AI reshapes threat landscape for telcos, says EY report

The landscape of threats to telecommunications companies (telcos) is being reshaped by the emergence of generative artificial intelligence (GenAI), as highlighted in the annual EY report, Top 10 risks in telecommunications. Cyber-resilience is under significant pressure, with conventional data governance strategies being questioned as GenAI evolves.

The top-ranked risk in the report is the underestimation of changing imperatives in privacy, security and trust. The report indicates that 68% of telco respondents feel they are not managing the unintended consequences of artificial intelligence sufficiently. Additionally, 74% believe that more actions are needed to mitigate the threats posed by potential malicious actors using AI for cyberattacks and other malicious activities. Further, 53% predict that the cost of cyber breaches to their organisations will exceed US$3m in 2023, a considerable increase from 40% in 2022.

Future uncertainties are elevated due to divergent AI policies emerging across countries. As Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications Sector Market Segment Leader, explains, "The existing framework and governance of data privacy, cybersecurity and trust is expected to be heavily impacted by AI. Different emerging policies, dependent on different country legislations also add complexity."

Insufficient talent and skills management has debuting at third position among top risks. This concern is driven by the increased demand for digital talent in light of new technology cycles and the looming shortage of network engineers. Financial pressures are exacerbating this talent crisis, with hiring freezes and cuts to salaries and benefits affecting more than half of the surveyed telco employers. Wang suggests, "As telcos increasingly embrace emerging technologies for the future, the significance of acquiring digital talent and making investments in upskilling and reskilling becomes even more pronounced."

In terms of customer relations, the report highlights that, despite dropping a place to second position, the response of telcos to customers amid the ongoing cost-of-living crisis remains a critical risk. Even though only 16% of consumers are actively reducing their spend on fixed and mobile connectivity, many are seeking better deals and advice, resulting in 60% of consumers being more likely to compare deals due to the impact of the cost-of-living crisis.

These findings underscore the pressing need for telcos to adopt proactive measures to secure and future-proof their operations. As the rise of AI intensifies complexities and challenges in data governance, security, privacy, and talent management, strategic navigation of these risks will be key for telcos in forging a secure, forward-looking digital future.