Failure to maintain network resilience tops telco risk radar, says EY

42 per cent of United Kingdom consumers said telcos should focus resources on maintaining broadband quality. — Reuters file pic
42 per cent of United Kingdom consumers said telcos should focus resources on maintaining broadband quality. — Reuters file pic

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KUALA LUMPUR, Sept 17 — Pressure to maintain infrastructure resilience and expand reach has emerged as the most pressing challenges for telecommunications companies (telcos), although they have largely risen to the challenge of a surge in network demand during the Covid-19 pandemic, said EY.

In its ‘Top 10 Risks in Telecommunications 2020’, it said with the initial pandemic lockdowns across the globe triggering traffic spikes of up to 70 per cent, telcos have successfully assumed an elevated societal role as connectivity providers.

“But with 42 per cent of United Kingdom consumers stating that telcos should focus resources on maintaining broadband quality and 32 per cent of United States consumers citing concerns about home Internet reliability, speed and connection since the pandemic began, telcos need to do more to sustain positive customer perception about the service they receive.

“Overall, networks have withstood a sharp increase in home working, entertainment and schooling during the pandemic and telcos have commanded favourable customer opinion as a result,” said EY global telecommunications leader Tom Loozen in a statement today.

“However, revenues are set to decline across most product categories and telcos must not become complacent.

“The journey to recovery will require new thinking and competencies, shifting the customer promise from speed to reliability, so telcos can thrive in the new normal,” he added.

The report, which combines EY industry insights and consumer survey data, revealed that the inability to scale digitisation initiatives ranked second on the risk radar, failure to redesign workforce purpose and inclusion (third); failure to improve capital expenditure efficiency and network returns (fourth) and fifth, risks associated with changing imperatives in privacy, security and trust.

The other challenges on the risk radar are poor management of investor and stakeholder expectations; ineffective engagement with industry verticals and the public sector, often due to low awareness of the benefits of 5G; inability to adapt to a changing regulatory landscape; failure to mitigate escalating geopolitical and competitive disruption; and failure to take advantage of changing market structures.

Meanwhile, Ernst & Young Advisory Services Sdn Bhd partner, consulting, Susanna Lim, said the key risks outlined in this new report echoed consistently across the telco sector in Malaysia and the region.

She said the Covid-19 pandemic has cast a spotlight on issues such as digital infrastructure, network returns, digital divide, consumer protection, data privacy and security, sustainable talent pipeline, and new areas of stakeholder scrutiny, including regulation, among others.

“It is therefore critical, particularly given the increasing competition around emerging technologies such as 5G and artificial intelligence that communications providers continue to assess the evolving dynamics and understand the interplay between them as they look to respond and thrive beyond,” she added. — Bernama

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