2024年電信行業(yè)十大風(fēng)險(英)-安永

Top10risksin

telecommunications

Evolvingsectorconsiderationsfor2024

Top10risksintelecommunications

Anindustrynavigatingacomplexandshiftingrisklandscape

Inanybusinesstoday,adeepunderstandingofriskisnolongerthepreserveoftheChiefRiskOfficer,Chief

FinancialOfficerorevenHeadofInternalAudit.Thedynamicnatureandpervasiveimpactofalltypesofriskmeansthathavingaclearfocusisimperativeforexecutivesacrossallfunctions.Putsimply,riskiseveryone’sbusiness.Andthisisespeciallytrueinthetelecommunicationsindustry,givenitsuniquepositioningatthe

nexusoftechnologicalchange,geopoliticalstrains,economicshiftsandsocietaldevelopment.

Factorsinformingthetelecomsrisklandscape

Macroeconomicheadwinds,rangingfromthecost-of-livingcrisistoongoingsupplychaindisruption,presentacontinuedthreattotelecomscompanies’financialresilienceandstability.Vulnerablecustomersarealsoa

growingareaoffocusamongregulators,whoaredoublingdownondigitalsafetyastheybegintoconsidertheethicalimplicationsofAI.

Enterprisetransformationinitiativesareexpandinginscopeandambition.Sustainabilityisnowamajor

considerationatboardlevelasdiversityandinclusiveness(D&I)initiativesandhybridworkingmodescontinue

transformingwaysofworking.Furthermore,infrastructurecarve-outsandconsolidationarereshapingtelecommunicationsmarketstructures.

Newtechnologies—fromgenerativeAI(GenAI)andquantumcomputingtostand-alone5Gandgigabitfiber—areraisingfreshquestionsaroundbusinessresilienceandserviceinnovation.Theabilitytoharnessarangeoffrontiertechnologiesisbecomingevermoreimportanttoachievingmarketdifferentiationandcompetitiveadvantage.

Throughtheirindividualandcollectiveimpacts,thesefactorsaregivingrisetoadiverserangeofrisksaffectingeveryaspectofatelco’sbusiness.Andgiventhepaceandscaleofchange,theserisksareconstantlyshifting

bothinnatureandimpact.Inthisreport,wedrawoutandanalyzethetop10risksthatwebelievearefacingtelcosgloballyin2024—andpinpointthreekeyactionsthatleaderscantaketomitigatethem.

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Top10risksintelecommunications

Mappingouttheindustry’srisks

Ouranalysisofthetelecomsriskuniversein2024isbasedontheindustry“risk

FinancialCompliance

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10

2

4

5

3

6

7

8

StrategicOperational

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radar”depictedontheright.Wedividethesector’sriskfactorsintofourdomainsandrankeachriskbasedonitscurrentimportanceandimpact.Thefourdomainsare:

?Compliancethreatsthatoriginateinpolitics,regulationsorcorporategovernance

?Operationalthreatsthatimpacttheprocesses,systems,people,andoverallvaluechainofthebusiness

?Strategicthreatsthatarerelatedtocustomers,competitorsandinvestors

?Financialthreatsthatstemfromvolatilityinmarkets,ecosystemsandinvestments

6.Inadequatenetworkqualityandvalueproposition

7.Failuretoimproveworkforcecultureandwaysofworking

8.Ineffectiveengagementwithexternalecosystems

9.Inabilitytoadapttothe

changingregulatorylandscape

Failuretomaximizevalueofinfrastructureassets

1.Underestimatingchangingimperativesinprivacy,securityandtrust

2.Insufficientresponsetocustomersduringthecost-of-livingcrisis

3.Inadequatetalentandskillsmanagement

4.Poormanagementofthesustainabilityagenda

10.

5.Failuretotakeadvantageofnewbusinessmodels

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Top10risksintelecommunications

Thetop10risksfor

telecommunications2024

Here’sadrill-downintothe10biggestriskswe’veidentifiedacrossthesector.

