The changing imperatives in privacy, security, and trust are emerging as the top risk facing telecommunications companies in 2024. According to the EY’s annual report, “Top 10 Telecommunications Risks”, cyber resilience is under pressure and emerging technologies are casting doubt on the existence of data governance strategies within organizations.
The study indicates that 68% of the surveyed telecommunications companies believe they are not doing enough to manage the unforeseen consequences of the latest technological innovations. Additionally, 74% of organizations state that they need to make a greater effort to mitigate “bad actors” who could utilize these technologies to support cyber attacks and other fraudulent activities. Furthermore, 53% of telecommunications companies believe that the cost to their organization related to cyber breaches will exceed $3 million in 2023, up from 40% in 2022.
Additionally, the inability to adapt to the regulatory landscape has risen in the risk radar of 2024, from the tenth to the ninth position. The report emphasizes that the nature of future legislation regarding these technologies creates uncertainty for telecommunications companies. These pressures are exacerbated by the diverging emerging policies among countries in terms of the balance between technological guidelines and the expected legislation.
Elena Maestre, the head of Cybersecurity at EY Spain, states: “The emergence of new risks in telecommunications is a clear symptom of how technology is transforming industries through process innovation. In this context, the revision of data governance frameworks will be crucial for organizations to address emerging risks. This must be accompanied by the adoption of new approaches around cyber resilience, data ethics, regulation, and digital policies.”
### The Drive for Attraction and Retention of Talent
Insufficient talent management and the emergence of new skills have entered the top 10 of the report’s ranking, debuting in the third position. In fact, digital talent is increasingly in demand, but the scarcity of network engineers poses a more immediate challenge for the sector.
This trend is exacerbated by constant financial pressure, which threatens the future talent pool. According to EY’s research, over half (55%) of telecommunications companies have frozen hiring, almost double that of other sectors (28%). Additionally, 61% of telecommunications companies state that talent retention is hindered by salary cuts as part of a cost reduction campaign, well above the sector’s average (44%).
Victoria Fraguas, head of the Technology, Media, Entertainment, and Telecommunications sector at EY Spain, says: “Budget constraints limit the search for critical competencies and talents. Additionally, telecommunications companies must take steps to strengthen their current workforce by focusing more on learning, skill refinement, and ‘job recycling’. Involving employees is vital, not only to build new software-based skills but to create more successful connections with customers and stakeholders.”
### Customer Service as Added Value
The insufficient response from telecommunications companies to consumers during an economic crisis remains a significant risk for 2024. The EY report asserts that only 16% of consumers are actively reducing their spending on fixed and mobile connectivity, and many are seeking better offers and advice.
Furthermore, 60% of consumers state that the cost of living crisis has made them more likely to look for the best deals. In fact, the proportion of households turning to price comparison sites for recommendations has increased from 19% last year to 30% in 2023.
For Victoria Fraguas, “consumers continue to seek added-value services, such as improved customer service and good network performance, which can be an opportunity for companies in the sector.”
### The Top 10 Risks Included in the 2024 Report
1. Underestimating constant changes in privacy, security, and trust.
2. Inadequate response to customers during the cost of living crisis.
3. Inadequate talent and skills management.
4. Poor management of the sustainability agenda.
5. Inability to leverage new business models.
6. Inadequate network quality and value proposition.
7. Failure to improve employee culture and working methods.
8. Ineffective engagement with external ecosystems.
9. Inability to adapt to constant changes in the regulatory landscape.
10. Inability to maximize the value of infrastructure assets.
To view the full report, click [here](https://revistacloud.com/wp-content/uploads/2023/12/ey-top-10-telecommunications-risk-2024.pdf).
Press release by Ernest & Young.