AI will enable higher-skilled and higher-paid jobs

Different players are at very different stages of engagement with GenAI: some are exploring simple office applications; others are using it to rewrite their code. SK Telecom has recently invested USD100 million in Anthropic, and will be keen to extract as much competitive advantage from that as possible. Customer services is the most likely first area of change, but GenAI will spread to product development, legal, financial and other areas. This may lead to fewer jobs in the TMT industry, but those that remain could be higher skilled and better paid. Analysys Mason has developed three different scenarios to capture the range of possible future paths. What is clear is that TMT players will need to address the role of AI, and exploring the options sooner rather than later will pay dividends.

Transcript

My name is Tom Rebbeck, I'm a Partner here at Analysys Mason. I'm an expert in consumer and business services. I work mostly with telecoms operators looking at strategic issues.

What are telecoms operators doing with generative AI?

If we look at what telecoms operators are doing with GenAI, mostly it's still relatively narrow, relatively limited use cases. So, for example, at the most basic, they're just using Microsoft Copilot for things like meeting summaries. We've also got examples of operators doing something slightly more advanced, so maybe generating internal manuals, FAQ-type manuals. AT&T is doing something like that. AT&T is also updating legacy code. We also see some other operators doing things that are slightly more advanced, so particularly around customer services. So we know Vodafone has a project to ingest conversations with customer service agents with a view to creating suggestions for future questions. But that's just at the pilot stage right now.

Which telecoms operator is the most advanced in the field of generative AI?

I think we need to be a little bit careful about saying which operator is most advanced. We only know what we can see from public announcements, but from what we can see, I think SK Telecom is the most advanced operator. It is an investor in Anthropic, it's invested USD100 million in that company. It's also developing multiple LLMs, both internally and with partners, including Anthropic. It has an AI-powered customer services agent called Adot, and it's a leading player in the Global Telco AI Alliance, along with Etisalat, SingTel, and Deutsche Telekom.

How will generative AI affect telecoms operators?

I think it's probably fair to say that all aspects of a telecoms operator's business will be affected by GenAI in the long term. Things like customer services, we can already see the inevitable impact. But if you look beyond telecoms and you look at other sectors, we can already see the impact of GenAI in sales, in marketing, in product development, legal and financial and so on. So I'd expect to see much the same in telecoms. The other part of that is how the relationship between those different functional areas changes. So if you take the example of product development, things that take months today could take weeks in the future, even days. Obviously, that impacts the products that come to market, but that has a knock-on impact on the sales teams, on the marketing teams, and so on.

The other aspect to think about is jobs now. Inevitably, there's been a lot of focus on the potential impact on jobs and job losses, and we've tried to quantify some of that in our research. But it may mean in 10 years’ time that the telecoms sector employs fewer people, but the jobs that remain are higher skilled, more specialised and probably better paid.

What will be the broader impacts of generative AI on the TMT industry?

So I think we're a little bit careful about talking about the broader implications. Longer term, there's clearly a lot of uncertainty with GenAI. It's moving very quickly and so on. So partly for that reason in our research, we've generated different scenarios for GenAI. We haven't narrowed it down just to one scenario. So the three scenarios, very briefly, are Navigator, where GenAI supports the existing business, it helps the existing processes become more efficient and effective and so on, but it doesn't radically change the structure of the industry. The second scenario is Pilot. This is a more radical scenario where GenAI can replace many of the existing functions, but because of regulation, telecoms operators aren't able to go beyond connectivity. And then the third scenario, Explorer, is more radical still. There are no limits on what telecoms operators can do. So they're not limited to connectivity but GenAI is very powerful and moves them into different sectors. So there's a blurring between other technology services and telecoms. So for example, connectivity could be part of an Amazon Prime bundle.

What is your one key message to the TMT industry right now?

I think there are lots of questions, lots of uncertainty, lots of hype around GenAI. If there's one thing that I think telecoms operators are doing is just to start projects working with GenAI. The quicker they get to play with these tools, the quicker they'll learn. So I think just to start grappling with it straightaway.