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Employing
AI techniques toenhance returns
on 5G network
investments

Ericsson AI & Automation

Ericsson | Employing AI techniques to enhance returns on 5G network investments

2

Contents

03

Key findings

04

AI technology adoption

06

Impact of AI adoption
within networks

08	AI opportunities forservice providers
09	Challenges for successful
adoption of AI
10

Successful implementation of AI

11

Recommendations

Methodology
This report is based on a research survey
performed during October and November
2018. Telephone interviews were conductedwith 165 senior executives from 132 mobile
communications service providers globally.
The respondents were predominantly
Chief Technology Officers (CTOs) and
Chief Operating Officers (COOs), but also
included Chief Information Officers (CIOs),
Chief Marketing Officers (CMOs) and
Chief Financial Officers (CFOs) as well assome Line of Business (LOB) managers.
To conduct the survey, Ericssoncommissioned Coleman Parkes Research,which specializes in recruiting andinterviewing senior-level responders
across multiple global markets, verticalsectors and functional areas for a wide
range of clients.

“Machine learning
is assisting ourengineers to makeour mobile networks
more proactive
and immediately
responsive to the needsof our customers.”
Head of Radio Products,
Tier-1 Operator, Europe

AI will be essential for processing the vast volume of data required to provide enhanced, personalized services to customers

Ericsson | Employing AI techniques to enhance returns on 5G network investments

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Key findings

AI is creating both benefits and challenges
for service providers at the advent of 5G.

At a time of increasing complexity formobile communications service providers,
driven by deployment of 5G and theInternet of Things (IoT), this reportexamines the crucial role of artificial
intelligence (AI) in helping to maximize
returns on network investments. It
explores the extent to which service
providers have adopted AI, and looks
at their plans for further deployment.
The importance of AI in developing andunderpinning customer relationships
is also examined. It is our belief that
AI will open up exciting opportunities
for the mobile communications sector,
as it can be utilized to create a more
personal approach for customers,
while helping to manage the costs ofdeploying and maintaining networks.

AI is being adopted in networks
AI is being embraced by service
providers around the world,
according to our research.
More than half of service providers– a total of 53 percent – expect to haveadopted AI within their networks by theend of 2020. Some are working to an evenshorter timescale, and expect to haveadopted AI by the end of this year. A further
19 percent are looking at an adoption
timescale of within 3 to 5 years.
The main areas in which service providers
are already seeing value and returnfrom AI are in building new revenue
and enjoying operational cost savings.
AI will be vital to customer service
Enhancing customer experience was
identified by 55 percent of service
providers as a key area where AI ispresently having the greatest impact
within core network activities. In addition,
68 percent highlighted enhancing
customer service as a business andoperational objective over the next
3 years. A further 72 percent agreed
strongly that AI will be importantin enabling monetization of new
network technologies and providing
a better service to customers.

AI will help recoup network investments
At the advent of 5G, service providers aremaking huge investments in their networks
to enable the new use cases that 5G offers.
AI will help operators recoup theseinvestments more quickly. Service providers
believe the highest potential return fromAI adoption will be in network planning(70 percent) whilst 64 percent intend to
maximize their returns by focusing their
AI adoption efforts on network
performance management.
AI is creating network data challenges
Embracing AI in networks is a challenge
for service providers. The main concern
identified by 71 percent was defining andimplementing standardized interfaces.
Other difficulties highlighted included data
quality (65 percent); excess of data fromtoo many sources (59 percent); problems
finding indicators of degradation orcompromised assets (59 percent); storageof data in too many systems (56 percent);
and lack of single ownership or oversightof the data (55 percent).

