The annual top-10 evaluation of telco risks by the firm states that CSPs “face substantial challenges” to their position as data custodians. Given the amount of telecoms that have experienced detrimental data breaches in recent years, it makes sense.
It disclosed in July of last year that hackers had obtained the call and text logs of nearly all of its 100 million clients, including FBI agents. T-Mobile US, a rival operator, has experienced numerous security breaches in recent years.
It settled a Federal Communications Commission (FCC) inquiry into events that happened in 2021, 2022, and 2023 in October by paying a $15.75 million penalty. The passport numbers of millions of consumers were made public in 2022 due to a well-publicized hack of the Australian operator Optus. The emergence of AI now poses additional dangers.
For starters, hackers are using it to quickly change attack patterns to get around cyber defences. Additionally, while communicating with AI customer agents, customers are concerned about the usage of their data.
According to Cédric Foray, the worldwide Head in telecoms at EY: “As connectivity takes an increasingly central role in industrial digitalisation, telecommunications companies should take care to identify risks that are emerging outside their organisation, whether these relate to existing supply chains, changing customer needs or more complex policy and regulatory environments. This is particularly true of cybersecurity, where attack vectors and surfaces are evolving at speed.
“GenAI’s impact on employee and customer experiences also requires attention to mitigate downside risks, while telcos should stay alert to evolving regulatory imperatives designed to build confidence in AI,” he added.
The second issue on EY’s list of telco troubles is reskilling and attracting and keeping the proper workforce. According to an EY poll, 85% of CSP workers believe that to satisfy the business’s strategy and talent goals, HR departments will need to undergo significant or moderate change over the next five years. Additionally, the majority of telco respondents stated that although 41% of telcos permit entirely remote working, this kind of working presents difficulties when it comes to accessing office technology and engaging with coworkers. Ineffective transformation using modern technology is a new inclusion at number three.
According to EY’s analysis, creating a plan to automate procedures and switch to software-based networks is fine, but to maximise value, it needs to be executed carefully. Setting up KPIs that monitor their performance in comparison to legacy systems and processes is also crucial.
Adrian Baschnonga, the Global TMT Lead Analyst at EY, stated: “Telcos should carefully consider how best to phase emerging technology deployments, especially given the complex mix of software and hardware capabilities in scope, and the need to simplify legacy IT and networks.
“And telcos also face strategic choices specifically around AI on issues ranging from use case prioritisation to the selection of open-source or proprietary large language models (LLMs) – as well as vendor and partnership decisions,” he added.
BrandSpur telecom and information news reports that another recent addition, albeit at number eight, is value chain disruption. It is anticipated that the quantity and diversity of possible competitors will rise in tandem with the increasing prevalence of communications and connectivity.
Although MVNOs are now thought to pose the greatest threat to traditional telcos, 76% of telco respondents think hyperscalers would cause disruption in the next five years, and 29% are concerned about the possibility of satellite operators being a threat.
Continuing, the Worldwide Head of telecoms at EY said: “As operators consider how best to mitigate the leading risks, they should continue to scan the horizon for new threats while taking care to evaluate the evolving impact of existing risks on their organisations.
“Looking ahead, effective mitigation strategies will hinge on understanding the interrelationship between risks that may initially appear self-contained, and understanding how positive actions to address one challenge may help to mitigate others,” he added.
The complete list of issues that keep telecom executives up at night can be found below, and you can access EY’s report on them here (but first you’ll need to fill out a form).
1. Underestimating changing imperatives in privacy, security and trust
2. Inadequate talent, skills and culture management
3. Ineffective transformation through new technologies
4. Poor management of the sustainability agenda
5. Inability to take advantage of new business models
6. Inadequate network reliability and resilience
7. Ineffective engagement with external ecosystems
8. Failure to mitigate value chain disruption
9. Inability to adapt to the changing regulatory and policy landscape
10. Inadequate operating models to maximise value creation
