Is customer service suffering at the hands of cost-saving AI?

Earlier in 2019, both South Korea and the US saw the launch of 5G services as the race to deploy these new networks takes hold around the world. The UK is not too far behind with this year’s Glastonbury Festival expected to be home to an innovative 5G trial as well as other tests being carried out in Birmingham New Street Station.

Right now, the 5G race is in full flow, which is why telcos globally are doing all they can not to fall behind the pack. However the financial burden created by the roll-out of 5G is forcing telcos to trim costs by deploying AI in customer service operations.  There are negative effects argues Mark Jackson, director and industry principal, telecoms & media, at CRM firm Pegasystems…


In terms of rolling out 5G, there are many hurdles to overcome – particularly financial ones. It’s no secret that installing 5G networks is a costly task and telcos are trimming their spending left, right and centre in order to raise the required funding. More fortunate telcos have the luxury of being able to sell off some of their assets. For example, Telefonica recently sought to sell off some of its operations in order to generate the funds required. However, there are other companies who have to source capital from elsewhere, and the workforce is taking the hit.

Over the last twelve months, we’ve seen the likes of Deutsche Telekom, BT, Telecom Italia, and Telstra all announce that they are culling their workforces. It would be unsurprising if part of the reason for their actions was not to raise the needed cash to pay for the work on developing their 5G networks. As a way of coping with these reduced staff numbers whilst simultaneously maintaining an adequate level of customer service, telcos are turning to AI and chatbots as a possible solution.

In parallel, alongside their plans for rolling out 5G, telcos are forging ahead with their digital transformation strategies. As part of these transformations, telcos have been focussing a lot of their investment on the latest communications channels including voice assistants and chatbots.

Customer service conundrum

While this strategy initially seems like a sensible option, there is a common misconception that these new channels will automatically provide a better customer service and help alleviate the issue of having fewer customer service staff on hand. As a result, telcos may have taken their eye off the ball. While they have been trying their best to offer interactions over all the latest channels to their customers, there is sometimes a lack of consideration as to whether these channels are even appropriate.

What’s more, they haven’t always been implemented particularly well. Basic tasks – simple bill-enquiries for example – are easy enough for these technologies to deal with. But when customer queries get slightly more complex, there is a real danger of ruining the customer journey. Telcos need to rethink how they are handling digitisation before their customers go elsewhere.

Telcos need to rethink how they are handling digitisation before their customers go elsewhere.

The reason why many of these telcos have acted like a bull in a china shop when it comes to digital transformation could be because they are worried about being late to the ‘cool new technology’ party. A more suitable approach would be to take a long-term perspective, taking care to align their Strategy and Digital Transformation Plans to make sure they don’t haphazardly invest in the latest trending technology or channel just for the sake of it.

There is evidence of this already happening with a number of operators merging their mobile apps – or abandoning them altogether. These endeavours will likely have utilised considerable time and money to get them off the ground – time and money which may have disappeared down a black hole for some companies.

AI can cost as well as save

In a bid to be the first to deploy a new communication channel two negative effects have emerged:

Problem one is that customers are now overwhelmed by choice – they are presented with a myriad of ways to contact their telco provider, but most of the time they don’t know which option is most suitable for their requirements, or would provide the fastest route to answer to the question. Compounding this problem is the fact that new communication channels are constantly being introduced which means the situation will only worsen.

Take the example of a customer trying to contact their provider via a chatbot, but after answering a series of questions it turns out that they actually need to ring up the company’s call centre to solve their issue. This happens all the time, but more often than not the customer then faces the annoying task of having to identify the correct channel to resolve their query.

Not only is this just plain irritating, but the repeated process means customers are obligated to re-enter their credentials once more, which they see as a complete waste of time. There is the added danger that the customer might give up altogether and try and switch to a competitor. And the new ‘Auto-Switch’ regulations which will shortly come into effect in the UK will mean a Telco won’t event know when a customer has decided to leave them!

The root cause of this problem is down to the tendency for telcos to focus on fixing point solutions instead of taking a more holistic stance on customer service. When GDPR was introduced, telcos were presented with an explicit checklist of requirements that had to be met, which resulted in a very siloed approach. As a consequence, often the end-to-end customer journey has suffered.

The root cause of this problem is down to the tendency for telcos to focus on fixing point solutions instead of taking a more holistic stance on customer service.

The second issue is that the incorrect use of self-service technologies such as chatbots can actually force the average call handling time to increase. The reason being that chatbots and AI can only currently handle relatively simple queries, so all the difficult cases will still need to be dealt with by the call centre team.

The knock-on effect is that employees are finding it much harder to reach their call quotas than in the past. What with the aforementioned reduction in staff numbers, employees are struggling to deal with the rising number and complexity of cases they have to deal with. Understandably, there is a danger of growing frustration in their ranks and lower job satisfaction which effect the customer experience they provide.

The introduction of AI and similar technologies has definitely helped drive down the cost of customer management, but all too often the benefits to the customer experience are negligible.

So, what’s the solution?

By installing flexible customer facing technology which links their current back-end systems telcos can unify siloed channels, helping direct their customer along the most suitable and efficient journey for their query, whist still supporting their preferred channel. Customer service agents will also benefit from this technology as they will be guided with AI through the management process in a seamless way, helping to save valuable time and effort.

With customers and employees feeling the benefits it’s a win-win situation, and also means that telcos can create a leading customer experience at an affordable price – with money left to invest in their super-fast 5G network!


Mark Jackson, director and industry principal, telecoms & media, Pegasystems

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