Its analysis suggests that telcos implementing the most advanced RAI practices could capture up to $250 billion in value worldwide by 2040
A new report from McKinsey says AI gives telcos another chance to reinvent themselves by becoming AI-native organisations, embedding AI into every aspect of their businesses. However, they must focus on being responsible with their use of it to ensure their use of it is “ethical, safe, transparent, and compliant with regulations”. McKinsey calls this responsible AI or RAI.
McKinsey writes, “In the highly regulated telecom industry, RAI frameworks that govern accountability and transparency are critical to gaining consumer trust, protecting sensitive data, and safeguarding against security threats. All this makes RAI more than just an ethical exercise for telcos. It is also a business imperative.”
RAI conducted an analysis of 100 critical AI use cases that telcos could develop. For each use case, it indicated the optimal level of RAI maturity, considering inherent risks. For example, an advanced level of RAI would support a use case that manages customers’ personal information.
The analysis suggests that telcos implementing the most advanced RAI practices could deploy use cases that collectively capture up to $250 billion in value worldwide by 2040, 44% of the full industry-wide value created by AI during that period – see the graph above.
The brighter among them has figured this out all on their own. For example, Orange set up a Data and AI Ethics Council all the way back in March 2021, and adopted a Data and AI Ethical Charter with those goals in mind in November 2022. In March this year, it launched two trusted, end-to-end offers leveraging GenAI for French customers.
Last week SK Telecom, whose aim is to become a global AI leader, set out its AI Code of Conduct as it strives to put in place its AI Pyramid strategy announced in September 2023.
McKinsey also states that telcos “can lead the way in deploying both generative AI (GenAI) to improve the customer experience and cut costs and analytical AI to optimise their back-end operations and infrastructure. McKinsey research shows that GenAI could drive considerable [earnings before interest, taxes, depreciation and amortisation] gains for telcos, with returns on incremental margins increasing three to four percentage points in two years, and as much as eight to 10 percentage points in five years.”