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Top10risksintelecommunications

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1

Underestimatingchangingimperativesinprivacy,

securityandtrust

Telcocyberresilienceisunderpressureatatime

whentheriseofgenerativeAI(GenAI)isputtingdata

governanceandethicsevenmorefirmlyinthespotlight.

Fortelecomsoperatorsworldwide,thechallengesinvolvedinmaintainingeffectivecybersecurityaremounting.AccordingtoglobalEYresearch,153%oftelcosbelieve

thatthetotalcostofcybersecuritybreachestotheirorganizationwillexceed

US$3min2023,upfrom40%in2022.Meanwhile,arangeofinternalissues

areunderminingtelcos’cybersecurityefforts,toppedbyafailureamongnon-ITworkforcetoadheretobestpractice—citedby52%oftelcosinourcybersecuritystudy,wellabovethecross-sectoraverageof38%—andaperceptionthattherearetoomanyattacksurfacestoprotect.Lookingforward,advancingtechnologycyclesheightencyberrisks.Overthecomingfiveyears,mosttelcosbelievethattheInternetofThings(IoT),cloudatscale,andartificialintelligence(AI)willposesubstantialriskstotheirorganizationfromacybersecurityperspective.

Telcos’attitudestoAI

Towhatextentdoyouagreewiththefollowingstatementsrelatedtoarti?cialintelligence(AI)?

AIisaforceforgood?drivingbusinessef?ciencyandcreatingpositiveoutcomesforall

ThebusinesscommunityneedstofocusmoreontheethicalimplicationsofAI,i.e.,privacy

WeneedtodomoretomitigateagainstAI “badactors”whocoulduseitinharmfulways?fromcyberattackstodeepfakesanddisinformation

WearenotdoingenoughtomanagetheunintendedconsequencesofAI

17%

79%

78%18%

74%22%

68%22%

4%

4%

4%

9%

AgreeNeutralDisagree

Source:EYCEOOutlookPulseSurvey,(telecomsrespondents),July2023.

Atthesametime,theriseofGenAIisaddingtotelcos’challengesarounddata

governance.Ontheupside,GenAIoffersmajoropportunitiesfortelcostoacceleratedigitaltransformationacrosstheirbusiness,especiallyinareaslikecustomer

serviceandnetworkmanagement.Thisiswhyfourinfivetelcosrespondingtoa

recentEYstudyofattitudestoAI2agreethatAIisaforceforgood.However,nearlyasmanyacceptthattherearesecurityandrelatedriskstoconsider,with74%of

TMTcompaniesbelievingtheyneedtodomoretomitigateagainstAI“badactors.”TherearealsopotentialethicalimplicationsandunintendedconsequencesfromAIthatexceedthescopeofexistingregulatoryframeworks.Theoveralleffectisthatexistingdatagovernancestrategiesmaynotbefitforpurpose.

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Households’attitudestowardtelcosduringthecost-of-livingcrisis

Percentageofhouseholds

82%

79%

74%

73%

71%

68%

59%

46%

45%

40%

34%

30%

25%

25%

Allages

18–24years

25–34years

35–44years

45–54years

55–64years

66yearsplus

%believebroadbandprovidersshoulddomoretooffer?xedpriceguarantees

%believetelcoshavebeensupportiveofcustomersduringthecostoflivingcrisis

Source:2023EYdecodingthedigitalhomestudy,September2023.

Top10risksintelecommunications

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Insufficientresponsetocustomersduring

thecost-of-livingcrisis

Householdswantclearer,morepredictablepricingandarepreparedtoshoparoundmoretogetabetterdeal,takingthepathtopurchaseoutofatelco’scontrol.

