While the term ‘circular economy’ has long existed, its relevance to the telecoms infrastructure sector has become pronounced in recent years, particularly as disruptions to the global economy impact vendor supply chains and climate concerns pressure service providers to adopt greener practises. This is where Telecoms Traders is proud to be a key participant in the circular economy.
The circular economy challenges the longstanding concept of a linear economy by creating a closed loop where resources are reused, repaired, refurbished, or recycled to minimise waste. As natural resources become increasingly scarce, the transition toward a circular economy – across virtually every industry globally – is inevitable and necessary.
Nonetheless, the adoption of this regenerative approach realises substantial benefits to all players along the telecoms value chain, including service providers, original equipment manufacturers (OEMs), systems integrators, and end-users.
More resilient, cost-effective networks
Service providers can improve the longevity of their networks by purchasing used products from other operators. For networks which rely on components manufactured by defunct vendors or on discontinued products, relying on a secondary market for equipment is important, especially if it can help ensure continuity of critical network operations at minimal cost.
Identifying under-utilised equipment which can be refurbished or repurposed for better use in other parts of the network also help realise cost synergies. Working with systems integrators to identify components – either already installed or in warehouse – can help operators identify what parts can be used and reused internally, easing pressure on new capital expenditure in the process.
Operators can also circumvent other supply chain issues by sourcing telecoms equipment from secondary markets like Telecoms Traders. The global semiconductor shortage, for one, continues to lengthen lead times for deliveries of electronics, including telecoms equipment, while also driving up the selling prices of such devices. Relying on used equipment helps with urgent network upgrade and maintenance work and helps mitigate higher deployment costs from relying solely on equipment sourced directly from the vendor. This is where Telecoms Traders can support our customers globally with our access to a vast network of over 8 million reusable telecoms parts. Cost savings from operators could also ultimately be passed on in the form of lower costs for end users.
The advent of Open Radio Access Network (RAN) architecture is also liberalising the market for radio equipment and opening more options for operators at the edge level. The used equipment market can provide a wide range of radio devices at competitive costs for operators, thereby reducing vendor lock-in and mitigate concentration risks. A wider number of options promotes greater competition by allowing smaller, more specialised vendors into the supply chain at the expense of the well-established players. This could result in a positive knock-on effect on prices and innovation towards the long term.
Contributing to all-around sustainability
Sustainability is becoming a key global business practice, and the telecoms sector is not exempt from the trend. The telecoms sector consumes significant amounts of electricity while also utilising a substantial quantity of non-renewable commodities, including gold and other rare earths such as neodymium and palladium in the manufacture of equipment. Further, as the demand for devices and equipment is expected to increase exponentially over the coming years due to new 5G, fibre and next generation satellite network deployments, higher volume sourcing of virgin materials will be inevitable, leading to elevated levels of resource use.
During the disposal of these equipment, rare earths and other components and modules are also rarely re-harvested or recycled, meaning that they mostly end up in landfills and contribute further to resource wastage. As such, relying on secondary markets to source telecoms equipment will lead to a substantial reduction in wasted materials and mitigate the problem of wastage resulting from vendor equipment stockpiling.
Through proper asset management and recovery, service providers can also effectively refurbish, resell, or recycle old network equipment during network upgrades and modernisation. Systems integrators play a key role in helping their clients identify equipment which can be resold, reducing the generation of waste, and simultaneously generating a stream of potential income for operators. Cost synergies are also unlocked from reduced warehousing requirements for obsolete or decommissioned inventory.
Circular economy principals also help businesses reach their corporate social responsibility (CSR) targets of minimising waste, maximising resource efficiency and reducing carbon emissions. This is especially pressing for the telecom sector; considering the Covid-19 pandemic and the shift toward home-based learning and working, the spotlight for environmental responsibility has naturally gravitated to telecoms operators and data centre providers and, more specifically, the significant levels of energy and resources utilised by them to support online activities. Reducing waste from equipment and devices will be a key step for these service providers in complementing their sustainability efforts and push to go green.
Telecom vendors also have a key role to play in the circular economy through more efficient design of their equipment and incorporating more recyclable components in the design, or in optimising the equipment for second-use options, such as for future upgrades and for modularity. At the manufacturing stage, the use of sustainable production techniques, such as 3D-printing and robotics will reduce the usage of resources and generate higher levels of efficiency through lower electricity and manpower utilisation.
The Bottom Line
Incorporating circular business models can deliver substantial cost synergies to businesses across all stakeholders in the telecom industry, while also allowing them to become greener in the process. As consumers also become more conscious of the environmental impact of the products and services they consume daily, businesses which quickly transition toward a circular model will have a first mover advantage and being able to resonate with intrinsic customer demands will very likely generate new business and allow it to address a wider market.
Ultimately, keeping business as usual will become increasingly unviable, and businesses across the entire value chain need to move swiftly and rapidly to become more sustainable to not only meet consumer wants, but also to adapt to evolving regulation, particularly as governments take a harder stance on climate change and resource wastage to improve long-term social and economic wellbeing. Circular models can also help support innovation within the industry and contribute to increased efficiency over time, creating a win-win situation for all stakeholders.