Mobile carriers focus on AI call centers to expand business

[Graphics by Song Ji-yoon]

South Korean mobile carrier LG Uplus Corp. saw 1,000 new subscribers in 2024 to date after launching its artificial intelligence (AI) Contact Center (AICC), U+AICC, a year before.

The success comes as the trend of integrating AI technology into traditional call centers, where calls were previously handled by humans, is gaining attention. It targets client companies burdened by the cost of call center operations, prompting them to transition to AICCs.

According to multiple sources from the information technology (IT) industry on Sunday, the country’s three major telecom companies are competing to dominate the AICC market as the AICC market size grows by more than 20 percent annually. AICC is one of the fastest-growing AI businesses that the three major telecos are pursuing due to its high profitability.

Companies across various fields, including finance, insurance, public institutions, healthcare, and travel, are currently partnering with the three major telecom companies to build AICCs.

As the competition intensifies, telecom companies are rapidly introducing both on-premise and cloud-based subscription AICCs, shifting from the traditional business model of installing lines and charging installation and maintenance fees to a model that meets customer demand.

For telecom companies with extensive call center operation experience, AICCs represent a new market created by AI. The market has significant potential but no clear leader yet, and its broad applicability makes business expansion attractive.

KT Corp. has been the quickest to respond and hit a contract volume of 250 billion won ($181.2 million) in 2023. KT elevated its dedicated AICC team to a formal business unit in 2021 after launching its AICC business in 2017.

It launched the KT A’Cen Cloud, a service-based AICC product that combines cloud capabilities with AICC solutions, in January 2022, while also integrating real-time call transcription, assistant features, and voice and chatbots into a consulting app, whose core clients include banks and insurance companies.

The company has tangible results to show three years after opening the AICC business unit. The contract volume for KT’s AICC business jumped from 78.5 billion won in 2022 to 250 billion won in 2023, a more than threefold increase during a one-year period, and its revenue target for 2025 is 300 billion won.

For its part, LG Uplus is aggressively promoting U+AICC, with the number of new subscriptions topping 1,000. Its U+AICC service, launched in September 2023, is a cloud-based subscription AICC service targeting small and medium-sized enterprises.

Although it is a latecomer to the AICC market, LG Uplus has strong allies – LG CNS and LG AI Research – which are affiliates leading in AI development. The trio plans to enhance service functionality by applying the generative AI ixi-GEN to both on-premise and subscription AICCs, and the company aims to see AICC solution sales totaling 300 billion won by 2028.

SK telecom Co. entered the AICC market in 2021 and its performance in the enterprise business segment, including AICC, grew by about 10 percent in 2023 compared to the previous year. It introduced the all-in-one subscription AICC service SKT AI CCaaS in March 2024, securing SK Rent-a-Car as its first corporate client, while also participating as a strategic investor in the AICC developer Persona AI in August 2023.

According to market research firm Research and Markets, the global AICC market is expected to grow by an annual average of 25 percent to $36.1 billion in 2025 from $15.5 billion in 2020. The Korean AICC market is expected to grow by an annual average of 23.7 percent to $350.88 million in 2030 from $42.14 million in 2020, according to Allied Market Research.