Friday 29 Mar 2024
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KUALA LUMPUR (July 19): Telecommunications companies around the world are most concerned about the impact that currency fluctuations will have on their business, according to the findings of a survey by BDO.

"The risk is significant given the dependency of telcos on cash flow, international customer bases and large mergers and acquisitions," BDO said in a statement on its 2018 telecommunications risk report today.

Industry players are also worried about increased pressure from competitors, which displaced technological disruption as the second largest concern among the 60 major telcos worldwide which BDO surveys on a yearly basis.

"Profitability concerns were reported three times more often than in 2017," BDO said, adding that the perceived risk from market saturation is up by 80%.

"After telecommunications giants have dug deep into their pockets to innovate and ward off technology debt, they want to see return and profitability," it said.

Uncertainty on the external front, which include Brexit, Trump, North Korea, regulatory changes and a looming trade war, also underlie telcos' other major concerns: access to finance and interest rate pressures, BDO pointed out.

Despite the new prioritisation of risks, BDO noted that the strength of these risk indicators have declined across the board after reaching a four-year high in 2017. These were mostly associated with financial and regulatory risks, especially in Asia, where telco executives were less concerned by changes to regulations and perceived risk from cyber threats.

"The telco industry as a whole is taking an increasingly proactive approach to the risks they face," BDO said, adding that these companies were busy diversifying their business portfolios.

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