Seven urgent innovation priorities for telecom CEOs

There is a cyclical surge to build fibre networks. The continued worldwide 5G network deployments—and the 6G networks that will follow—require telecom engineers and tech talent, and are also driving demand for construction and civil workers. But there are labour supply shortages in many of these markets. Telecom companies need to launch initiatives to attract and retain highly skilled and innovative talent (e.g. forming partnerships with educational institutions and governmental bodies, implementing talent development programmes, etc.).

As telecom companies increasingly seek growth through geographical expansion and diversification into non-core industries, they will engage with unfamiliar regulatory frameworks outside the telecommunication space. And, as we’ve noted, the rise of AI and GenAI is imposing a sense of urgency for leaders to ensure responsible use of these new technologies. These circumstances compel leaders to engage proactively with policy-makers in order to help shape regulatory frameworks and ensure compliance.

Sustainability is now a crucial element for companies to operate effectively. Recently, transparent reporting on ESG (environmental, social, and governance) performance has shifted from a mere goal to a necessary requirement for regulatory compliance, societal expectations, and maintaining reputation.

In March 2024, the Hong Kong Government’s Financial Services and the Treasury Bureau published a statement setting out the vision and approach of the Government and financial regulators towards developing a comprehensive ecosystem for sustainability disclosure in Hong Kong. In particular, the Government will work with financial regulators and stakeholders to develop a roadmap on the appropriate adoption of the International Sustainability Standards Board’s (ISSB) Standards, and the Hong Kong Institute of Certified Public Accountants (HKICPA) will assume the role of the sustainability reporting standard setter in Hong Kong to develop local sustainability reporting standards aligned with the ISSB Standards.

In April 2024, the Stock Exchange of Hong Kong (The Exchange) published conclusions to its consultation on the enhancement of climate-related disclosures under its ESG framework. The Exchange noted broad-based market support for this enhancement but agreed to modify its proposals to reflect IFRS S2 more closely. The new climate requirements will be phased in from 2025. The Exchange has also published implementation guidance that includes references to the relevant principles in IFRS S1 to assist issuers’ compliance with the new climate requirements.

While the regulatory environment continues to evolve, the overall direction is established and irreversible. The call for achieving net-zero emissions is clear and has garnered public commitments from most telecom operators. However, the specific path to achieve net zero remains less certain.

As is evident, the agenda of telecom CEOs is remarkably full. It is filled with both complex challenges and compelling opportunities. Taking them on and embracing them is the work not just of a single leader, but of the full senior leadership team. And, as our colleagues note, the industry is not alone in facing the reconfiguration imperative.

But what’s needed is not just far-reaching strategies and flawless execution. Rather, an important shift in mindset is required. Leaders need to be both radically audacious and incredibly practical: radically audacious in questioning previous assumptions and established products, and in scaling solutions at high speed. And they need to be incredibly practical in developing realistic plans and overcoming the powerful forces of inertia. The future is on the line.