Over third of telcos believe pre-owned equipment is unreliable

circular economy equipment
Image by TarikVision | Bigstockphoto

Nine in ten telco operators (90%) believe the circular economy is important to their organisation and 89% say it’s part of their current business strategy, yet only 44% plan to buy pre-owned equipment over the next five years, according to research conducted by TXO, a leading provider of critical telecom network hardware and asset management services. The reason for this disparity is largely down to four industry barriers:

  • 33% of operators think pre-owned telecom network equipment is less reliable than new.
  • 49% say the circular economy supply chain is too complex. 
  • 21% believe pre-owned equipment is more expensive.
  • 33% say there isn’t enough information about how to join the circular economy.

The circular economy is a model that keeps products in the economic system for as long as possible, reducing the environmental impact by creating fewer new products. But despite the benefits, only 8.6% of the world economy is circular which means that less than 10% of materials used in a year are reused. This comes at a time when environmental pollution is at the highest it’s ever been and the earth is set to reach a temperature rise of 1.5℃ in around a decade.

But, while 75% of operators TXO spoke to say they’ll recycle equipment over the next five years, only 52% say they’ll be repairing equipment, 49% will resell it and 44% of operators say they will buy refurbished equipment. This shows that operators are not committing to a fully circular economy. 

Despite this outlook, operators are clear about the benefits of joining the circular economy:

Lowering carbon emissions

The majority of operators (72%) think the main benefit of joining the circular economy is lowering carbon emissions and 67% of operators expect to reach net-zero carbon emissions by 2040, 44% by 2030s and 23% this decade.

Overcoming supply chain challenges

84% of operators believe the circular economy can help solve supply chain challenges and accelerate network deployment. As many of the world’s major OEMs face supply chain issues due to the pandemic, security concerns over China and the Ukraine conflict, 72% of operators think supply chain challenges will be a problem for network deployments over the next year. 

Decreasing costs

While operators in many developed countries are under pressure to upgrade their networks to 4G, 5G and fibre to the X, they need to do it cost-effectively. 57% of operators believe that joining the circular economy can help reduce costs. This is also a priority for alternative network operators (Altnets), who are emerging as an alternative to the major operators but don’t have the same purse strings.

Minimising waste

70% of operators believe joining the circular economy offers huge advantages by minimising waste. The GSMA estimates that around 50 million tons of e-waste is produced every year, a figure that continues to rise. E-waste is electrical or electronic devices either discarded or reaching the end of their useful life. If E-waste isn’t recycled, it goes straight to landfill and is hugely damaging to the environment. 

Additional benefits

26% of operators consider ‘market differentiation’ as an advantage to joining the circular economy, with a quarter (25%) saying ‘knock-on benefits for customers/retention’ and the same number saying ‘shareholder value’. This indicates that some believe joining the circular economy improves their reputation among customers and gives them a competitive advantage. 

“As operators face pressure to upgrade their networks to meet internal and government targets, the circular economy enables them to accelerate network roll-out as well as reduce their carbon footprint, minimise waste, reduce costs and ease pressures on supply chains”, said Darren Pearce, Group CEO, TXO.

“And while mobile operators have already seen success recycling a huge volume of mobile phones as part of the circular economy, expanding their recycling capabilities to network equipment is an obvious next step. But we need more action to happen faster. Only then do we have any chance of achieving a greater circularity in telecoms and reaching our sustainability targets.”

Related article: Forget the marketing hype – now it’s all about sustainability

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