During a period of two years, three catastrophic telecommunications network outages drew the ire of customers and scrutiny of regulators who initiated probes to understand the incidents and prevent future occurrences. The outages at Rogers (Canada), Optus (Australia), and AT&T (US) underscored the critical dependency of modern economies on telecommunications networks. Network outages impact more than just calling, texting, or browsing; they disrupt life-saving emergency services, financial transactions, and connected devices in various sectors. This Insight Note outlines regulatory recommendations and emphasizes the importance of auditing internal processes and conducting thorough pre-investment technical due diligence for telecom investments to ensure network resiliency and reliability.
Network Resiliency and Reliability in Pre-Investment Due Diligence
Network failures are drawing increased scrutiny from regulators, raising the likelihood of financial penalties, as seen on several occasions. Outages negatively impact brand reputation and result in direct financial losses due to client compensation. This underscores the importance of auditing for network reliability and resiliency in pre-investment due diligence processes. Reliability and resiliency involve validating network architecture, reviewing configuration and incident management processes, testing software and hardware, and evaluating service level agreements with vendors.
Network performance is equally critical in due diligence as it relates to the service provider’s competitiveness, including the ability to scale services, resource availability, cost, and the technology roadmap. Our extensive experience in technical and commercial due diligence in telecom assets has revealed significant shortcomings requiring substantial investment to rectify, such as improper equipment configurations. Addressing these issues through thorough due diligence enables investors to make informed decisions, ensuring their investments are robust and aligned with future growth and technological advancements.
We have also published two Insight Notes on network reliability and resiliency. See here to download:
- Telecom Network Reliability and Resiliency Challenge (January 2024)
- Emergency Roaming to Mitigate the Impact of Catastrophic Network Outages (January 2024)