5 Key Areas Where Mathematical Optimization Can Deliver Benefits for Telecom Companies
Author: Manuel Rassi
Challenges abound for telecommunications companies. The primary driver of these challenges is 5G, which has ushered in an era of immense change, competition, and complexity for players across the value chain.
To remain profitable in the age of 5G, telecom CSPs must find the best way to utilize their resources and upgrade their networks to handle increased broadband speed, new competitors, cutting-edge Industry 4.0 technologies, automation, the digital era, and changing consumer preferences.
As a Director of Business Development at Gurobi, I speak with telecom industry professionals practically every day about the operational and financial challenges they face, and work with them to find solutions to:
- Tackle their network, resource, regulatory, operations, sales, and supply chain challenges
- Transform their planning, decision-making, and business performance
- Thrive in the era of 5G
- Evolve with their customers
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 and service providers to equipment manufacturers and government regulators—use 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.
Here are five key areas where mathematical optimization can deliver immense business benefits for telecom companies.
1) Network Planning
It is essential that telecom operators plan and deploy their 5G networks to optimize coverage, service levels, demand, and time to market. At the same time, they must expand while securing the fastest return on investment.
Leading global telecom players like Vodafone use mathematical optimization to plan, configure, and operate their networks as efficiently and profitably as 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, radio planning, and demand planning. Since there has not been a 5G killer application until now, companies find themselves in a new era with a mix of enterprise development and end consumer demand challenges.
Other planning tools, such as machine learning and meta-heuristics, are simply not capable of handling the complexity of telecommunications network planning problems and delivering optimal solutions.
2) Workforce Management
Workers (particularly skilled technicians) are one of telecom companies’ most important human resources. It is imperative that workers are assigned and deployed to job sites 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 CSPs 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 organizations to continuously monitor and optimally manage end-to-end supply chain operations, from purchasing equipment and planning networks of retail shops, to inventory distribution, including reverse logistics processes.
Even in times of extreme supply chain volatility, disruption, and uncertainty, mathematical optimization has enabled telecom businesses to:
- Quickly respond to changing conditions across their networks. CSPs can add, modify, or adapt the new rules of business to their optimization models.
- Make optimal strategic, tactical, and operational plans and decisions. For example, CSPs can control and reduce inventory at store and warehouse levels and make better reverse logistics decisions.
- Ensure on-time delivery of products and services at the lowest possible cost, while controlling out-of-stock targets.
4) Customer Acquisition & Retention
A growing number of major telecom firms use mathematical optimization to facilitate marketing and sales initiatives such as marketing campaign optimization. With mathematical optimization, telecom companies optimally shape marketing campaigns and determine which promotions (i.e., packages of products and services) to offer to which customers, when, and at what price, getting the optimal tradeoff between effort and costs.
To survive in the hyper-competitive 5G era and win market share, CSPs must maximize revenue growth (by luring customers away from competitors) and minimize customer churn. With mathematical optimization, they can do exactly that.
5) Spectrum Allocation & Management
The final key area I would like to discuss is divided into two sections. First is spectrum allocation, where mathematical optimization has proved to have tremendous value. The telecommunications regulatory agencies of many countries around the world (including the United States Federal Communications Commission) use mathematical optimization to conduct spectrum allocation 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, thus ensuring the long-term sustainability of their country’s telecom market.
Second, mathematical optimization facilitates spectrum management. All the 5G CSPs have acquired different bands to deploy 5G services. Each of these bands can be used for different use cases, technologies, and providers. With mathematical optimization, all these variables can be taken into consideration to quickly select the right factors to deploy the 5G services, with continuous evolution at any time.
A Technology for Today’s Telecom Leaders
In the five key areas I highlighted in this blog (and many more, such as WIFI CPE optimization and backhaul IP routes), mathematical optimization has shown itself to be a powerful, pivotal technology for organizations across the telecommunications value chain. The telecom industry landscape is marked by unprecedented changes, complexity, and challenges. Mathematical optimization gives telecom companies the capability to transform these obstacles into opportunities and find pathways to profitability in these challenging times.