Consumersaretiredofopaquepricingmessagesthataredifficulttointerpret.ThelatestEYDecodingtheDigitalHome3studyfindsthatjustone-thirdof

consumersthinktelcoshavebeensupportiveduringthecost-of-livingcrisis,

whilethree-quartersbelievebroadbandprovidersshoulddomoretoofferfixedpriceguarantees.Thesesentimentsareespeciallypronouncedinolderage

groups,whoaremorelikelytowantfixedpricingandlesslikelytothinktelcoshavebeensupportive.Alongsideseekinggreatercertaintyaroundpricing,

householdsalsowanttelcostocommunicateitbetter:49%findexplanationsofpricechangesdifficulttounderstand,while39%findithardtolocatetermsandconditionsrelatingtopricing.

Thesegripesarecontributingtoarisingtendencyforuserstoshoparound,resultingintelcoslosingcontrolofthepathtopurchase.Whilefewerthan

oneinfiveconsumersareactivelyreducingtheirspendonfixedandmobile

connectivityatthemoment,manyarelookingforbetterdealsandadvice—with60%agreeingthecost-of-livingcrisishasmadethemmorelikelytoshoparound

forthebestdeals.Thischangingbehaviorispropellingaconcertedshiftaway

fromoperator-controlledretailoutlets,whetherphysicaloronline.Tellingly,the

proportionofhouseholdsgoingtopricecomparisonsitesorfriendsandfamilyforrecommendationshasrisensharply,from19%in2022to30%in2023.

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Top10risksintelecommunications

Againstthisbackground,it’shardlysurprisingthattalentmanagementdominatesthepeople-relatedriskscitedbytelecomsemployers—withourWorkReimaginedSurvey6showingthatretainingtalent,attractingnewtalent,anddevelopingnext-generationtalentareallrankedintheirtopfive.Withnewtechnologycyclesin

bothGenAIandedgecomputinglooming,accesstodigitaltalentwillonlybecome

3

Insufficienttalentandskillsmanagement

Externalfactors—includingrisingcosts—are

constrainingtelcos’abilitytoattractandretaintalent,withnetworkengineersinespeciallyshortsupply.

Financialpressuresarecausingmanytelcostodialdowntheireffortstobring

innewtalent,threateningtheirfuturetalentpipeline.InthelatestEYWork

ReimaginedSurvey,4overhalf—55%—oftelecomsemployerssaythey’refreezinghiringinresponsetofinancialpressures,almostdoubletheproportionacross

allsectors(28%).Effortstocontrolcostsarealsoleadingtosalaryandbenefits

reductions—citedby61%oftelcoscomparedwith44%ofallemployers—adding

tochallengesaroundtalentretention.What’smore,theselatestactionscomeon

topofseveralyearsofworkforcereductions,withtheleading20telcosworldwidereportedlyhavingcuttheirworkforcesbyacombined20%inthepastsevenyears.5

moreimportant.However,amoreimmediatechallengeisashortageofnetwork

engineers.It’sbeenestimatedthattheUSwillneedanadditional23,000additionalworkersoverthenext10yearstodeploybroadbandand5Ginfrastructurefundedbyfederalprograms.7

Topfivepeople-relatedriskscitedbytelcos

Question:Whichofthefollowingrisksatworkareyoumostconcernedabout?

38%

Maintainingfairnessandequitywithsomejobsrequiring?xedlocationorschedule

32%

Retainingtalent

29%

Addressingtaxcompliancerisksofworkingfromanywhere

29%

26%

AttractingnewtalentDevelopingnext-generationtalent

Source:EY2023WorkReimaginedSurvey.

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Top10risksintelecommunications

Whyaretelcosmakingsuchslowprogressontheirclimateinitiatives?The

answerappearstolieinacombinationoflowprioritizationofclimateactionandinternalcomplexity.EYresearchamongCEOs10findsthat46%oftelcosconsider

sustainabilitywhenallocatingcapital,butdon’tgiveitsufficientweightingto

securethenecessaryfunding.Meanwhile,otherEYresearch11showsthattelecomsexecutivesstrugglewithdecision-makingaroundclimatechangeinitiativesmore

generally:Fourin10reportdifficultywinningbuy-infrominternalstakeholders,withanevenhigherproportion(57%)sayingthatthenumberofgroupsinvolvedinternallyhampersprogress.Afundamentallackofstrategiccohesionisalso

apparent,withmorethanhalfoftelecomsexecutivesagreeingthattheirclimate

strategyconsistsofmultiplecompetinginitiatives,asopposedtoaunifiedapproach.

