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Chip shortage delaying network upgrades by 8-12 months, rural group says

The Rural Wireless Association (RWA) warned that its members are being forced to wait up to a year for the equipment they need to upgrade their wireless networks. That's significantly longer than the six to eight weeks they normally budget for such deliveries.

The culprit? The global chipset shortage, and its effect on the supply of networking components.

"One RWA member has been told to expect lead times to extend at least 8 months for radio access network equipment," the association warned the FCC. "The RWA associate member also expects that certain semiconductor components used in networks may be in short supply in the coming months, limiting overall availability."

The RWA isn't the only player in the wireless industry sounding the alarm. For example, after AT&T CEO John Stankey said he's a "little skittish" about shortages, the company organized a virtual event around the issue to warn policy makers on how the situation might affect the global telecommunications industry.

And though executives from Verizon and T-Mobile have reported no delays from the global chipset shortage, other, smaller companies in the telecom industry haven't been so lucky. For example, Gogo said earlier this year it would delay the launch of its 5G network until 2022 due to the shortages. And companies ranging from Infinera to Samsung to Apple have warned that the issue will significantly cut into their expected revenues in the coming months.

"Carriers are currently struggling to quickly receive the equipment they need as there are semiconductor chip shortages across the market," the RWA explained in its filing with the FCC.

Ericsson and Nokia are the primary equipment suppliers to the smaller wireless network operators in the US. Though neither company has reported any direct impacts from the shortages, both have acknowledged the issue.

"It would be naïve for anyone to say that this would not be a serious shortage, and most likely it will continue for another year or even two years," Nokia CEO Pekka Lundmark told Reuters last month, noting the company has been forced to wait longer than normal for supplies.

To be clear, the RWA is hoping to use the shortages to convince the FCC to change some of its rules around the agency's "rip and replace" program. The program, with almost $2 billion in Congressional funding, intends to finance the replacement of networking equipment supplied by Chinese vendors deemed a threat to national security. The FCC is expected to soon begin doling out money to eligible US network operators – including some RWA members – but has said that operators need to finish their ripping and replacing within one year.

That's not enough time, according to the RWA and others.

"The standalone one-year deadline to complete the replacement, removal and disposal of unsecure equipment and services is an insufficient amount of time to complete the entire process given potential delays associated with these shortages that are beyond carriers' control," the RWA argued. The association said the problems generated by chipset shortages have been exacerbated by the difficulty operators are facing in obtaining technicians to perform the work.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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