5 Key Areas Where Mathematical Optimization Can Deliver Benefits for Telecom Companies in 2021
Author: Milos Pavlovic
Challenges abound for telecommunications companies as we move forward in 2021. The primary driver of these challenges is 5G, which has ushered in an era of immense change, competition, and complexity for players across the telecommunications value chain.
To remain profitable in the age of 5G, telecom firms must be able to figure out the best way to utilize their resources and upgrade their networks to handle increased broadband speed, cutting-edge Industry 4.0 technologies and automation, and changing consumer preferences.
In my role as a Director of Business Development at Gurobi, I speak with telecom industry professionals practically every day about the operational and financial challenges they are facing, and work with them to find solutions that empower them to:
- Tackle their network, resource, regulatory, operations, sales, and supply chain challenges,
- Transform their planning, decision making, and business performance, and
- Thrive in the era of 5G.
One AI software solution that has established itself as an essential technological tool for telecom companies today is mathematical optimization.
Major telecom organizations across the industry – from operators to services providers to equipment manufacturers to government regulators – are using mathematical optimization to address a wide (and ever-expanding) array of strategic, tactical, and operational problems, make optimal plans and decisions, and achieve their business objectives.
Instead of trying to describe all the use cases (as there are too many to count!), I thought it would be more useful if I highlighted the five key areas where mathematical optimization can deliver immense business benefits for telecom companies in 2021.
1) Network Planning
It is essential that telecom operators ensure that that their 5G networks are planned and deployed in such as way so as to optimize coverage and service levels for consumers as well as their own CAPEX and OPEX.
Leading global telecom players – like Vodafone – use mathematical optimization to plan, configure, and operate their networks in the most efficient and profitable manner possible.
Mathematical optimization is extremely effective in automating and optimizing numerous network planning processes including fiber optic network planning, facility location planning, coverage and frequency planning, and radio planning.
Other planning tools – such as machine learning and meta-heuristics – are simply not capable of handling the complexity of telecommunications network planning and delivering optimal solutions to today’s network planning problems.
2) Workforce Management
Workers (particularly skilled technicians) are one of the main drivers of costs for telecom companies – and so it’s imperative that these resources are assigned and deployed effectively.
Telecom companies use mathematical optimization to address various workforce planning problems including technician routing and scheduling and call center planning.
With mathematical optimization, telecom firms can minimize workforce costs and maximize employee efficiency and customer satisfaction.
3) Supply Chain Management
Another area where mathematical optimization is critical for telecom services providers today is supply chain planning and operations.
Mathematical optimization enables these organizations to continuously monitor and optimally manage their end-to-end supply chain operations – from the manufacturing of equipment such as chips, routers, and mobile phones, to the configuration their networks of retail shops, to the distribution of inventory.
Even in times of extreme supply chain volatility, disruption, and uncertainty like we’ve seen during the COVID-19 pandemic over the past year, mathematical optimization has enabled telecom businesses (and companies from many other industries as well) to:
- Quickly react and respond to changing conditions across their networks,
- make optimal strategic, tactical, and operational plans and decisions, and
- take the necessary actions to ensure on-time delivery of products and services at the lowest possible cost.
4) Sales and Operations
Although mathematical optimization is well-established as technological tool for telecom companies in the four areas discussed above, one area where the use of this AI technology is relatively new (and rapidly expanding) is sales and operations.
A growing number of major telecom firms have started utilizing mathematical optimization to handle numerous sales and operations-related initiatives such as:
- Sales and marketing campaign optimization: With mathematical optimization, telecom companies can optimally shape marketing campaigns and sales packages, and automatically determine which packages of products and services to offer to which customers, when, and at what price.
- Customer acquisition and management: Mathematical optimization enables telecom companies to leverage the power of advanced analytics to manage risk in customer acquisition.
To survive in the hyper-competitive 5G era and win the war for market share, telecom firms must be able to maximize revenue growth (by luring customers away from competitors) and minimize customer churn. With mathematical optimization, they can do exactly that.
5) Spectrum Allocation
The final key area I would like to discuss – where mathematical optimization has proved to have tremendous value – is spectrum allocation. The telecommunications regulatory agencies of many countries around the world (including the Federal Communications Commission in the US) utilize mathematical optimization to conduct their spectrum allocation auctions.
With mathematical optimization, these regulators can automatically run these highly complex auctions and determine the optimal pricing and allocation of radio spectrum across their networks so that they can:
- Maximize the revenue they generate from the sale of spectrum to telecom operators.
- Offer spectrum to telecom operators at a reasonable price, thereby ensuring the long-term sustainability of their country’s telecom market.
A Technology for Today’s Telecom Leaders
In the five key areas I highlighted in this blog (and in many other areas as well), mathematical optimization has shown itself to be a powerful, pivotal technology for organizations across the telecommunications value chain today.
The telecom industry landscape in 2021 is marked by unprecedented changes, complexity, and challenges – caused by the advent of 5G and the impact of the COVID-19 pandemic.
Mathematical optimization gives telecom companies the capability to transform these obstacles into opportunities and find pathways to profitability in these challenging times.