Telcos’attitudestowardexecutingclimatechangeinitiatives

Question:Towhatextentdoyouagreeordisagreewiththefollowingstatementsaboutexecutingclimatechangeinitiatives?

Wehavetroublegettingbuy-infromallthegroupsrequired

Somanygroupsareinvolved,it'sdif?culttomakeprogress

Wehavemultiple,competingclimatechangeinitiativesversusauni?edapproach

43%23%33%

4

Poormanagementofsustainabilityagenda

57%17%27%

53%27%20%

Telcos’climatedisclosuresarelackinginquality,whileinternalcomplexityishamperingtheprogressoftheirclimatechangeinitiatives.

TheEYGlobalClimateRiskDisclosureBarometer8showsthatthequalityof

AgreeNeutralDisagree

Source:EYSustainableValueStudy,2022(Includes30telecomsindustryrespondents).

telcos’climate-relatedfinancialdisclosureshasnotrisensignificantlyoverthe

pasttwoyearsdespitesubstantialexpansioninthedisclosures’coverage.AlmostalloperatorsreportScope1andScope2emissions,butthere’slittlereporting

ontheirsubstantialScope3emissions,whichincludesupplychain,datacenter

andcustomer-levelserviceemissions.OurBarometer9alsoshowsthat—despitebeingathighriskofgeneratingclimateimpacts—some43%oftelecomsand

technologycompaniesdonotdiscloseaspecificnet-zerostrategy,transitionplanordecarbonizationstrategy.

Top10risksintelecommunications

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Inabilitytotake

advantageofnewbusinessmodels

DespitesignificantinvestmentinB2Bservicesbeyond

connectivity,thesestillgenerateonlyasmallproportionofrevenues—withtelcosfacingacredibilitygapas

digitalexperts.

Whiletheenterprisesegmentiswidelyrecognizedasofferingtelcosstrongpotential

forgrowthprogressislacking.Industryresearch12showsthatmanyenterpriseservicesstillaccountforjustafractionofoverallrevenuesdespiteoperatorshavingbeenactiveinthismarketforadecadeormore.Indeed,it’sestimatedthatInternetofThings

(IoT),cloud,andsecurityofferingsaccountforonlyabout0.5%to2%eachintermsofgrossrevenuecontribution—andthemarginsonmanyoftheseservicesarefurther

constrainedbyarelianceonpartnershipsorindirectsaleschannels.Todate,technologyinnovationsrelevanttotheenterprisesegment—suchas5GforIoTandedgecomputing

forcloud—haveyettokickinascatalystsforgrowth.ThepictureisfurtherblurredbythefactthatoperationalandfinancialkeyperformanceindicatorsfortheB2Bsegmenttendtobeunder-reportedcomparedwithB2C,makingithardforstakeholdersto

evaluatetelcos’progressagainsttheirstrategyforcorporatecustomers.

AfurtherbarriertoB2Bsuccess—onethatcomesacrossstronglyinEYresearch13—isthattelcossufferfromacredibilitygapasdigitaladvisorstoenterprisesand

arestillperceivedprimarilyasconnectivityexpertsratherthanprovidersofvalue-addedservicesbeyondbandwidth.While53%oflargeenterprisessaytheyview

telcosasIoTexperts,just22%regardthemasdigitaltransformationexperts.Thesepreconceptionslimittelcos’abilitytoselladditionalconsultingorsoftware-related

servicesaspartoftheirvalueproposition.Also,businesscustomerssaythatmanyusecasesonofferfromtelcosfailtomeetreal-worldneeds,with47%ofenterprisesclaimingthatvendors’5G/IoTofferingsfallshortoftheirrequirementsaround

sustainability.And66%ofenterprisescharacterizetheirinteractionswithvendorsregarding5GandIoTaslargelytransactionalandtacticalratherthancollaborative—againindicatinglimitedcredibilityasadvisorsandpartnersoncorporations’

digitaljourneys.

