Telco CEOs expect a significant transformation in their industry, with 72% predicting more carve-outs and divestitures in their regions during the next 12 months. The industry sees promising B2B transformation opportunities worth over 2 trillion in 2025. However, these promising figures mask potential risks that deserve attention.
The telecommunications sector continues to evolve rapidly. Industry leaders project major structural changes, as 44% expect a division between retail-focused service businesses and wholesale-oriented network businesses within five years. Service providers have already started embracing technological advancement, with 65% implementing AI strategies and allocating substantial resources to digital transformation.
Let’s look at the key risks that will shape telecommunications’ future. This blog will help you understand upcoming challenges and make informed decisions to safeguard your operations in 2025 and beyond. The information is taken from various worldwide sources as the telecommunication industry is not limited to country specifics – it’s a worldwide industry.
The Evolution of the Telecommunication Industry Risks
The telecom sector’s risk landscape has changed a lot. Companies now prefer asset-light strategies and separate their tower, fibre, and data centre assets. Looking at the historical risk patterns and their transformations, telecom companies used to focus on network availability and operational risks. The sector then built strong practices around infrastructure management [1]. Their risk landscape has grown greatly as telcos became tech companies delivering applications and services through complex infrastructure.
Today’s risk environment brings new challenges. The Telco industry expects cybersecurity breach costs to climb 40% from the previous years[2]. And the sector faces pressure from many directions. Right now, telco leaders say talent attraction and retention are their top priorities [3]. The supply chain has also become more complex. Telcos need access to innovative technologies while managing global collaborations and outsourcing arrangements [1].
Emerging Risk Categories for 2025
Looking ahead to 2025, three critical risk categories need attention:
- AI governance challenges
- Cybersecurity threats
- Legacy IT burden
- Complex regulatory landscape
New technologies in telecommunications create major operational challenges. Today’s telcos recognise AI’s benefits, with four out of five seeing its value. Yet more than 70% admit they need stronger defences against AI-driven threats [6].
AI Implementation Challenges
AI implementation’s scale and complexity create formidable obstacles. Telcos don’t deal very well with massive data volumes and some networks generate terabytes of metadata daily [6].
These are the biggest problems:
- Organisations struggle with fragmented and unstructured data that affects quality and preparation [7]
- Large-scale data processing for AI implementation leads to high costs [6]
- Need for more professionals who understand both AI and telecommunications [6]
Legacy System Integration Risks
Legacy infrastructure creates serious operational risks. About 75% of telco leaders say these outdated systems block innovation [8]. And outdated IT systems make cyber incidents more likely and worsen their effects [9]. These organisations are facing growing pressure from maintenance costs, especially when systems have years of undocumented customisation [10].
Organisations should replace their systems before they become obsolete to alleviate legacy IT risks [9]. Business units often resist these changes because they might disrupt core functions [10].
Cybersecurity Vulnerabilities
Telecommunications faces unprecedented security challenges with emerging technologies. The industry has become a prime target – it experienced 57% of all distributed denial of service attacks in early 2024 [8]. New technologies have expanded attack surfaces, and AI and cloud computing create new weak points [11].
Money is a big concern here. About 53% of telcos expect cybersecurity breach costs to exceed 4 million in 2023 [12]. The sector must tackle various security issues. SMS toll fraud and two-factor authentication hijacking have already hit major enterprises [13]. Modern telecommunication infrastructure’s complexity creates a wider threat landscape. [14]. This challenge grows worse because 54% of telcos can’t keep up with modern security standards while implementing newer technologies [15].
Market and Competition Risks
Communication providers are adapting to major changes in telecommunications market structures due to competitive pressures. Networks that combine fixed and wireless capabilities have joined forces to change competition patterns completely [16].
Traditional boundaries no longer define today’s competitive landscape. While established providers continue to shake up the market, 76% of telco leaders expect tech giants to become major disruptors within five years [8]. The competition extends beyond traditional players – 29% of industry leaders see satellite operators as potential game-changers [8].
Low-Earth orbit (LEO) satellites represent one of the most important competitive challenges by offering:
- Better data speeds and reduced latency compared to geostationary satellites
- Cost-effective mobile coverage options for regional areas
- Direct-to-handset features through mutually beneficial alliances with major operators [20]
Operational and Infrastructure Risks
Network infrastructure reliability serves as the lifeblood of telecommunication operations. High reliability has become crucial to winning new contracts and supporting emerging business models like smart manufacturing and remote surgery [5]
Base station failures pose the biggest problem in operations. These failures affect signal coverage and network resilience [5]. Research shows that 26% of households don’t get reliable home broadband connections “often” or “very often” [23]. The situation looks similar with mobile data, where 29% of users face frequent signal issues inside their homes [23].
Network reliability faces three critical challenges:
- Coverage dependence on spatial base station locations
- Environmental factors affecting infrastructure stability
- Power outages impacting base station functionality [5]
Supply Chain Vulnerabilities
Telecommunications supply chain complexities have reached new heights. Modern telcos need innovative technology while managing complex global partnerships [24]. Telecom companies must look beyond traditional safeguards and address third-party suppliers who might provide hardware or software with malicious malware..
Workforce availability poses a major challenge. Three-quarters of telecom companies consider this their main industry concern [27]. The sector doesn’t deal very well with recruitment, even though it offers salaries over $100,000 annually without requiring four-year degrees [27].
Companies rely more on the internet, cloud, and mobility services to stay competitive, which increases the pressure to maintain uninterrupted service [27]. Notwithstanding that, telcos must balance running and maintaining capital-intensive infrastructure against rising customer expectations, naturally pressuring their margins [24].
Regulatory and Compliance Challenges
Governments worldwide are implementing stricter controls in telecommunications to manage national security risks. The rules keep changing faster than ever. Telecom companies now struggle with multiple compliance programmes – some managing up to a dozen at once [24].
New frameworks keep emerging in different regions, making the regulatory environment more complex. The UK’s Telecommunications Security Act now imposes heavy penalties. Providers could face fines up to 10% of turnover plus £100,000 daily for violations [28]. The European Union’s Digital Markets Act has sparked several high-profile court cases against tech companies since its March 2024 compliance window [29].
Regulatory bodies now require telecommunications providers to:
- Protect networks from unauthorised access
- Report system changes that affect security
- Submit to compliance monitoring through information gathering
- Follow ministerial directions for national security risks
Data Privacy Compliance Risks
Data privacy creates unique challenges in telecommunications. Four in five telcos see AI benefits in their operations. Yet more than seven in ten want stronger protection against AI ‘bad actors’ [12]. The numbers tell a concerning story – 53% of telecom companies expect cybersecurity breach costs to exceed the 4 million total seen in 2023, which was already up 40% from 2022 [12].
Conclusion
Telecom risks have become substantially complex. Cybersecurity threats, market disruptions, and regulatory pressures have altered the map of the industry. AI and digital transformation create promising opportunities, but your organisation must tackle these challenges directly. This is a big deal as it means that breach costs exceed 4 million, which emphasises the need for resilient security measures.
The competitive landscape creates more challenges as traditional boundaries fade away. LEO satellites and hyperscalers have emerged as major innovators. Revenue vulnerabilities continue to grow in global markets. These shifts, combined with network reliability problems and supply chain complexities, just need careful strategic planning for 2025 and beyond.
Your success relies on finding the right balance between innovation and compliance while building operational resilience. The telecom sector faces unprecedented regulatory oversight, especially when you have data privacy and cross-border operations to manage. A proactive risk management strategy and smart technology investments will protect your operations from new threats.
References
[1] – https://www.telefonica.com/en/communication-room/blog/policy-trends-technology-telecoms-sector-2025/
[2] – https://strandconsult.dk/2025-predictions-and-2024-global-mobile-telecom-industry-review-from-strand-consult/
[3] – https://insights.sei.cmu.edu/blog/4-elements-in-securing-the-telecommunications-supply-chain/
[5] – https://www.sciencedirect.com/science/article/abs/pii/S0951832023002491
[6] – https://www.rcrwireless.com/20240701/featured/implementing-telco-ai-five-challenges
[7] – https://www.n-ix.com/ai-in-telecommunications/
[8] – https://www.ey.com/en_gl/newsroom/2025/01/trust-and-talent-issues-lead-telco-sector-risks-with-ineffective-transformation-a-growing-concern
[9] – https://www.cyber.gov.au/resources-business-and-government/maintaining-devices-and-systems/system-hardening-and-administration/legacy-it-management/managing-the-risks-of-legacy-it-practitioner-guidance
[10] – https://www.qao.qld.gov.au/blog/how-you-can-manage-risk-your-legacy-systems
[11] – https://www.protiviti.com/au-en/survey/top-risks-technology-media-and-telecommunications-2024
[12] – https://www.ey.com/en_gl/insights/telecommunications/top-10-risks-for-telecommunications
[13] – https://www.darkreading.com/vulnerabilities-threats/how-telecom-vulnerabilities-can-be-a-threat-to-cybersecurity-posture
[14] – https://www.thefastmode.com/expert-opinion/34779-2024-telecom-cybersecurity-in-the-era-of-big-tech-and-hyperscalers
[15] – https://www.computerweekly.com/news/252497963/Legacy-tech-integration-issues-impede-telcos-digitisation-ambitions
[16] – https://www.oecd.org/en/publications/emerging-trends-in-communication-market-competition_4ad9d924-en.html
[17] – https://www.sciencedirect.com/science/article/pii/S1059056024002703
[18] – https://www.sciencedirect.com/science/article/pii/S0014292123000661
[19] – https://developingtelecoms.com/telecom-business/vendor-news/17898-ericsson-s-year-on-year-sales-collapse-in-emerging-markets.html
[20] – https://www.accc.gov.au/system/files/communications-market-report-2023-24.pdf
[21] – https://www.infosysbpm.com/blogs/bpm-analytics/what-is-revenue-assurance-in-telecom-industry.html
[22] – https://www.telecomtv.com/content/security/security-is-the-number-one-risk-facing-telcos-in-2025-says-ey-52176/
[23] – https://inform.tmforum.org/features-and-opinion/top-10-risks-for-telecommunications-in-2024
[24] – https://kpmg.com/au/en/home/insights/2021/06/risk-spotlight-telecommunications-sector.html
[25] – https://www.origina.com/blog/three-telecommunications-it-challenges-to-conquer-in-2025
[26] – https://xygeni.io/blog/strengthening-telco-defences-against-supply-chain-attacks/
[27] – https://veriforce.com/blog/the-top-2-telecom-challenges-skilled-workforce-availability-and-network-quality-and-reliability
[28] – https://www.nccgroup.com/au/newsroom/how-can-telecoms-organisations-navigate-the-changing-regulatory-landscape/
[29] – https://iclg.com/practise-areas/telecoms-media-and-internet-laws-and-regulations/01-global-regulatory-trends-in-telecom-regulation