Ericsson | Employing AI techniques to enhance returns on 5G network investments

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AI technology adoption

Many service providers are already concluding
successful trials on using AI in their networks.
Figure 1: Progress by service providers in achieving benefits through AI

Capital expenditure reduction
Operational cost savings
Building new revenue streams
Optimizing network performance, reliability or availability
Creating personalized and adaptive customer journeys

48%
41%
35%

33%

28%

22%

27% 29%21%24%

22% 21%
19%

23%

13%

Testing AI applications
and executing trials

12%

16%
8%

Not doing but
plan to initiate trials

12% 14%
3%

7%

6%

6%

Adopting and implementing
in networks

6%

Already using successfully

Not doing and no plans

AI assesses data and quickly delivers
analytical outcomes to users. It encompasses
Machine Learning (ML), which analyzes
raw data and autonomously looks forpatterns that can yield further insights.
Already, sectors such as manufacturing,
healthcare and banking are capturing thebenefits of AI. For service providers, AI
offers opportunities that need to be built
jointly with infrastructure providers on acase-by-case basis, with a common goal
to more effectively manage complexity
and optimize network performance.
Our research has revealed service
providers around the world are presently
at various stages on their journey with AI.

Only 12 percent feel they have a detailed
knowledge of AI's application. However,
49 percent considered themselves to have afairly detailed knowledge of AI application.
More than half expect AI to be adopted
in their networks before the end of 2020(a total of 53 percent globally) and there isa general expectation (55 percent globally)that the benefits will be evident within
1 to 2 years.
The majority of service providers areat the stage of testing AI, with 48 percent
focusing on AI to reduce capital expenditure.
A further 41 percent are focusing on using AI
for optimizing network performance, and35 percent for new revenue streams.

1Ericsson Mobility Report (November 2018)

1%

1%

1%

1%

Used but stopped"There has been an
increased complexity
in the managementof a vast number ofdevices and huge
data. AI and ML
will help to reduce
this complexity."
Machine Learning Scientist,
Asia Pacific region

Ericsson | Employing AI techniques to enhance returns on 5G network investments

540%
40 percent of the world’s
population is expected tobenefit from 5G by 2024.

5G is forecast to cover more than 40 percent of the world's population by the end of 2024, according to the Ericsson Mobility Report (November 2018)

Figure 2: Focus of service providers testing AI

Capital expenditure
reduction

48%

Optimizing network
performance
New revenue
streams

The highest current use of AI among
service providers worldwide is in service
quality management (17 percent) andoperational cost savings (16 percent).
The broader context for the interest being
shown in AI by service providers is that 5G is
expected to cover more than 40 percent of theworld’s population by 2024,1 and total mobile
data traffic is predicted to have increased bya factor of 5 by this date.
Early adopters of AI among service
providers will undoubtedly gain anadvantage, as they will be well placed todeal with new challenges that result from theproliferation of additional devices following
the introduction of 5G. This is because the

41%
35%

advent of 5G will make network topologies
relatively complex, with small cells and newantennas making usage patterns moredifficult for humans alone to predict, andcurrent radio propagation models becoming
more complex to compute as a result of new
radio spectrum bands, denser topologies,
Massive MIMO and beamforming.

Ericsson | Employing AI techniques to enhance returns on 5G network investments

6

Impact of AI adoption
within networks

Service providers around the world
are already seeing the impact of AI.
Service providers around the world areobserving improved reliability for customers
as the area in which AI is currently having
the greatest impact upon core network
activities. The research conducted for thisreport has also revealed that AI is presently
facilitating improvements ranging from
simplifying network evolution to improving
performance across existing networks.

“AI and machine learning will be key to our customer
experience-centric operations management.”
Chief Technical Officer, Tier-1 Operator, India

Figure 3: Biggest impact of AI currently within core network activities (worldwide)
Improving thereliability of network
for customers

70%

Simplifying network
evolution to next “G“

64%

Analyzing service
performancefor customers

58%

Optimizing capacityof networks

58%

Enhancing thecustomer experience
Improvingperformance acrossthe existing network

The impact of AI is already visible in core network activities

55%
52%

Ericsson | Employing AI techniques to enhance returns on 5G network investments

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The impact of AI upon core network
activities varies between regions.
Figure 4: Biggest impact of AI currently within core network activities (regional)