Enterpriseperceptionsoftelcos’competenciesasICTsuppliers

Telecomsoperator

Networkequipmentvendors

Professionalservices?rms

Specialistvendors

OEMs

Specialist

consultants

Platformvendors

ITservicesDevicevendors

IoTexpertsDigitaltransformationexperts

Source:EYReimaginingIndustryFutures,February2023.

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Top10risksintelecommunications

Networkreliabilityremainsapainpointforcustomers,buttheyareunconvincedofthebenefitsofupgradingtonewinfrastructure.

6

Morethanoneinfivehouseholdsfrequentlyexperiencenetworkreliabilityissues

withtheirbroadbandservice,whetherinvolvingnetworkoutages,droppedsignalsorbufferingduringstreaming.AccordingtoEYresearch.1426%ofhouseholds

Inadequatenetworkqualityandvalue

proposition

experienceanunreliablehomebroadbandconnection“often”or“veryoften.”Andanevenbiggerproportion—29%—saythesameabouttheirmobiledatasignalinsidethehome.Whileoperatorsaretakingactivestepstoadapttheircustomerpromisestofocusonhomecoverage,thesemessagesoftenfailtoresonatewithcustomers:43%believethatWi-Fiperformanceguaranteesaremisleadingorinaccurate.

Despitefrustrationsovernetworkreliability,thereisaclear“adoptiongap”in

manycountries,withtake-upofgigabitconnectivityfailingtomatchitsavailability.AccordingtoFTTHCouncilEurope15,fiber-to-the-homecoverageintheEurope

standsat62%ofhouseholds,butadoptionofpackagesisatjust50%,having

risenbyonlyonepercentagepointyear-on-year.Whatisresponsibleforthislaginadoptionofhigher-end,premiumservices?Alackofaffordabilitycertainly

playsarole,butvaluepropositionsbasedaroundspeedalsofailtoresonatewithcustomers.EYresearch16showsthatoneinthreecustomersfinditdifficultto

correlatebroadbandspeedstoperformance,whichfeedsintoabroaderpicturewherehalfdon'tfeelthatupgradingtofasterspeedsisworththeextracost.

Householdattitudestobroadbandspeed

Howmuchdoyouagreewiththefollowingstatementsrelatingtotheuseofhomebroadband

14%37%29%15%5%

Idon’tunderstandwhatbroadbandspeedreallymeansandhowitrelatestousingtheinternet

8%25%26%27%14%

Idon'tthinkupgradingtoahigherspeedpackageisworththeextracostpermonth

Agree

Stronglydisagree

Neitheragreenordisagree

StronglyagreeDisagree

Source:DecodingTheDigitalHome,EY,September2023.

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Top10risksintelecommunications

Interestingly,onespecificimpactofnewwaysofworkingthat’slargelygonebelowtheradarisitseffectonskillsdevelopmentandlearningneeds.Accesstolearningandskills(47%)isthetopfactorcitedbytelcoemployeesasameansofhelping

toensuretheythriveasremoteorhybridworkers.Andtheycitetrainingaroundcollaborationtoolsandremoteskills,alongsidevirtuallearning,asamongthe

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Failuretoimprove

workforcecultureandwaysofworking

Telcoemployeesoutscoreothersectorsonremoteworkingpreferences,whichalsofeedsintotheir

changingskillsandlearningneeds.

Comparedwithworkersinothersectors,telecomsemployeesaremorelikelyto

preferworkingremotelyandlesslikelytowanttobeattheworkplacefulltime.

