Refurbed kit Net Zero hero
A study by comms kit refurbisher TXO says two major problems for telcos could be solved by the circular economy. Network building delays could be avoided by tightening the supply chain with refurbed kit. Meanwhile, second life equipment has a minimal carbon footprint, which helps meet Net Zero compliance. However in the last two years incumbent operators and smaller alt-nets have had to wait longer for telecoms equipment, have had to pay more and have delayed their planned rollouts, according to its white paper, Navigating the supply chain chaos. According to the study, 85% of operators say they their project timelines were disrupted recently by supply chain issues, with 34% saying they’ve been delayed by six months or more. Roughly half suffered 11-30% cost increase on network hardware from OEMs.
Though the causes of the supply chain crisis are not examined the impact on service delivery is clear, according the report’s authors. Most (58%) of operators saw their new business pipeline affected, 42% of operators report that customer dis-satisfaction, 39% of operators saw revenue affected and 45% of MNOs report an ‘impacted network performance’. The extent of lost revenue, customer trust and network performance was not quantified. Nearly eight out of MNOs waited over 3 months for new kit and 41% waited over 6 months for critical hardware. Sourcing new equipment is increasingly challenging, said the report from the alternative supplier.
However, there is a definite conclusion drawn from the report. A growing number, 38%, of operators are now actively sourcing from the secondary market and solve supply chain challenges by using refurbished equipment, said the report by the refurbished equipment supplier. A third (32%) of operators say they don’t use the circular economy but would consider using it to solve supply chain disruptions. Now 82% of operators would consider buying refurbished network equipment to reduce costs, said the circular economy specialist.
As supply chain issues continue to disrupt operators, more and more of them are aware of the circular economy (recycling, refurbishing, reusing and repairing equipment) and its benefits, said TXO. “The supply chain crisis is having a significant impact on global telecom operators, from delays in sourcing new equipment to cost increases,” said TXO Group CEO Darren Pearce, “it’s clear this is damaging new business pipelines, revenue, network performance and customer satisfaction.” At the same time, operators are under pressure to extend connectivity and meet government targets for 5G and fibre network deployments. While many are wary about scaling up their equipment rollouts due to the huge supply chain delays and costs, the upcoming government deadlines are putting additional pressure on them to find alternative solutions.
As a result, sustainability considerations are becoming an increasingly important factor when selecting a new supplier, according to Pearce. By joining the circular economy and buying pre-owned equipment instead of new, operators can avoid the long wait for new equipment, save money and expedite installation in line with government targets, Pearce claimed. “This will also significantly reduce their carbon footprint and support their sustainability goals,” said Pearce.
Navigating the Supply Chain Chaos
Research methods
TXO conducted the research in Q4 2022 and Q1 2023, interviewing 90 global telecom operators and network integrators including:
15 Altnets
17 Fixed line network operators
12 Mobile network operators
27 Fixed & mobile network operator
19 Network integrators