Changing priorities in privacy, security and trust are among the top risks facing telecoms companies in 2024, according to the latest telecoms risk radar by EY. The report suggests that cyber resilience is under pressure, with generative artificial intelligence throwing into question existing data governance strategies.

68% of respondents believe they are not doing enough to manage the unintended consequences of AI, and 74% say they need to do more to mitigate against bad actors who could use AI to support cyber attacks and other malicious activities. At the same time, 53% of telcos believe the cost to their organisation of cyber breaches will exceed US$3m in 2023, up from 40% in 2022.

The influence of AI also sees regulation climb on the 2024 risk radar – from 10th to ninth position. The report highlights that question marks surround the nature of future AI legislation, creating uncertainties for telcos. These pressures are heightened by a divergence in emerging policies between countries regarding the balance between AI guidelines and planned legislation. In the EU specifically, this has triggered concerns that AI could stifle innovation and limit international competitiveness.

Tom Loozen, EY global telecommunications leader, said: “The evolving telecoms risk radar is indicative of how GenAI is reshaping industries by innovating processes and transforming the way we do business. In this landscape, revisiting data governance frameworks will be critical as businesses look to address emerging risks. This should be accompanied by adopting new approaches to decision-making and leadership interaction that builds consensus on fast-changing issues around cyber resilience, data ethics, regulation and digital policies.”

Insufficient talent and skills management is a new entrant to the telecoms risk top 10, debuting in third position. With new technology cycles in both GenAI and edge computing on the horizon, digital talent is increasingly in demand, while a shortage of network engineers presents a more immediate challenge to the industry.

This trend is compounded by financial pressures, which are threatening the future talent pipeline. More than half (55%) of telecoms employers have introduced hiring freezes – almost double that recorded across all sectors (28%). And 61% of telcos say talent retention is being hampered by salary and benefits cuts as part of a cost-reduction drive – well above the sector average (44%).

Adrian Baschnonga, EY global technology, media and entertainment and telecommunications lead analyst, said: “Budget constraints are limiting the pursuit of critical skills and talent. Telcos must take steps to strengthen their existing workforce with a deeper focus on learning, upskilling and reskilling. Engaging with employees in new ways is vital, not only to build new software-led capabilities, but to create more successful connections with customers and stakeholders through renewed organisational purpose.”

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