EXTENDING THE

COMPETITIVE
ADVANTAGE
IN TELECOM

Chapter 1: Applying AI
Analytics Across Telecom
Networks & Business
In June 2017, the world signed up its five billionth
unique mobile subscriber. What’s more, by 2020 more
people will have more mobile phones (5.4 billion) than
electricity (5.3 billion), running water (3.5 billion) and
cars (2.8 billion).

These are not just milestones with big numbers. With

two-thirds of the world’s population now connected,
the telecom industry has a golden opportunity to offer
revolutionary change and innovation to nearly everyone
around the globe.

Along with this opportunity, however, telecom

operators are also under increasing pressure to increase
revenue and profitability. With subscriber penetration
saturated in developed markets, hyper-competition in
emerging markets,and over-the-top companies (OTT)
encroaching on content and communications services,
along with the race to build 5G networks, telcos are
under intense pressure to solve these challenges and
generate more revenue.

GLOBAL MOBILE UNIQUE SUBSCRIBERS AND PENETRATION

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2  Extending the Competitive Advantage in Telecom — Chapter 1.

 One approach many operators are now taking as a way
to optimize, disrupt and innovate is to embrace data,
machine learning (ML) and artificial intelligence (AI).

There are three primary reasons for this:

• OPTIMIZATION:
Data can be used to optimize customer interactions,
network design, planning, operations, sales and
marketing - resulting in optimum CAPEX and OPEX
resource allocations.

• DISRUPTION:
Data can be used to disrupt existing incumbents
in the marketplace. Whether transitioning to
a multimedia provider or being a smart cities
provider, analytics can help telecom operators
increase their probability of success.

• INNOVATION:
Data-driven decisions can identify new market
opportunities, streamline decisions and prime an
organization for rapid execution. The next product
incarnation or content acquisition will most likely
be driven by data that telecom operators can find
through its network and customer interactions.

GLOBAL MOBILE REVENUE VERSUS SUBSCRIBER GROWTH

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3  Extending the Competitive Advantage in Telecom — Chapter 1.

WHY MACHINE LEARNING AND AI?
The coming decades are going to bring about even
more dramatic changes in our society. Virtual reality,
AI, autonomous vehicles, biometrics, nanotechnology,
genetic engineering, space tourism and smart cities
are just some of what we can expect to reshape all
aspects of our life. With these technologies, we’ll be able
to transform from the age of digitization to the age of
‘automation and the connected life’.

DRIVERS OF TECHNOLOGICAL CHANGE

Age of industrialization Age of digital transformation Age of automation and the connected life

Artificial intelligence
ENABLERS
Horizontal in that they impact the Analytics
process of transformation as opposed
to specific sectors or industries Cloud

Smartphones and smart devices

Software

Computing power

Connectivity

1970 1980 1990 2000 2010 2020 2030

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4  Extending the Competitive Advantage in Telecom — Chapter 1.

In this increasingly complex and connected world,
communication networks will need to utilize the
advantages that big data, ML and AI bring. Adopting
these technologies will not only lead to greater
efficiencies, but also to increased revenue and improved
margins. Internet giants Amazon and Netflix, in
fact, have seen significant cost savings and margin
AI ADOPTERS WITH A PROACTIVE STRATEGY HAVE SIGNIFICANTLY HIGHER PROFIT MARGINS
5  Extending the Competitive Advantage in Telecom — Chapter 1.
improvements through the adoption of robotics and
recommendation algorithms. Additionally, a survey by
McKinsey & Company revealed that companies with a
significant adoption of data, ML and AI have reported
higher profit margins than those who haven’t.
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Most operators have started this process by building
big data lakes, using popular technologies such as
Hadoop, Mapreduce, HIVE, Kafka, Spark and others
- and then building their capability to become data-
driven organizations. In many instances, telecom
operators have become the leading adopters of these
big data technologies.
Most of telcos’ big data use has been designed to solve
a narrow range of problems such as churn reduction,
next best action, data visualization, dashboards and the
emergence of chatbots and voice-activated customer
interaction from large operators. However, the effective
use of ML and AI based approaches has been limited
to only some of the largest telcos. These operators have
invested a significant amount of resources, skills (data
science) and investment to solve specific problems in
silos - such as marketing, revenue assurance, network
operations and engineering.
All of these individual teams have different approaches.
As a result, the impact of AI/ML has been limited to
what a few data scientists and engineers can build with
mostly open source tools on a limited scale. Some of
these approaches, unfortunately, have ended up with a
lot of data, but no real knowledge.

