The failure of telcos to accept and address the way consumers are changing their spending habits has become the biggest threat in the industry, according to a new EY report.
The report, Top 10 risks in telecommunications 2023, found that 60% of consumers are worried about rising broadband subscription prices, and nearly half (45%) believe that content services overcharge for their products.
“In today’s economic climate, consumers are hyper-focused on the value they’re getting from telecom providers, and telcos ignore this shift at their peril,” said Tom Loozen, EY Global Telecommunications Leader. “The threat is compounded by increasing pressure from regulators, with some demanding that telcos do more to offer consumers ‘social tariffs’. In response, telcos must create clear, simple and secure propositions that reassure and appeal to customers.”
Consumers fear they can’t trust telcos with data
Network reliability is still a consumer pain point, but infrastructure resilience and reach – which was previously No. 1 in the ranking – has fallen to 5th as other challenges become even more pressing.
Security and trust have risen from 3rd to 2nd place on the 2023 telecommunications risk radar, with 76% of telcos reporting growth in cyber attacks compared to the previous year.
Despite increasing cyber threats, 39% of CISOs believe that boards do not consider cybersecurity issues when making strategic investment decisions. Consequently, consumers are more anxious than ever, with a staggering 46% believing that it is impossible to keep personal data secure when using the internet.
“With the adoption of 5G technology, we can expect an exponential increase in the threat landscape due to diverse use cases and the integration of emerging technology,” said Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications Leader. “We are already seeing an escalation of cybersecurity attacks across Southeast Asia and telcos are ramping up cybersecurity investments to ensure a truly robust business.”
Workforce culture another major risk
Furthermore, for the second time, EY has named workforce culture and ways of working as the 3rd major risk for telecoms companies. In technology, media & entertainment (TMT), 53% of employee respondents say they plan to leave their current role in the next 12 months—a rate that is significantly higher than it is across all sectors (43%).
The report also found that poor management of sustainability agendas is becoming an increasingly urgent threat to the industry – from 5th position last year to 4th this year –with nearly 40% of consumers saying that connectivity providers need to do more to address sustainability issues.