2017 Telecommunications Risk Factor Survey

The last twelve months have heralded dramatic and unexpected changes in the political, business and economic environment. Shocks to global economics and trade flows – from the United Kingdom voting to leave the European Union to the United States of America electing its most unconventional and nationalistic president in living memory – suggest that the tide of popular opinion may be turning away from globalisation. Cyber security and the vulnerability of consumer data held by large corporations have also dominated headlines with several high-profile cyber and malware attacks taking place over the last 12 months.

BDO’s Global Technology, Media & Telecommunications team has conducted the annual Telecommunications Risk Factor Survey and identified the five main risks that are keeping telecoms executives in the Asia Pacific region awake at night:

1. Fast arrival of new technologies
2. Access to finance
3. Currency fluctuation
4. Interest rate fluctuations
5. Liquidity and cash flow risks.

BDO’s Risk Factor Survey reveals that digital transformation is not only a challenge in mature markets: in India, for example, Tata Teleservices reports that customers are switching from voice telephony to data services in large numbers.

Of particular concern to the telecoms companies BDO engages with is the dual impact of EU data roaming regulations, and global regulatory frameworks regarding net neutrality and widening internet access.

New accounting standards such as IFRS 16 impose a financial risk to telecoms companies because they are now required to report more debt on their balance sheet.