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Strategic Risks

Strategic risks are those which threatens Tele2’s ability to achieve its strategic objectives.

In many cases (but not all) these are operational, compliance or financial risks which when aggregated have a material effect on the Tele2 group.

Risks which could threaten Tele2’s ability to achieve its strategic objectives are assessed by the Group Leadership Team (GLT).

The Head of Internal Audit is responsible for coordinating the strategic risk assessment process and for escalating risks to the Group Leadership Team for discussion and final assessment.

  • The strategic risk management process begins with identification of risk areas.
  • Each of these risk areas are then assigned to a risk owner (an individual GLT member) who is responsible for breaking down the risk into quantifiable risk scenarios, for which potential impact and likelihood is then assessed.
  • The risk owners are also responsible for identifying actions to mitigate the risks, where possible and to monitor and report any development to the rest of the Group Leadership Team.
  • The strategic risks are also reported and discussed with the Audit Committee and/or the full Board of Directors

The Strategic Risk process is actively involved in monitoring various emerging risks. Risk emergence is monitored for existing risks from the perspective of emergence of new variables or completely new risks.

For example, spectrum risk is an inherent risk to our business. The winning of spectrum auctions is vital in order for Tele2 to conduct a substantial part of the business. A failure to obtain a spectrum license at a reasonable price, award of such license to one of Tele2’s competitors and the burden of compliance to license requirements could result in Tele2 not being able to upgrade, maintain and expand its network.

Through active monitoring of emerging trends within this risk we believe that the residual impact and likelihood of this risk is relatively low with regard to our most important market.

Active risk mitigation measures exist in the form of processes in place to ensure compliance with license requirements to increase chances of renewal and extension of existing licenses or obtaining new licenses. Tele2 also works in close contact with regulators and industry associations to become aware of upcoming license distributions or redistributions. Despite these active mitigation measures, we continue to acknowledge the fact that the outcome of such mitigation measures is coupled with uncertainty.

A complete list of our most important strategic risks have been described in our annual report with a description of our risk mitigation measures.