ADOPTION OF BIG DATA BY VERTICAL INDUSTRY

Dresner Advisory Services Publishes 2017 Big Data Analytics Market Study | Copyright 2017 - Dresner Advisory Services

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6  Extending the Competitive Advantage in Telecom — Chapter 1.

SUCCESSFULLY INTEGRATING AI/ML
INTO TELCO ANALYTICS
Although we’re in the early days of ML and AI for telcos,
the industry’s potential for disruption is very real.
Telcos must focus on the most valuable use cases
across all aspects of the business. Teams should build
a common data infrastructure. They should partner
STEPS FOR ACHIEVING AI TRANSFORMATION
7  Extending the Competitive Advantage in Telecom — Chapter 1.
or acquire the capability to build a common machine
learning framework that can be used across the entire
organization and integrate ML into workflows and
processes. Supporting an open, collaborative culture
throughout will help the organization in fully realizing
the potential of AI and automation.
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AI ANALYTICS: TELCO USE CASES
Telcos must now focus on generating foundational AI/
ML building blocks to support various cross-functional
teams in an organization. Decision-making in Network
Engineering, Facilities Management, Operations,
Product Management, Revenue Assurance, Marketing,
Sales and Finance will need to depend on data, but at a
more fundamental level will need the assistance of AI/
ML to achieve business outcomes and avoid blind spots.
There is a growing appetite among telecom decision
makers for using AI and ML to solve critical business
problems. In a report published by Ericsson, in fact,
more than half expect AI to be adopted in their
networks before the end of 2020 (a total of 53 percent
globally) and there is a general expectation (55 percent
globally) that these benefits will be evident within one
to two years.
The graph below illustrates how AI/ML fits into the overall
network and business architecture of a telco provides
more insight into the architecture of how ML and AI fit
into the overall network and business architecture of a
telecom operator:

APPLYING AI/ML ACROSS TELCO’S NETWORK & BUSINESS ARCHITECTURE

Network Operations Network Engineering Product Planning Customer Care

Customer experience Marketing Regulatory Revenue Assurance

Users Finance IT Operations

Anomaly Prediction Recomendation Domain Specific

Forecasting
Detection Algorithms Engine Rules Engine

Optimization Process Process Natural Language

ML & AI BI & Reporting
Algorithms Mining Automation Processing
Capability

SQL/In-memory/
Data Ingestion/ MMS/OSS/BSS On-Premise Hadoop Cloud
Time Series DB
Refinement

Performance Data, Logs, Trouble Tickets, Billing, Clickstream, CRM, etc.

Data Context

Wireless Transport Fixed Core Voice/Data Business Support

Access Network Network Network Services Systems
Domains

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8  Extending the Competitive Advantage in Telecom — Chapter 1.

PAST, PRESENT AND FUTURE -
ANOMALY DETECTION AND FORECASTING
In a recent survey of telcos by Ericsson, network
capacity planning/management that plugged into
self-optimization and self-healing capabilities were
AREAS WHERE SERVICE PROVIDERS WILL
considered to be strong areas where AI/ML use cases
INTEGRATE AI
could be implemented. These use cases could be
implemented with Return on Investment (ROI) visible in
significantly reduced operating costs.

The dynamic nature of the services and networks

will require two key core areas of AI/ML technology:
anomaly detection and forecasting demand/behavior.

• Anomaly detection will be one of the key

ingredients for ensuring that underlying network
and business support systems can keep pace
with the high level of service requirements (low
latency, high reliability, high customer expectations)
required to support mission-critical applications.
As network complexities grow, managing and
monitoring the number of connections, devices,
radio networks, current and legacy core networks,
billing and IT operations becomes a cognitive
challenge. Not to mention human-centric
approaches such as dashboards, static thresholds
and business rules. These are simply not scalable,
efficient or cost-effective. A new approach and way
of thinking is required; AI/ML based approaches
must be adopted.

