We have a Group-wide risk and opportunity management system in which we record various risks and opportunities as well as emerging risks for our company. It helps us manage potential threats, seize opportunities, and increase resilience to unpredictable events. It also supports strategic decision-making.
You can find more detailed information on the Risk and Opportunity Management System in our Annual Report 2024.
Taking a closer look at emerging risks
New or foreseeable risks for the future, the risk potential of which is not yet known with certainty and whose effects are difficult to assess, are referred to as emerging risks. These can be geopolitical tensions, new technologies or macroeconomic factors. While these risks may already be impacting our business today, their effects may increase within three to five years and affect us much more severely in the future.
If we want to protect our company and our customers from these risks, we must identify and evaluate them at an early stage and initiate measures to mitigate risks as part of our risk and opportunity management system. In order to reduce negative impacts, we may also need to adapt our strategy or business models.
Our 5 Emerging Risks
Cyber attacks
Climate change
AI & Digital Disruption
Geopolitical instability
Availability of talent
Cyber attacks
The speed of digital transformation, machine learning, and computing power is increasing exponentially. At the same time, there are more and more cyberattacks, which are also more sophisticated and efficient. They overhaul security optimizations, so that the number of possible gateways for attacks in our company increases.
The effects of this risk include, but are not limited to:
- System failures and business interruptions
- Loss of customer data with resulting fines and reputational damage
- Rising cybersecurity costs (including infrastructure, processes, personnel)
Our mitigation measures include, but are not limited to:
- Increased investment in cybersecurity infrastructure, experts, training, and communications, as well as regular cybersecurity testing, such as phishing and penetration testing
- Develop and update cyber incident response plans
- Use of AI-powered early detection and response tools
For more information on cybersecurity, see Cybersecurity and data protection here in the CR report.
Climate change
Advancing climate change is leading to more intense and frequent extreme weather conditions at an ever faster pace. This is associated with phenomena such as warming of the oceans, higher heat and humidity, as well as rising average temperatures and severe storms or heat waves. These events, in turn, could lead to natural disasters such as floods and droughts.
The effects of this risk include, but are not limited to:
- Damage to the network infrastructure
- Data Center Cooling Challenges
- Delivery delays due to interrupted supply chains
Our mitigation measures include, but are not limited to:
- Introduction of carbon-reducing business models (e.g. recycling and waste reduction)
- Creation of emergency plans, for example with assessment of critical systems and resources
- Increasing the resilience of own sites and in the supply chain to extreme weather events (e.g. strengthening physical site protection)
Further information on our approach to climate protection can be found under Climate protection here in the CR Report.
AI and Digital Disruption
Disruptive technologies such as cloud and quantum computing, AI and machine learning are developing rapidly. In addition to opportunities, they also bring new risks, including unexpected AI decisions, privacy issues, and more false or misleading information. Increasingly sophisticated AI-generated content can lead to social divisions, political repression and new forms of cybercrime.
The effects of this risk include, but are not limited to:
- More frequent and successful cyberattacks
- Wrong decisions based on incorrect or non-transparent information
- Loss of reputation, e.g. due to misinformation, disinformation or discrimination
Our mitigation measures include, but are not limited to:
- Establish company-wide controls to guide the development and deployment of new technologies and establish strong policies, procedures, and measures.
- Continuous investment in upskilling programs to ensure the necessary digital skills.
Geopolitical instability
Tensions at the international level threaten the stability of the global economy and financial markets. Economic, political and/or technological rivalries between different geopolitical actors could lead to new trade barriers and thus further drive deglobalization.
The effects of this risk include, but are not limited to:
- Destruction of network infrastructure through political uprisings and sabotage
- Supply chain disruptions or delays
- Uncertainty in strategic and financial planning
Our mitigation measures include, but are not limited to:
- Close monitoring of policy developments and adaptation of our shoring strategy
- Integrating geopolitical risks into the company-wide risk assessment and developing/validating corresponding contingency plans
- Development/review of scenario planning activities
Availability of talent
Our long-term success depends on our ability to acquire, retain and develop top talent. However, there could be an exacerbated labor shortage if new jobs require special technological skills and more workers retire.
The effects of this risk include, but are not limited to:
- Failure to achieve growth targets
- Higher costs for upskilling and reskilling as well as talent programs
- Increasing talent turnover, for example in the IT/tech sector
Our mitigation measures include, but are not limited to:
- Inclusion of new ways of working that take into account the needs of employees, esp. an inclusive, flexible environment
- Shifting the focus of recruiting and development from roles to skills and from experience to learning
- Developing training programs to upskill existing employees, as well as creating long-term incentives and compensation programs to retain and develop talent
Looking ahead
To strengthen Deutsche Telekom’s resilience, we are taking targeted measures to minimize the risks described. In this way, we want to ensure that we can continue to operate successfully and sustainably in the future.
Deep Dive for experts
Management & Frameworks
- Our Group-wide risk and opportunity management system is organized in a decentralized manner. Methods for this and for the associated reporting, especially the Group Risk Report, are specified by the Group Risk Governance department. All operating segments as well as the Group Headquarters & Group Services segment are connected to the central Group system via their respective risk and opportunity management systems. In the segments, the respective managers are responsible for identifying, evaluating and continuously monitoring the risks. Possible opportunities are taken into account by the management in the annual planning process and continuously developed in the course of the operational business.