risks in telecom

8/6/2019 Risks in Telecom

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Risks in

telecommunications

Presented By:

Navneet Rai



Types of Risk

� Strategic threats related to customers,

competitors and investors

�

Compliance threats originating in politics,law, regulation or corporate governance

� Operational threats affecting the

processes, systems, people and overall value

� Financial threats stemming from volatility

in markets and the real economy



Losing ownership of the client

� Losing ownership of the client was ranked as

the number one risk in 2009 and retains its

top ranking in 2010

� Telecoms operators now share their customers

with other players in both the consumer and

enterprise markets.



Enterprise customers views on telecoms services



� The key to re-establishing ownership is

changing the customers mind-set about thevalue of the network through clear

communication and rates.

� These include selling smartphone applications

to their customers in return for a proportionof the revenues, and forming content

partnerships with online application providers.

� The operators that succeed in winning back

ownership of the customer will be those thatprovide the right combination of

differentiated customer experience and value



Rising regulatory pressures

� Mobile operators are seeing roaming andtermination rate reductions as well as the

prospect of network neutrality.

� Fixed operators are facing fiber regulation

� TV services are facing challenges around

content exclusivity.

� Telecommunications is universally seen as afocus of government taxation as well as

government investment



� Regulatory risk will remain near the top of

industry risk registers. To manage it more

effectively, we believe that operators need to

develop a clearer understanding of the

increasing interrelationship between fixed and

mobile policies



Ineffective infrastructure investment

� With telecoms operators facing the need formassive investment in higher-capacityinfrastructure.

� The challenge of investing effectively in networksremains a significant risk area.

�It remains essential to have the rightinfrastructure in place to retain customers andgrow revenues and margins as new technologiesbecome available.



� But the dramatic shortening of the technology

evolution cycle means it is getting harder toidentify which technology to implement at

which point in time.

� Against this uncertain and fast-changing

background, operators must make long-term

business-critical judgment calls.

� The timing of technology decisions is also

challenging, and leapfrogging technologyplatforms brings both risks and opportunities



To mitigate the risks around infrastructure

investment, operators need to take into accountthe wide array of issues highlighted above when

making technology choices



Inability to contain and reduce costs

� With revenues from legacy services such as voice

remaining static or even falling.

� The revenue-generating potential of new services

still uncertain, operators have no alternative but

to cut costs if they are to generate the returns

that shareholders demand.

� Network sharing has yielded some successes, butregulatory and technological hurdles remain



To seize control of their cost base in a robust and

sustainable way, operators need to increase

their efficiency and scalability by rationalizing

operations and infrastructure to support and

monetize high volumes of traffic. They shouldalso simplify their service creation processes to

focus more on customer need and make the

most of new network architectures



Lack of talent and innovation

� Telcos must tap a new wave of talent if they

are to delight a new generation of consumers

� To grow revenues from the explosion in data

traffic and reclaim ownership of the customer,

operators have to ensure that their

organizations can drive innovation

� Technologies are changing day by day, so there

are very less number of proffessionals.



Inability to manage investor

expectations

� Operators have survived and emerged fromthe crisis as a safe haven for investors but

this status is not enough to sustain investors

confidence.

� Telcos can no longer rely on the sectors

defensive nature, and now need to changetheir story from short-term cash generation tolonger-term growth and innovation.



To fight back and manage investors

expectations more successfully, telcos need to

identify, seize and communicate the right value-

creating role and positioning in a new value

chain.



Inappropriate systems and processes

� Different parts of the business have different

needs in terms of systems and processes.

�

Effective management of the legacy businesshas become even more important in the wake

of the crisis.

� New platforms and policies to support both

legacy services and new offerings or models

are key.



OSS challenges faced by telecom industries



Poorly managed M&A and

partnerships

� Current industry dynamics are favoring variousforms of inorganic expansion, ranging from

revenue-sharing partnerships to full in-country

consolidation.� Operators need to develop new competencies

and discriminate clearly between situationsrequiring partnership or M&A.

� To sustain in competitive market the serviceprovider need manage M&A



Privacy, security and piracy

� The development of the digital society has

outpaced the ability to supervise.

�

new business models are bringing new threatsto the telecoms industry.

� Location-sensitive data supports ad-based

revenue models, but can affect customer

privacy.



To what degree do you trust the following institutions

concerning data protection and privacy?

risks in telecom

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