personal assistant…), they could be more powerful if provided by the operator. This is because running these services on a phone requires a lot of computing power and drains the battery. If the operator provides these services, users wouldn’t need the latest version of the operating system, and battery usage would be significantly improved.
Some telcos also explore new revenue streams with AI by entering the handset space, like Deutsche Telekom’s vision of an AI phone with a language model running locally (source). With an AI phone, users wouldn’t need to use menu-driven mobile applications to order products or use services. Instead, they could simply chat/talk to their phone, and the AI assistant would do the rest. These AI assistants are the new generation of Google Home, Alexa and the likes, this time with a broader set of capabilities and mostly, a close to human-like interaction level powered by Large Language Models.
