Expired support contracts are top cause of decommissioned telco equipment – TXO report

Expiring manufacturer support contracts are the most common reason why operators choose to decommission parts of their networks, even though equipment could remain operational for decades, according to a TXO white paper.

Tereza Krásová, Associate Editor

May 30, 2024

3 Min Read
Digital visualisation of recycling symbol.
TXO maintains there are ways to keep aging equipment in place by leaning on the circular economy.(Source: Skorzewiak/Alamy Stock Photo)

Networks may be built to tick along uninterrupted and provide constant connectivity, but they consist of myriad parts that all eventually need replacing, or are upgraded to newer technology. Nevertheless, a new whitepaper from TXO, a telecom vendor focused on circular economy solutions, found that the number one reason why operators decommission parts of their network is to replace out-of-support hardware.

TXO surveyed over 50 operators from different countries and 29.2% of respondents stated this as the main reason. It notes that manufacturers only provide two years of support for equipment, forcing operators to refresh kit that could otherwise remain in place.

Speaking about this driver during a virtual press roundtable addressing the white paper, TXO's Head of Asset Recovery and Services David Evans said: "it's a very unfair carbon driver. When you talk about science-based targets and network spend, it's a very wasteful way of being." PTXO's business model is to step in and offer the support the manufacturer provided previously. 

Regarding how long the equipment can remain operational after the manufacturer withdraws support, Evans told Light Reading that the main factor is equipment maintenance. "The support element is purely an insurance. If it's maintained or even repaired, it can be kept in life for another 40 years," he said. 

As part of its core business model, TXO works with companies that are decommissioning parts of their networks and making it possible to use the legacy equipment elsewhere. "We can support others who have been left without a support contract and we become that support contract. And we do this for tier one operators globally already," Evans said. He also stressed that reused equipment is "as likely to fail" as brand new parts; TXO conducts testing of reused kit and provides an equipment warranty.

John Teasdale, group chief networks officer at TXO, added that there are some parts that are no longer being sold in the market. One example is when the OEM has ceased to operate or merged with another company. In the white paper, TXO also notes that mass redundancies at operators have made it more difficult to find specialists with knowledge of older hardware.

Cutting power demand and costs

TXO (or companies like it) can work with operators to reuse decommissioned equipment in their own networks, where applicable, or to resell it. TXO customers including BT, Liberty Global, Telia, Tele2 and Sky have opted for the latter approach, allowing them to generate "huge revenues," according to Evans. However, about 22% of operators are not reselling equipment at all, according to the firm's data. Meanwhile, most (53.7%) respondents reuse less than 10% of decommissioned equipment in their own networks.

The second most common reason for decommissioning equipment was increasing energy efficiency, and other sustainability considerations, according to 23.6% of respondents. The effect of introducing less power-hungry equipment is even greater given that it requires less cooling. Reducing power consumption by 1kW reduces cooling demand by another kilowatt, said TXO's Teasdale.

Reducing power consumption was closely followed by the related motivation of reducing opex, which was cited as a main driver by 22.6% of respondents. This is done by updating and replacing legacy equipment such as the public switched telephone network (PSTN), copper equipment, fixed platforms and 3G networks. Of the operators surveyed, 82% said decommissioning old equipment can reduce opex by 10% to 30%.

Moreover, replacing old equipment with new kit that has a smaller footprint can also reduce the amount of space needed to house it, which can bring additional savings. TXO says that about 20-30% of communication providers' hardware will go obsolete in the next two years. 

Meanwhile, 83% of communication providers are either currently decommissioning sections of their network, or planning to do so soon. Among those surveyed, 37.8% expect this to take between one and two years, while 29.7% say it is an ongoing process.

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About the Author(s)

Tereza Krásová

Associate Editor, Light Reading

Associate Editor, Light Reading

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