Ineffective Digital Growth Considered Key Risk for Telecommunications

EY Luxembourg has named ineffective digital growth as the top risk for telecommunications operators as the introduction of 5G draws nearer.

 

In addition to digital growth, data protection security concerns and talent gap are considered key risks for telecommunications. Indeed, EY named these among the "Top 10 risks for telecommunications operators". Underestimating changing imperatives around privacy, security and trust was listed second in the risk ranking. With data protection scandals continuing to unfold across the globe, regulators have responded with a range of compliance requirements.

 

As the Internet of Things and the promise of 5G increases data flows, the risk landscape too is intensifying. The latest EY Global Capital Confidence Barometer has illustrated this, with 47% of telecoms executives citing regulatory and government issues as the biggest threat to future deal-making over the next twelve months.

 

Gaël Denis, EY Luxembourg Telecommunications Leader, commented: “Gigabit infrastructure is set to unlock the power of intelligent connectivity and pressure is mounting for telco operators to claim first mover advantage. As 5G and the Internet of Things spur an increase in connectivity end-points, security concerns will become even more pronounced. In this climate, trust is now a key differentiator for telcos, and they should position security at the heart of customer interactions while keeping current with the evolving regulatory landscape.”

 

Ranked fourth on the risk list was the failure to prioritise workforce planning. While telco operators have recognised a lack of digital skills in their organisations, only 3% saw growing and retaining talent as a top strategic priority according to an EY survey of telco industry leaders. The inability to combat the growing capital expenditure burden ranked fifth, as telcos contend with a new wave of network investment ― including 5G, low-power wide area networks and gigabit fiber. 

 

In addition, as demand for intelligent connectivity continues to escalate, failure to navigate evolving disruption scenarios (6th in the ranking) and to collaborate with strategic partners as a route to innovation (10th), were also highlighted as mission critical risks. Other risks shortlisted in the ranking included inadequate portfolio management (7th) and insufficient engagement with industry verticals and the public sector (9th).