Across most developed economies, the scale of telecom equipment decommissioning — the process of retiring legacy infrastructure — is continuing at an astonishing pace. These markets were the first to adopt earlier generations of communications technology at scale, but they now need to make urgent progress toward systematically removing outdated hardware, including switches, routers, cables, radios and myriad other components.
This is a necessary step on the road to progress, but it comes at a cost. Aside from the obvious financial burden, replacing hardware at scale has a significant environmental impact. To help alleviate this, service providers are looking to the circular economy to source and dispose of hardware more sustainably.
What’s driving network decommissioning?
There are several drivers for decommissioning, but a primary reason is simply that hardware has significantly improved. Modern equipment — such as fiber optics in fixed networks and 4G and 5G components in mobile networks — is much more efficient. Not only does decommissioning old technology support increasing connectivity requirements, but it is also more power-efficient, prompting service providers to upgrade to networks that deliver more while consuming less.
In the United States, AT&T and Verizon have all but phased out 3G networks in favor of 4G and 5G. Similarly in Canada, Bell has committed to specific dates for its shutdowns, while Rogers isn’t far behind. In Europe, BT Group remains the most visible example of a legacy service provider decommissioning its old estate, retiring its 3G networks and closing down its PSTN (public switched telephone network) and thousands of telephone exchanges, instead focusing on investing in its fiber optic network and 5G.
Another major driver of decommissioning is regulation. In some markets, regulators are mandating the shutdown of 2G and 3G with Vietnam being the most recent country to do so. In other cases, regulation is being driven by security concerns. We’ve seen several markets set deadlines for the removal of hardware from Chinese vendors such as Huawei and ZTE. Germany has recently joined in here, but countries including the U.K., Sweden, Japan and Australia have similar restrictions.
Filling the gap
Telecom networks are on the right path, reducing the amount of equipment, improving performance and reducing their environmental and operational footprint. However, efficiently and sustainably transitioning to this point can be a challenge. OEMs are working at pace to build more powerful and more efficient tech, but service providers often need to move more gradually. Network evolution is a costly and complicated process, so it’s often necessary to do it in phases. Common phasing scenarios often require operators to retire networks in one location while maintaining them in another, necessitating the procurement or repair of equipment that is no longer supported.
This network maintenance can be a challenge if specific hardware is no longer sold or supported. While OEMs continue to push ahead and provide the answers for upgrading, service providers need to have one eye on what’s ahead and the other on what’s behind. When it comes to procuring, maintaining and retiring older hardware from their networks they will need to go outside of their usual OEM relationships. This is where the circular economy has the answers.
Where are service providers with circularity already?
We’re seeing this happen gradually, but during this transition where a large amount of hardware is being removed or replaced from networks, its crucial service providers utilize circular principles now. This will ease the financial and environmental impact of retiring equipment. In this, service providers have several tools at their disposal.
While outdated or inefficient hardware must be removed from one part of a network, there’s still potential to repair or refurbish these items for use elsewhere. This is particularly beneficial when equipment is being retired due to a lack of OEM support. Extending the lifespan of hardware in this manner provides significant economic and environmental benefits, although it requires specialized skills to refit, test and reliably redeploy these assets. Currently, over half (60%) of service providers reuse around 10% of their decommissioned equipment within their networks.
As telecom networks progress at different rates globally, there’s often a demand for older equipment. Even modern equipment, like that from Huawei and ZTE, which needs to be removed due to security regulations, can find a market in regions where such restrictions don’t apply.
Selling decommissioned hardware allows companies to recoup some costs in an environmentally friendly manner, while also providing more affordable telecom equipment to developing markets. For instance, BT reports it has generated over £4M from recycling and selling decommissioned equipment. Additionally, some service providers reinvest the proceeds from these sales into purchasing second-hand equipment from the circular economy, creating a truly sustainable model. Notably, 78% of operators resell some of their decommissioned equipment, but exactly how much equipment they’re putting back into the circular economy varies greatly.
When there’s no market for reselling hardware, recycling becomes a viable option. This is particularly relevant for older hardware, which often contains valuable metals like gold and copper that can be extracted and sold. Consequently, older equipment, which might be harder to resell, can be more valuable when recycled than modern hardware. Over the next decade, telcos could recover up to 800,000 metric tonnes of copper, valued at over $7 billion at current prices. Currently, four out of five operators recycle equipment to some extent.
As these practices gain traction, the industry can move towards a more sustainable future. Not only will networks continue to become more sustainable and efficient due to advances in equipment from OEMs, but thanks to the circular economy, the environmental impact of network upgrades and network maintenance will be significantly reduced.
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