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Top 10 risks in telecommunications: 2010 - Ernst & Young - Global

Throughout the recent challenging period, telecommunications operators have worked hard to create and protect shareholder value. As the environment shifts towards growth — more quickly in some markets than others — these efforts are facing new challenges.

A company’s ability to capitalize on today’s opportunities will depend on its ability to understand and manage these top 10 risks.

The Ernst & Young risk radar presents a snapshot of the top 10 business risks in an industry sector, by dividing risks into four quadrants that correspond to the Ernst & Young Risk Universe™ model:

  • Strategic threats — related to customers, competitors and investors chain of a business
  • Compliance threats — originating in politics, law, regulation or corporate governance
  • Operational threats — impacting the processes, systems, people and overall value
  • Financial threats — stemming from volatility in markets and the real economy

Top 10 business risks for
telecommunications in 2010

This chart plots the top 10 risks for telecoms operators on the risk radar and lists the risks that are currently just “below the radar.”

By understanding and addressing the top 10 risks affecting the sector, telecoms providers will be better positioned to take their businesses forward and make the most of growth opportunities.

While strategic risks remain critically important, many companies have been continuing to focus on the easier-to-manage areas of operational risk.

In particular, the increasing role played by technology and device providers in shaping the customer experience and building customer loyalty means operators face a real danger of losing customer ownership. Companies that focus primarily on operational risk may fail to respond adequately to this danger.


Top 10 business risks for telecoms operators                                                                  
1. Losing ownership of the client
2. Failure to maximize customer value
3. Rising regulatory pressures
4. Ineffective infrastructure investment
5. Inability to contain and reduce costs
6. Lack of talent and innovation
7. Inability to manage investor expectations                                                                  
8. Inappropriate systems and processes
9. Poorly managed M&A and partnerships
10. Privacy, security and piracy risks
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