Putting refurbished network gear to work

• Part two of our look at the recycled network equipment sector
• Chinese technology can’t be used in some markets but is in demand elsewhere
• Some Huawei 5G gear is being resold before it’s even unpacked, says TXO’s CEO
• But for telcos planning a large RAN equipment refresh, second-hand kit is not regarded as a feasible option, according to industry analyst
   

As network operating and deployment models change, and sustainability/circular economy KPIs impact telco strategies, so the option to use recycled technology becomes of greater interest to at least some operators, as we noted in the first part of this article – see The growing case for network equipment recycling.

And the refurbished telecom network equipment market is also being impacted by geopolitical trends, in particular the increasing ostracisation of the Chinese vendors Huawei and ZTE, which during the past couple of decades have supplied their products to network operators all over the world.

So we asked Darren Pearce, CEO at refurbished telecom equipment supplier TXO how much of the gear that passes through his company’s hands comes from the Chinese vendors.

According to Pearce, most of ZTE’s deployed and distributed products are “either now fully removed” or have been recycled.

“Huawei is obviously a bit more interesting – it’s a bit more current. It has a lot of product out there globally. I have to be very clear that, obviously, it’s a very regulated market so, as you’d expect, this product has to go through lots of export controls, etc.”, Pearce noted, without providing details of how much of the equipment it supplies was made by Huawei.

He did emphasise, though, that not all countries have decided to rip and replace Huawei kit from telco networks.

Pearce gave a “quite shocking” example from TXO’s repository, as the company has “a large amount of product in our warehouse that was brand new, never been opened, still in its original box – Huawei 5G”.

Without mentioning names, he noted that operators typically need to think about programmes related to buying network equipment a long time in advance.

Since the decision by the UK government requiring telcos to rip and replace Huawei gear, British telcos have had to not only put the brakes and stop buying certain equipment, but also to remove gear that has already been installed, Pearce added.

“So, we’ve definitely seen the ‘stop part’ happening as in customers saying, ‘we have this new product on the shelf that we cannot use’. It’s perfectly fine from a condition [point of view] – as I say, a lot of it is still new, [still] in the box. Environmentally it’s not a good thing [that] such wastage is being created. But technically, we have to believe it’s the right decision”, he noted.

He explained that in such circumstances, TXO takes the product on behalf of its customers and looks to sell it on in other less restrictive markets. “There are lots of places in the world” that have not barred or restricted the use of Chinese technology, and in those markets there is still demand, whether for 4G or 5G network equipment. “If it’s 5G, there is a market for this product. And naturally, for us if it’s new, in the box, it’s much easier because we don’t have to do anything with it. And commercially has more value – it’s a very quick transaction”, Pearce noted.

He suggested that a lot of Huawei’s equipment that is being recycled from the UK operators quickly goes back into the market – and not in far-away regions such as Africa and Latin America, but “some of it literally just goes across the English Channel”. Essentially, the kit moves into “a very quick circular economy cycle” and, according to the TXO boss, operators get a partial recovery of their initial investment.

He stressed that the bulk of TXO’s overall product is sourced from first-world economies and goes “straight back into first-world economies”, with the US being the biggest single market.

The need for reused equipment, according to industry analysts

According to Gabriel Brown, senior principal analyst, mobile networks at Heavy Reading, for operators planning “a large RAN [radio access network] equipment swap, second-hand equipment is not the answer in most cases. A swap or refresh is an opportunity to introduce the latest generation of RAN equipment, which invariably delivers major capacity and energy efficiency gains in the same, or smaller footprint, as legacy equipment”.

He acknowledged that in smaller markets or in special situations the second-hand market can be effective – for instance, where operators need to source products at attractive prices or where the vendor is phasing out the product line and availability is limited – but in general, “a RAN refresh is a rare opportunity to introduce state-of-art technology”.

Meanwhile, it is “important environmentally for the industry to reuse equipment that still has years of good service ahead of it”, Brown added.

Another research house, Omdia, sees reuse as “a big trend”.

“The corporate mantra regarding sustainability is to reduce, reuse, recycle,” but most of the activities by communications service providers (CSPs) so far have focussed on reducing energy consumption, commented Dario Talmesio, India’s research director for service provider strategy and regulation.

“Now we see that the attention is moving also to reuse. Many CSPs today offer refurbished devices to their customers – these are not just handsets, but also home Wi-Fi routers and other boxes. It is logical that all hardware equipment, including network-related hardware, is now subject to the same level of scrutiny. After all, most of telecom’s carbon footprint is generated by hardware, not by electricity to run networks”, Talmesio noted.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV