Global telecoms operators are increasingly concerned about the risk posed by regulatory constraints including EU roaming rules and net neutrality, consultancy network BDO International said.
The 2017 edition of BDO’s annual Risk Factor Survey showed the number of telecoms executives citing regulation as a peril hit 80 per cent, almost twice the number highlighting the factor in its 2016 research (42 per cent). Regulation was in joint fifth place, alongside increased competition.
Noel Clehane, global head of regulatory and public policy at BDO (pictured), said operators are increasingly concerned about the impact of regulation and compliance on the telecoms sector.
Clehane noted government intervention in many global markets “undoubtedly made for a more rigorous regulatory regime”, noting there are “early signs that a growing compliance burden is impacting profitability”.
BDO quizzed executives from 59 operators, including AT&T, Verizon, Deutsche Telekom, Vodafone, Telefonica, Bharti Airtel, MTN, Megafon and Telstra. The research covers the year to end-April.
The consultancy pointed to the publication of the EU’s Electronic Communications Code in 2016 as a factor in the growing concern about regulation, noting it will require operators to invest heavily in high capacity connectivity at a time when ARPU is falling and they face more competition from OTT service providers.
Despite operators’ concerns over the risk of regulation, BDO’s 2017 research found interest rate fluctuations remain executives’ biggest worry, with 93 per cent citing it as a risk. Foreign exchange and currency fluctuations, and access to finance tied for second place in the list of concerns on 87 per cent, followed by liquidity and cash flow risks in fourth (85 per cent).