The growth of generative artificial intelligence (GenAI) is causing cyber resilience concerns and forcing telecommunications companies to reconsider their current data management strategies, according to the annual EY report 'Top 10 risks in telecommunications'.
The report, which outlines the leading risks facing telecoms businesses in 2024, emphasises the urgent need for businesses to manage the unintended consequences of AI more effectively.
Of the telco respondents, 68% believe they are not doing enough to mitigate the potential negative impact of AI, whilst 74% agree that they need to do more in protecting against malicious parties who could use AI to support cyber attacks.
Additionally, it is predicted that the financial burden of cyber breaches will surpass US$3m in 2023 for more than half of telecom companies, increasing from 40% in 2022.
Tom Loozen, EY Global Telecommunications Leader, commented: "The evolving telecoms risk radar is indicative of how GenAI is reshaping industries by innovating processes and transforming the way we do business. In this landscape, revisiting data governance frameworks will be critical as businesses look to address emerging risks."
The rapidly developing influence of AI has also resulted in an upward shift of regulation on the 2024 risk radar, prompting questions surrounding the nature of future AI legislation.
These uncertainties are amplified due to differing emerging policies between countries on AI guidelines and planned legislation. Specifically within the EU, concerns have arisen that AI could potentially stifle innovation and limit international competitiveness.
Another significant concern identified in the report is the increasing challenge of attracting and retaining talent in the industry. With the arrival of new technology cycles in GenAI and edge computing, the demand for digital talent is on the rise.
Despite this, budget restrictions are limiting the ability of telecoms to acquire the necessary skills and talent with 55% of telecoms employers reporting hiring freezes, a figure nearly double the sector average.
Adrian Baschnonga, EY Global Technology, Media & Entertainment and Telecommunications (TMT) Lead Analyst, noted: "Budget constraints are limiting the pursuit of critical skills and talent. Telcos must take steps to strengthen their existing workforce with a deeper focus on learning, upskilling and reskilling."
The report also highlights consumer attitudes during the cost-of-living crisis as a significant risk for telecommunications companies. Although merely 16% of consumers are actively reducing their spending on fixed and mobile connectivity, 60% admit that the cost-of-living crisis has encouraged them to seek better deals.
Loozen suggests: "Rearticulating the customer promise, along with simplifying value propositions, will help sustain and grow telcos’ relevance to their customers, thereby unlocking new routes to creating long-term value."