Telecom giants around the world warn of new risks

New report shows

The 2017 edition of BDO’s annual Telecommunications Risk Factor Survey reveals an almost doubled concern of telecoms giants with regulatory constraints.

The proportion of telecoms companies citing regulatory change and uncertainty as a critical risk has taken a dramatic jump, from 42 per cent to 80 per cent. This contrasts with 2016 survey results, when currency fluctuations, interest rates and liquidity mostly preoccupied telecoms executives.

BDO’s 2017 risk factor survey digs into the five main risks keeping telecom executives awake at night:

1. The digital transformation agenda
2. The regulatory burden
3. The growth of cyber warfare
4. The volatile macroeconomic and political environment
5. The infrastructure investment challenge

Christian Goetz, Head of BDO’s global telecommunications industry sector group: “The pace of change faced by the global telecoms sector has never been more intense. The average revenue per customer in the telecoms industry is falling and customer loyalty is decreasing as choice proliferates. Business customers and particularly SMEs, once a captive market, are now also moving towards OTT providers and new technologies.

“However, established telecoms companies have to shoulder the burden of the infrastructure investment, whereas content providers and new competitors in the industry reap the benefits of this infrastructure without having to make significant investments. Telecoms’ growth prospects will depend on how successfully they can navigate the complex risk landscape ahead and reshape their businesses to take full advantage of future opportunities. It is encouraging that some have already begun to employ creative ideas.

“Telecom companies successfully set-up incubators and venture capital teams for R&D, but sophisticated financial planning and strengthened cyber security are also required. Telecoms cannot afford to be complacent and must continue to evolve.”