Improving the reliabilityof networks for customers

56%

Simplifying network
evolution to next “G“

56%
91%

67%
75%

Analyzing service
performance for customers

56%

55%

45%

60%

51%

58%

62%

69%

77%

69%

70%

73%

64%

North America
EuropeLatin America
Middle East and Africa
North East Asia
South East Asia, Oceania and India

Optimizing capacityof networks

61%

Enhancing thecustomer experience

50%

73%
58%

39%

64%

55%

60%

49%

79%

71%

15%

62%
52%

Improving performanceacross the existing network

39%

46%
69%
57%

Ericsson | Employing AI techniques to enhance returns on 5G network investments

8

AI opportunities forservice providers

The improvements to efficiency that can be brought about
by AI are of particular interest to service providers.

Figure 5: Areas where service providers will be focusing upon adopting AI in their networks

64%

61%

56%

Network capacity
planning/
management

Reduced time for
network planning

Infrastructure
modeling to reduce
capital expenditure(CAPEX)

51%

50%

49%

Self-optimization

Self-configuration

Continuous improvements to efficiency
are essential to any business sector,
and the mobile communications
sector is no exception.
The arrival of 5G will be characterized by
improved speed, consistency, reliability andcapacity. Features such as advanced load
management will enable service providers
to effectively manage the network traffic,
ensuring network performance has minimal
to no impact with additional devices coming
over the networks. Service providers will beable to achieve successful managementof network performance by developing
cognitive and predictive AI algorithms.

Self-healing

53%

53%

Service quality
management

Network
performance
management

47%

44%

Virtual employee
assistants

The rapid expansion of advanced IoT
devices will need real-time latency,
and successful adoption of AI will
facilitate faster, more responsive,
available-on-demand networks.
However, the benefits of AI extend
beyond cost-management andnetwork-management efficiencies.
Enhancing user experiences is expected
to be one of the many notable benefits of
AI-managed services on the networks.
In our research, network capacity
planning/management emerged as the top
area where operators see opportunities
in terms of implementing and adopting

52%
Network trouble
ticket management

Network alarm
management
new AI use cases. This was followed by
reduction of time in network planning.
The results of our research highlight thestrong appetite among service providers forbuilding AI reasoning-based systems thatcan enable the self-healing, self-optimizing
and self-configuring networks of tomorrow.
Figure 5, above, shows the areas whereservice providers indicated how they
are focusing their AI adoption efforts.
It shows how increased reliance on smart
automation enabled by AI will be an
investment for service providers, withreturn on investment (ROI) visible insignificantly reduced operating costs.

“The business model the communication sector has to come up with will bevalue-based. For voice, they were charging per minute. For data, it was per MB.
What they always missed in their business models was customer value.”
Assistant Professor, Middle East and Africa region

Ericsson | Employing AI techniques to enhance returns on 5G network investments

9

Challenges for successful
adoption of AI

Accessing network data, and using it to solve businesschallenges, are hurdles facing many service providers.

In order to maximize the potential of AI,
there needs to be effective collection,
structuring and analysis of data to ensure
clear and actionable insights for network
development and improvement.
This is an area of concern among service
providers and infrastructure vendors acrossthe globe, with 71 percent expressing
concern about defining and implementing
standardized interfaces.
As part of our research, we asked
respondents to provide their views on
whether their company was collecting
data effectively.
It became apparent that data quality
was an issue. This was cited by 65 percent

of respondents globally, and 89 percent
in North America.
Other concerns expressed globally
included an excess of data from too manysources (59 percent); problems finding
indicators of degradation or compromised
assets (59 percent); storage of data in too
many systems (56 percent); and lack ofsingle ownership or oversight of the data
(55 percent).
At the heart of these concerns is thefact that traditional approaches to data
analytics have been based upon centralized
and generic analysis tools. These areunsuitable for addressing the increasing
complexity and vast volumes of data in

5G networks. The barriers highlighted inour research (data quality, multiplicity ofsources and systems) are indicative of thelimitations of the traditional approach todata analytics.
AI-enabled networks employ advanced
data analytics that make systems smart,
adaptive, self-aware, proactive andprescriptive. These can play a key role in
reducing associated operating costs and in
addressing many of the barriers that service
providers have indicated are preventing
insights from data being acted upon.

