5 key risks facing telecom providers

Dec. 27, 2019
Infiniti Research's latest telecom industry risk assessment report highlights some of the biggest industry challenges and how telcos can dodge them.

Market intelligence firm Infiniti Research has announced the completion of its latest article on an overview of some of the biggest challenges in the telecom industry. In the article, experts from the firm discuss some of the key telecom industry risks and provide insights on how operators can overcome these challenges.

Per the researcher's executive summary of the study, "Despite the ongoing convergence with other industries and a slight revenue uplift through innovative technological transformations, the telecom sector is still stalled in a low-growth mode. To overcome roadblocks to growth, telecom companies should aim to lay increased focus on efficiency, agility, and customer-centricity in their services. However, this may not be enough to sustain growth in the long run. Infiniti’s telecom industry risk assessment experts suggest that there are several key risk factors that telecom providers must consider overcoming these challenges in the telecom sector."

The five key risk factors that telecom providers must consider, per Infiniti Research, are summarized as follows:

1.) Ineffective digital transformation and growth strategy

"One of the biggest challenges faced by telecom operators is to generate growth from digital services. Developing innovative business models, seizing opportunities for inorganic growth, new service inclusions, and diversification through M&A and strategic alliances can prove useful to capitalize on growth opportunities."

2.) Rising Capex burden

"Global telecom operators are undergoing a new wave of network investment which ranges from 5G and low-power wide-area networks to gigabit fiber. However, the returns on this Capex is often uncertain because advanced technologies such as 5G are still in the early development stages and broadband as a utility tends to pose major threats to the premium pricing of fiber connectivity. As such, making the right choices for infrastructure switch-off, spin-off, and sharing is increasingly important."

3.) Changing regulatory framework

"There is an increasing regulatory focus being given to aspects such as data protection. As a result, traditional burden on operators including wholesale pricing and interconnection are becoming more relaxed. On the flip side, other areas of regulations are in flux for telecom providers. Furthermore, the government’s industrial policies are also creating new demands for companies in the telecom industry. Infiniti's telecom industry risk assessment experts are of the opinion that it is critical for operators to balance and navigate the changing policy landscape."

4.) Inadequate workforce planning and design

"Effective talent management is still not given a strategic priority in the telecom industry. Infiniti’s telecom industry risk assessment experts state that this could prove menacing for telecom industry players. Reshaping and reskilling the workforce capacity is important for telcos. To avoid such organizational silos, companies in the telecom industry must undertake a holistic approach to workforce design."

5.) Lack of efficiency in portfolio management

"Infiniti’s telecom industry risk assessment suggests that inadequate planning and management is one of the primary reasons why telecom operators fail in achieving the synergies that they target to achieve from M&A agreements. This calls for telecom providers to establish more flexible integration road maps and smarter management of their business portfolios."

"Currently, the telecom sector is at the center of digital transformation," concludes Infiniti Research. "One of the key questions that telecom companies now need to address is whether they are embracing the right opportunities coming their way and focusing on the right risks that need to be overcome."

Learn more about the research.

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