Business on the Edge 2024

Telecommunications Financial overview Average company EBITA margin (2023) Total industry fixed assets value (2023) Average company fixed assets value (2023) High LowHigh Low Extreme heat Wildfire Coastal flooding Tropical cyclone Water stress Drought Fluvial flooding2035 205550 74 21 611 10 45 53 16514 9 Connectivity during disasters Climate hazards can harm essential telecommunications infrastructure, causing major service interruptions. Such outages obstruct communication during emergencies, affecting public safety and disaster response and raising the likelihood of misinformation.Augmented cybersecurity risks Climate hazards can exacerbate cybersecurity vulnerabilities. Outages caused by climate hazards may damage critical infrastructure, including data centres and communication networks; this leads to failures in security systems, making them more susceptible to cyberattacks during periods of crisis.Declines in jobs and economic prospects Unreliable telecommunications infrastructure can limit educational and work opportunities. Communities with unreliable connectivity may struggle to attract businesses and investment, which can cause a cycle of economic decline and further impact residents’ ability to seek employment.19.2% $1,579.9 billion $13.4 billion Sector overview The telecommunications sector is made up of three categories of companies: telecom services, including voice services (traditional & mobile) and data services (internet access); telecom equipment, such as hardware manufacturers (fibre optics, switches, satellites); and infrastructure providers that maintain the physical networks. Financial implications of climate hazards Fixed asset losses are significant and growing Average fixed business asset losses for telecommunications companies under low and high emissions scenarios ($ million per year; 2035, 2045, 2055) Extreme heat is the major threat; water stress & drought growing Estimated fixed asset losses for all listed telecommunications companies under high and low emissions scenarios, by climate hazard ($ billion per year; 2035, 2055) Notes: Analysis of n=153 listed travel companies. Source: S&P Global Sustainable1, Accenture analysis.Estimated losses climb to roughly a third of earnings by 2055 Fixed asset losses as a proportion of EBITA under low and high emissions scenarios (% EBITA per year; 2035, 2045, 2055) Societal implications of climate hazardsTELECOMMUNICATIONS Low High (additional losses) Total losses (High)2055 2035 2045563746 518604760200 142 45 960 2035 2045 2055 Low High20.3%22.1%23.7%29.3% 29.8%37.7% By 2035, the average telecommunications company is expected to face fixed asset losses of $518–563 million per year due to climate hazards, increasing to $604–746 million by 2045 and $760–960 million by 2055, depending on the emissions scenario. This underscores the need for adaptation measures to protect critical infrastructure and ensure uninterrupted service. The losses to property, plant and equipment are set to equate to 20.3–22.1% of earnings by 2035, potentially leading to higher service costs and reduced funds for network expansion or technological advancements. Extreme heat is expected to be the primary driver of losses, accounting for $45–50 billion (74–75%) of the industry total in 2035, emphasizing the need for heat-resistant equipment and cooling technologies. Water stress is set to contribute 15–16% to these losses in 2035, highlighting the importance of sustainable water management practices to maintain cooling systems and data centres. Business on the Edge: Building Industry Resilience to Climate Hazards 57