Figure 6: Challenges identified by service providers in sharing data to enable real AI benefits
Defining and understanding
standardized interfaces

78%

Understanding/identifying
which data to share and use

56%

55%

91%

75%

60%

83%

75%

69%

69%

61%

68%

“The opportunity for
Machine Learning, inthis case, is the ability
to identify patterns. It'sa fantastic way to learn
from experience, likewhen we are children.”
Head of Radio products,
Tier-1 Operator, Europe.

Rationalizing and validating
data and sources

72%

Ensuring regulatorycompliance (GDPR etc.)

44%

North America
Europe

55%

45%

58%

47%

Middle East and Africa

54%

46%

South East Asia, Oceania and India

46%
64%

46%
52%

Latin America
North East Asia

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Ericsson | Employing AI techniques to enhance returns on 5G network investments

Successful implementation of AI

Comprehensive experience in building and managing mobile
network products is vital to successful implementation of AI.

Service providers are keen to embed AI more
readily into their networks, according to our
research. This sentiment is shared among
77 percent globally, and is particularly
strong in South East Asia, Oceania andIndia (91 percent) and North America(83 percent).
There is broad agreement among service
providers that delivery of new services tocustomers can be accelerated by adoption of
AI technology across networks. Worldwide,
this view is held by 76 percent of service
providers, with 85 percent of respondents
in North East Asia expressing this view.
There is also widespread belief that AI
will enable service providers to scale network
operations and evolve into digital service
providers, while managing the associatedcost. This view is endorsed by 73 percent
globally and there is almost universal
support in North America at 94 percent.
In order to achieve this integration
and acceleration, AI technology needs
to be defined and implemented using
standardized interfaces. Therefore,
successful AI implementation is considered
to be dependent largely on telecom
expertise (63 percent worldwide) andeasy-to-adopt functionality that enables
staged AI functionality to be easily
implemented (70 percent), as well as
configurable AI functionality (62 percent).
AI will undoubtedly play a crucial roleas network complexity increases andservice providers face the demands ofhandling multiple technologies such as
4G, 5G and IoT, as well as growth in thenumber of devices. This is because AI will
enable service providers across the globe
to manage increasing network deployment
and network operation costs.

Figure 7: Service providers wanting to embed AI into their networks

77% Worldwide
83% North America
South East Asia,

91% Oceania and India

Therefore, early adopters of the
AI-enabled networks would seem likely
to benefit the most in terms of their ROI.
Ericsson is working in collaboration
with service providers at the heart ofnew developments, with a focus upon
using AI to reduce costs and increase
network performance. With more than
600 AI patents approved for filing,
Ericsson has played a pioneering role intransforming the engineered network
into a continuous learning network.

“We are keen to leadthe way in the region
when it comes to
artificial intelligence,as it paves the roadfor implementationof new technologies
across all our markets.“
CEO, Tier-1 Operator, Middle East

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Ericsson | Employing AI techniques to enhance returns on 5G network investments

Recommendations

AI will bring myriad opportunities to mobile communications

AI will bring significant benefits to mobile communications, notably costand network management efficiencies, and improvements to customer
experience. However, in order to make the most of the opportunities, service
providers will need to take a proactive approach which includes:– building standardized interfaces to access relevant and actionable data– exploring ways of using AI to optimize customer experience– running early trials with new customer segments to identify AI opportunities– examining use of AI and automation for network operations,
including planning and optimization– ensuring early adoption of new solutions for AI and automation
to facilitate introduction of new use cases

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to capture the full value of connectivity. The company’s
portfolio spans Networks, Digital Services, Managed
Services, and Emerging Business and is designed tohelp our customers go digital, increase efficiency andfind new revenue streams. Ericsson’s investments ininnovation have delivered the benefits of telephonyand mobile broadband to billions of people aroundthe world. The Ericsson stock is listed on Nasdaq
Stockholm and on Nasdaq New York.
www.ericsson.com

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