Price profitably or perish: B2C telcos investing in advanced pricing capabilities see 2–7x ROI in 12 months. Those that aren’t are falling behind

In the commoditised and tightly regulated UK consumer telecoms market, operators face ongoing margin pressure. Price sensitivity is high, and raising prices on core products is increasingly difficult. Traditional tactics like in-contract price increases are now under Ofcom’s scrutiny, while market consolidation alone isn’t enough to unlock margin. Instead, advanced commercial and pricing levers which are anchored in data and enabled by technology are proving vital. Telcos investing in these capabilities have seen 2x to 7x ROI, demonstrating the value of precision-driven pricing and commercial execution. 

Baringa’s market-wide study, covering over 120 telcos across the UK, continental Europe, and North America, reveals how operators are responding to these pressures and where pricing delivers impact.  

AI isn’t optional anymore - it’s essential 

AI is now essential, not optional. Over 60% of operators have already embedded AI, particularly machine learning models, into their pricing strategies, and high performers are extending its use across the entire commercial lifecycle. Beyond pricing, AI is driving growth by improving lead generation, strengthening customer retention, reducing churn, and boosting lifetime value. It also helps identify untapped demand through upsell and cross-sell opportunities, unlocking new revenue streams. 

At the same time, AI is transforming customer engagement. Leading telcos are replicating, and often surpassing, in-store experiences through hyper-personalisation. Advanced customer segmentation leading to pricing catered for micro-segments of customer groups, and optimised channel strategies enable operators to target the right customers with the right offers at the right time. This is supported by smart guardrails, ensures rapid responses to market shifts, captures more market value, and protects both margins and customer trust.  

Why you should price smart: UK telcos need commercial maturity to stay in the game 

• Hyper-personalisation at scale: With digital channels leading the charge, telcos are using AI to match - and often beat - the in-store experience. One US telco VP told us AI helped tailor products for everyone from gamers to pensioners, boosting loyalty and cutting churn.  
• Predictive strategy, not guesswork: AI also drives strategic decisions through predictive modelling, helping telcos identify expansion opportunities and forecast customer demand. This replaces guesswork with data-driven growth.  
• Precision pricing: Pricing is evolving from segment-level to micro-segment strategies. By integrating behavioural data and demand signals, telcos fine-tune deals that hit the mark - and the margin.

Companies using AI-driven pricing strategies are more likely to achieve higher levels of profitable growth (11%+ YoY) in consumer segments [Click to enlarge]

How do you gain margin? Strategy is great - but only if you can execute 

Telcos must balance customer acquisition with maximising relationship value. This requires a commercial strategy rooted in holistic pricing, margin discipline, aligned incentives, and smarter channel management. However, having a commercial strategy is not enough, execution is where margin is won or lost. Leading telcos equip sales acquisition and retention teams with the tools, training, and governance to apply pricing strategies consistently. This shifts pricing from a back-office function to a frontline commercial lever, helping operators protect and grow margins at the point of acquisition.  

What happens if you chase volume and overlook value 

Many telcos chase volume at the expense of value, with sales teams prioritising deals over revenue per user (RPU). Aggressive discounting can boost short-term figures but erodes margins and brand value, leading to a race to the bottom. Sustainable growth requires sales leadership to set clear goals aligned with commercial objectives, embedding profitability into sales execution and rewarding value, not just volume. 

Businesses with a balanced discount spread see higher rates of profitability improvement. Aligning incentives to profitability makes discounting an effective tool for growth. [Click to enlarge]

What are winning telcos doing differently? 

Our research and client experience shows that operators who embrace advanced commercial and pricing strategies leveraging and embedding AI and data-driven insights outperform the competition and deliver long-term sustainable growth. 

Success hinges on three pillars: 

1. Recognising AI as a strategic differentiator to drive customer segmentation, personalisation, and rapid response to market changes 
2. Strengthening sales leadership with clear goals and incentives aligned to commercial objectives 
3. Investing in smarter channel strategies that encourage collaboration and holistic pricing 

If you’d like to learn about how Baringa has helped leading telcos to achieve measured commercial performance uplift and where we can help your business, please contact any of our panel of experts below.