AccordingtothelatestEYWorkReimaginedStudy,1730%ofpeopleworkingfor

telcosexpressapreferenceforworkingfullyremotelyandcommutingonlywhen

required,comparedwith23%oftheircounterpartsacrossallsectors.Andasked

whethertheyprefertobeattheworkplacefulltime,only14%oftelcoworkers

sayyes,comparedwith25%ofallemployees.Whilemeetingworkers’desirefor

remoteorhybridworkingmayofferbenefitsintermsofemployeeengagementandpotentiallyretention,itcanalsobringsomesignificantchallenges,notleastintermsofredefiningcollaborationparadigms.Forexample,ourresearchfindsthatonly

54%oftelcoemployeesagreethat“in-person”interactionisworththecommute.

mostdesirableimprovementstooveralllearninganddevelopmentprograms.Morebroadly,ourresearchunderlinesthatimprovementstoworkforcetechnologyand

toolsarestillessentialinaremote-workingworld:while43%oftelecomsemployeessaytheircompanyhasenhanceditstechnologyforremoteworking,34%believe

itstillneedstoundergoextensivefurtherchangetohaveleadingtechnologyandtoolsinthefuture.

Flexibleworkingpreferences:telecomscomparedwithothersectors

Question:Howwouldyoudescribeyourpersonal?exibleworkpreference?

Telecomsemployees

19%30%23%13%14%

Allemployees

18%23%19%15%25%

WorkanywhereFullyremotebutcommutewhenrequiredRemote?rsthybrid

Workplace?rsthybridFulltimeworkplace

Source:EYWorkReimaginedSurvey2023.

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However,whilethemomentumbehindecosystemsisbuilding,andcorporate

customersviewthempositively,manytelcosarestillquestioningtheeffectivenessofecosystemstrategies.ThemostrecentEYTechHorizonStudy19suggeststhat

whilemostoperatorsnowleveragepartnershipsandbusinessecosystemsasatooltoprovideservices,therearevariousfactorsatplayhinderingtheireffectiveness.Themaincauseoftelcos’skepticismaboutecosystemopportunitiesisaperceptionoflimitedvaluecreation,followedbyattachmenttomoretraditionalwaysofdrivinggrowthandconcernsovercybersecurityrisks(both25%).

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Telcoandtechproviders:topdriversofskepticismaroundecosystems2

Question:Whatiscontributingtoyourorganization’sskepticismabouttheopportunitiesaroundpartnershipsandecosystems?

Uncertaintyaroundthevaluecreatedorreturnoninvestment

Strategyisfocusedonmoretraditionalwaysofgrowingthebusiness

ConcernsaroundcybersecurityandprivacyA“builditourselves”mentality

Perceivedasbeingtoodif?culttoexecuteormanage

36%

25%

25%

Top10risksintelecommunications

Ineffective

engagementwith

externalecosystems

21%

18%

Enterprisecustomersassociatesupplierecosystemswithhigher-valuedeliveryandoutcomes,buttelcos

haveyettoadjusttheirmindsettomatch.

Enterprisecustomersaremorereceptivetobuyingfromserviceproviderswith

ecosystemawarenessandcapabilities:intheEYReimaginingIndustryFuturesStudy2023,1871%oflargeenterprisesacrossallindustriessaytheyprioritizetechnology

and5Gsupplierswithecosystemrelationships,withtheautomotivesector

recordingthehighestproportion,at81%.Atthesametime,arisingpercentageofcorporatecustomersvalueasuppliermorehighlyifit’sabletoarticulateitsrole

intheevolvingindustryecosystem,at50%in2023,upfrom47%in2022.This

shiftincustomers’buyingcriteriaismirroredbytelcos’continuingformationof

newecosystemsandalliances,especiallyinareaslikeAI,ESGandtheprovisionofprivatenetworks.

Source:EYTechHorizon2022,April2022.

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Top10risksintelecommunications

AnotherpotentialpainpointliesinemergingapproachestoregulatingAI.

