Top 10 risks facing telecom companies in 2025

EY said companies should not underestimate changing imperatives in privacy trust.

The global telecoms industry’s comparatively strong share price performance over the past year suggests it has weathered recent challenges, but it will face significant existing and emerging threats, according to an EY report.

The report said that companies should not underestimate changing imperatives in privacy, security, and trust as Generative AI (GenAI) is already having a positive impact amongst connectivity providers.

However, EY research found that two-thirds of customers want better explanations about how AI is used, whilst four in 10 employees are not confident in using AI responsibly.

The sector’s relatively high degree of remote working also challenges collaboration and upskilling. Meanwhile, 85% of telco employees believe human resource functions will require major or moderate change over the next five years.

Additionally, telecom companies risk ineffective transformation through new technologies and poor management of sustainability agendas.

Moreover, their inability to take advantage of new business models to drive revenue will be made harder by telcos' heavy reliance on intermediaries.

Further, mobile data reliability is in decline whilst more sophisticated 5G standalone networks offering better performance levels have been slow to materialise.

EY noted that the shift to open radio access networks (Open RAN) promises several positive impacts. However, only 17% of telcos cite Open RAN as a critical element, with many first-phase deployments still relying on a single vendor.

Telecom companies are at risk of failure to mitigate value chain disruption as they lag in research and development spending. Industry research shows telcos spend only 1% of their revenue on R&D — well behind network equipment providers at 17%.

Industry leaders also expect to face a widening range of regulatory and policy issues, with a growing impact from emerging domains like AI regulation and digital markets.

Whilst asset-light mergers and acquisitions bring financial benefits, opportunities to reconfigure operating models are being overlooked by telecom companies.