The GenAI Telco Revolution: Why Design and User Experience Matter More Than the Technology

Generative AI (GenAI) may still be nascent, but businesses across all industries are keen to take advantage of its potential. The telecommunications (telco) sector has undergone a seismic shift in recent years, with mobile network operators (MNOs), mobile virtual network operators (MVNOs), and emerging “new-breed” MVNOs all vying for their slice of the market.

Amid fierce competition, GenAI is emerging as one of the key differentiators, transforming customer interactions, driving revenue, and unlocking new efficiencies. According to a 2024 study, more than half (54%) of telcos have already fully or partially implemented GenAI, which makes the telco sector one of the fastest-growing adopters of GenAI technology behind retail (66%) and banking (60%).

But for all its potential, success with GenAI isn’t a case of when GenAI is deployed, but how. Take a popular use-case of GenAI technology like a personalized next-best-offer (NBO) system to reduce churn. This can either boost revenue and increase customer loyalty or frustrate users with irrelevant suggestions. The difference comes down to three critical elements: design, user experience (UX), and strategy.

A well-designed AI system shouldn’t just suggest personalized upgrades or discounts — it must fit into how customers already make decisions and adapt to their decision-making behaviors. Take Coca-Cola in a market like India, for instance, where guests in an Indian home are offered either a hot or cold beverage. Coca-Cola became the de facto ‘cold drink’. This wasn’t just marketing — it is embedding a product into customer habits.

This is why strategy, design, and UX must be at the core of GenAI adoption in telecom. If the interface is cluttered, the experience feels robotic, or the AI isn’t aligned with business objectives, even the most powerful AI models will fail to deliver. To truly capitalize on GenAI, telecom operators must approach it as more than an advanced technology — they must design it for clarity, personalize it for engagement, and align it with strategic goals.

GenAI should add simplicity, not friction

The great film score composer Ennio Morricone said that music was only there to “serve the film” and “shouldn’t disturb audiences.” Critics agree that the best film scores are the ones viewers barely notice. No matter how advanced GenAI becomes, its effectiveness hinges on how seamlessly it blends with customer expectations and how easily they can act on its recommendations.

A cluttered interface, complex messaging, or an overwhelming number of choices can quickly erode the benefits of AI. A well-designed GenAI system must instead distill complex insights into clear, digestible interactions. Suppose an NBO system presents a plan upgrade with technical jargon or confusing options. The customer is unlikely to engage — not because the offer lacks value but because it creates friction in the form of a cognitive barrier.

Put simply, telcos shouldn’t be asking more of their customers but less. If customers have to think too hard, they’ll simply walk away.

Personalization alone is not enough

Any GenAI deployment is only as effective as the experience it creates. Personalization isn’t just about data-driven recommendations — it’s about making interactions feel intuitive, relevant, and even human. If the NBO system suggests an upgrade that aligns with a customer’s usage patterns, lifestyle, and preferences — at a convenient time for that customer — it builds trust and loyalty.

It means GenAI systems should be considering how, when, and why customers receive recommendations. An AI-driven system suggesting a premium data plan to a user via email who rarely consumes mobile data is not just ineffective — it actively erodes confidence in the brand.

When the UX is designed around human behavior, AI can foster deeper engagement, turning every interaction into an opportunity to learn and build loyalty. The goal isn’t just to make recommendations. It’s to understand customers and pre-empt their needs.

Tying technology to business strategy

Telcos shouldn’t be deploying GenAI to simply automate processes or make loosely personalized recommendations. That ship has already sailed. Instead, businesses should think about the specific purpose they want to achieve and deploy GenAI with that goal in mind — whether it’s reducing churn, increasing 5G adoption, or driving premium upgrades.

Without strategic direction, AI risks working against business objectives. Suppose an NBO system prioritizes discounts for customers likely to churn when the overall goal is to encourage premium plan adoption. In that case, it may hurt revenue. Customers about to churn might welcome a premium upgrade if it solves their issue. The system is actively losing the business money by automatically offering a blanket discount.

A strong AI strategy starts with defining the right success metrics and ensuring AI recommendations reinforce, rather than contradict, the company’s broader goals. Well-implemented GenAI will segment customers effectively, identify behavioral patterns, and present the right offers to the right users at the right time.

The difference between a successful deployment and a wasted investment often comes down to whether AI is being used with intention and precision. GenAI’s real power in telecom isn’t just in automation or predictive analytics. It’s in shaping customer behaviors and influencing decisions in ways that feel natural and intuitive.

When AI is thoughtfully designed, seamlessly integrated, and strategically aligned, it becomes an invisible force that enhances engagement and drives business success. The question isn’t whether telcos will adopt GenAI; it’s whether they will use it wisely enough to create experiences customers genuinely trust and value.