PolicymakersarealreadystartingtodevelopguidelinesforthedevelopmentanduseofAI,takingarisk-basedapproachtohowAImightimpactcoreprinciplessuchas

privacy,nondiscrimination,transparencyandsecurity.OnecomplicatingfactorrelatestohownascentAIpoliciesimpactoralignwithotherdigitalpoliciesrelatingtodata

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Inabilitytoadapttochangingregulatorylandscape

Antitrustreviewsareanongoingcauseofuncertainty,whileregulators’earlyapproachestoAIpresentrisksoffragmentationbetweenjurisdictions.

DeepconcernovercomplianceburdenscomesacrossclearlyinEYCEO-level

research,20with61%oftelcoleadersbelievingthatregulatoryriskswillhavea

significantimpactontheirbusiness’sperformanceoverthecoming12months.

Recentmergerreviewshavebeencontentiousinsomemarkets,andregulatory

sentimenttowardconsolidationreviewsinothermarketsisdifficulttopredict,as

seenrecentlywithproposedtelcomergersinSpain21andtheUK.22Taxframeworksarealsoinflux,withbaseerosionandprofitshifting(BEPS)2.0rulescoming

intoforcein2024,whileincreasingsector-specifictaxes,andnewtaxes,posechallengesinsomemarkets.

privacy,intellectualpropertyprotectionandcybersecurity.Meanwhile,EYresearch23inthisfieldshowsthatsomedivergenceisalreadyemergingatthecountrylevelin

termsofthebalancebetweenguidelinesandplannedlegislation.TheEUistakingacomprehensiveapproach—butthishasreportedlytriggeredconcernsinthe

industry24thatitcouldstifleinnovationandlimitinternationalcompetitiveness.25

NationalandregionalapproachestoAIrulemaking

Legislationandregulations

More

Less

Canada

China

.EU

UK.

Korea

Singapore

.USJapan

Less

More

Guidelines

Source:TheArtificialIntelligence(AI)globalregulatorylandscape,EY,September2023.

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Top10risksintelecommunications

10

Failuretomaximizethevalueof

infrastructureassets

Carve-outsandsalesareunlockingimmediatevalue,butlong-termmarketstructuresremainunclear.

Telcos’effortstoreleasevaluefromtheirinfrastructurearegatheringpaceandscale.Recentyearshaveseenanaccelerationintheiradoptionofasset-light

strategies,withfibercarve-outssupplementingthetowersaleandcarve-out

dealsthathavebeenunderwayforadecadeandmore.EYresearchconductedthisyear26underlinestheindustry’scontinuedpropensitytotransactand

transformthroughinfrastructurecarve-outs,with41%oftelcoCEOstellingus

they’llactivelypursuedivestments,spin-offsandinitialpublicofferings(IPOs)inthenext12months,and61%sayingthey’llbeseekingtoformjointventuresorstrategicallianceswiththirdparties.

Europeantelecomsinfrastructuredeals,2017–2022

Numberofdealsbytype

15

10

5

0

201720182019202020212022

TowersSaleandseparationFixednetworksaleFibrenetworkJVandsale

Source:EuropeanFibreStories:Navigatingthepathfromsplitstoconsolidation,MorganStanley,March8,2023.27

However,whilesignificantvalueisbeingunlockedfrominfrastructure,andthe

immediatefinancialupsideofsalesandcarve-outsisclear,itremainsdifficultto

predicthowasset-lightapproacheswillevolveinthelongterm.Insettingtheir

strategiesforinfrastructureseparationandretention,telecomindustryleadersaresplitonwhetherbolderseparationintonetcosandservcoswillbecomeadominantindustrystructure.AnEYstudy28findsthat48%agreethisisalikelyfuture

scenario,buttheremainderareundecidedordisagree.Determiningtheoptimal

leveloflong-terminfrastructureownershiprequiresatelcotoconsiderawidearrayoffactors,includingthescopeforlegacynetworkdecommissioning,consolidationopportunitiesandtheevolutionof“infraco”businessmodels.

Telecomsleaders’perspectiveonnetcoandservcomarketstructures2

Towhatextent