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Unlocking Broadband Service Value with AI

Unlocking Broadband Service Value with AI

Overhyped claims on the utility of Artificial intelligence (AI) have flooded the world, but understanding and using the appropriate AI technology can help service providers drive real-world profitability through actionable insights. “OpenAI is not the same thing as artificial intelligence,” said Ned Brody, CEO of Actifai, on this week’s Fiber for Breakfast. “It is a type of artificial intelligence, but like many technologies that have risen very quickly, there are varieties and shapes and forms and applications.”

Natural language processing (NLP), the first large scale practical application, has been used in call centers for decades to convert speech to text. Generative AI that creates new images and text, such as OpenAI’s ChatGPT, has broad applicability for many applications, but can veer into “hallucinations” where it makes things up.

“The most useful tool is actually Predictive or Prescriptive [AI],” said Brody. “Prescriptive AI is predicting outcomes from inputs and recommending actions. It’s great when a decision occurs frequently, that decision is an essential part of the business, and that decision has real economic impact.”

Prescriptive AI taps into in-house information as well as open-source data available via purchase or subscription, processing it to train a model and predict outcomes based on past transactions. Brody said the data used to train a model doesn’t necessarily have to be perfect, but the beginning goal of employing AI should be focused on the business.

“It’s not about applying artificial intelligence technology,” said Brody. “It’s about identifying business problems and then applying [AI]. Oftentimes, people talk about technologies looking for a problem. Start with the business. The best thing to do is to look at your P&L (profit & loss statements). Ask what the biggest costs are, revenue drivers in that organization. For most broadband providers, the biggest piece, the biggest level is in revenue, typically in marketing and sales. Secondly, looking at operational costs, customer care field operations.”

Brody stated that much of a broadband customer’s lifetime value is determined at the beginning of the subscriber relationship. “The initial decision of what you offer and what you say to a consumer really drives a lot of your economics from day one. If you think of that as a repeated decision made tens of times a day for small companies, thousands of times a day for a large company. That is a place you might want AI optimization of those engagements that can really drive more effect value sales,” he said.

Using AI in combination with household, demographic, competitive, and broadband usage data can enable companies to pitch the right service package to an individual subscriber the first time, both increasing average revenue per user (ARPU) and decreasing churn over time. To learn more about how AI can increase ARPU and customer success, listen to the latest Fiber For Breakfast podcast.