• Forecasting demand and behavior will be key

to enabling service providers to automate the
creation of network slices to support new usage
patterns. Forecasting user demand will ensure
that sufficient network resources are provisioned,
created and scaled ahead of usage. Forecasting at
a large scale is already yielding benefits for service
providers as well. For example, T-Mobile has reduced
Source: “Employing AI techniques to enhance returns on 5G
LTE congestion by 71 percent and is tackling the
network investments.” Ericsson AI & Automation.
optimization of the largest slice of the CAPEX pie of
any mobile telecom provider.
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9  Extending the Competitive Advantage in Telecom — Chapter 1.

Today, anomaly detection and forecasting happen To avoid these bottlenecks, service providers must
with multiple teams spending months to organize foster creating these core modules (anomaly detection
data, prepare models, experiment with data and and forecasting) as an enterprise-wide ML/AI service.
interpret results. They then try to produce these
models with a limited pool of data scientists, data The figure below shows an architectural view of how
engineers and analysts. anomaly detection and forecasting can be adopted
across an entire network:

ANOMALY DETECTION & FORECASTING TO OPTIMIZE TELCO NETWORK SERVICES

Multiple Metric Sources Automated Anomaly

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Detection

Real-Time
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Sum, average, derivative, Alerts

Anomaly Detection & Forecasting Percentiles, log, stats, ...

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RAN KPIs Core KPIs Service KPIs CEM/CE KPIs

“Big Data” Collection Platform Operations,

· Includes NMS/OSS, Customer Experience Mgmt. (CEM) Orchestration,
· Billing Mediation & Rating, CRM, etc. Planning & Design

UE measurement RAN Performance Optimization Transport CDRs CDRs

Reports Counters Policies Perfomance Voice/Data/Video
Counters Service metrics

CSON Perfomance
Counters

Optimization
UE2 Enforcement • MME
• Cell Site Router IMS
• HSS
Cell 2 • Access Aggregator Messaging
• DRA
Cell 1 • Core Aggregator CDN
• SGW/PGW
Cell 3 • Security Gateway IPP
UE1 • PCRF

Radio Access Network Transport Core Network Services

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10  Extending the Competitive Advantage in Telecom — Chapter 1.

A similar functional diagram is shown below, illustrating
how anomaly detection and forecasting can support
telecom-related business functions such as billing,
wholesale, retail, fraud, revenue assurance, etc.

ANOMALY DETECTION & FORECASTING TO OPTIMIZE TELCO BUSINESS SERVICES

Multiple Metric Sources Automated Anomaly

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Detection

Real-Time
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Sum, average, derivative, Alerts

Anomaly Detection & Forecasting Percentiles, log, stats, ...

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Mediation KPIs IT KPIs Provisioning KPIs Customer Care KPIs

Operations,
Network Operator “Big Data” Collection Platform (On-Prem/Cloud) Orchestration,
Planning & Design

BSS
Sales Funnel Customer Care
Sales Catalogue Retail
Management Applications

Fraud Order Roaming &

Campaigns IT Infrastructure
Management Management Regulatory

Billing &
Pre-Paid OCS Post-Paid Mediation
Wholesale

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11  Extending the Competitive Advantage in Telecom — Chapter 1.

In the coming chapters, we’ll dive deeper into
anomaly detection and forecasting applications in
these key areas:

1. Network Operations

2. Customer Experience
3. Network Engineering and Planning For more information,
please contact Anodot:
4. Revenue Assurance and Fraud
North America
5. IT AIOps 669-600-3120
info.us@anodot.com
6. Data Ops, MLOps and DevOps
International
7. 5G Networks +972-9-7718707
info@anodot.com

A pioneer in AI analytics, Anodot is the go-to

anomaly detection and forecasting solution
for Waze, Microsoft, Wix and other leading fintech,
eCommerce, telco, gaming, adtech and
online businesses.

With Anodot Autonomous Detection, patented

machine learning algorithms filter critical alerts
and correlate them to other anomalies and events,
cutting remediation time by as much as 80 percent.
Anodot Autonomous Forecast helps businesses
continuously and accurately forecast growth and
demand – no data science experience needed.

Anodot’s real-time monitoring and turn-key

platform is helping companies quickly anticipate
changing conditions and avoid unnecessary costs.

Learn more at www.anodot.com

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© Copyright 2019, Anodot. All trademarks, service marks

and trade names referenced in this material are the
property of their respective owners.
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