While these initiatives unveil a universe of possibilities, potential risks and uncertainties arise in a volatile business environment. The distress signals need to be addressed with urgency for smooth operations Therefore, we have created a robust risk managementthat caters to strategic, legal, financial, operational and climate risks that caters to strategic, legal, financial, operational and climate risks. We have a sound practice to identify key risks across the Group and prioritize relevant action plans for mitigation.
the Risk Management Framework is reviewed periodically by the Company’s Risk Management Committee. The Board of Directors performs an annual review. These apex reviews include: discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. The Internal Audit function is responsible to assist the Risk Management Committee on an independent basis with a full status of risk assessments and management. The Risk Management Committee also obtains periodic updates on certain identified risks, depending upon the nature, quantum and likely impact on the business.
the respective CEOs for the Management Boards (AMB and Africa Exco) are accountable for managing risks across their respective businesses, viz.,
India & South Asia, and Africa. The strategic risk registers capture the risks identified by the operating teams (Circles or Operating Companies) as well as the functional leadership teams at the national level. The AMB / Africa Exco ensure that the environment – both external and internal – is scanned for all possible risks. Internal Audit reports are also considered for identification of key risks
the Executive Committees (EC) of Circles in India and Operating Companies in the international operations are entrusted with responsibilities of managing the risks at the ground level. Every EC has local representation from all functions, including many centrally driven functions like Finance, SCM, Legal & Regulatory besides customer facing functions, such as Customer Service, Sales & Distribution and Networks. It is the responsibility of the Circle CEO or Country MD to pull together various functions and partners to manage the risks. They are also responsible for identification of risks, and escalating it to the Centre for agreeing mitigation plans. Operating level risk assessments (RACM) have been concluded at Function / OpCo risk assessment and mitigation plans agreed and kicked off.
Internal Audit Plans are being drawn up to ensure scope and coverage of these critical risks during the course of next year.
Risk identification process
Potential risks | Risk definition | |
---|---|---|
1 | Regulatory and political uncertainties | Uncertainties pertaining to political instability, civil unrest and other social tensions in India, Sri Lanka and 14 African countries. |
2 | Economic uncertainties | The volatility in economies with factors like capital controls, inflation, interest rates and currency fluctuations may impact the earnings and operations of the Company |
3 | Poor quality of networks and information technology including redundancies and disaster recoveries | Risks in Network subject to technical failures, human errors and natural disasters. Erratic IT connectivity may affecting service delivery. Changing of systems landscapes into newer version. |
4 | Inadequate quality of customer lifecycle management | Heightened competitive intensity on account of irrational pricing by new entrant leading to erosion of revenue & customers. Ever-rising customer expectations in terms of quality, variety, features and pricing. |
5 | Non-compliance of subscriber verification norms and KYC regulations | Stringent subscriber verification and KYC guidelines, including biometric verification and quality of KYC documents. |
5 | Non-compliance of subscriber verification norms and KYC regulations | Stringent subscriber verification and KYC guidelines, including biometric verification and quality of KYC documents. |
6 | Increase in cost structures ahead of revenues thereby impacting liquidity | Increase in cost structures from volumes (new sites rollouts, capacity) and/or rate increases (inflation, Fx impacts, wage hikes, energy etc.). |
7 | Adverse regulatory or fiscal taxation developments including compliance risks | Regulatory and tax developments in India, South Asia and Africa can pose several challenges to the telecom sector. |
8 | Lack of Digitisation and Innovations around Digital Content | Rapid technology evolution may impact the functionality of existing assets and accelerate obsolescence. Keeping pace with changing customer expectations is a big agenda for the telecom sector. |
9 | Lack of investment in infrastructure capacity building | Telecom companies will be required to invest heavily in building data capacities and broadband coverage expansion. |
10 | Gaps in internal controls (financial and non-financial) | Gaps in internal controls and / or process compliances not only lead to wastages, frauds and losses, but can also adversely impact the Airtel brand. |