The current onslaught of network upgrades has been a financial boon for the infrastructure market as the latest technology has required most operators to invest heavily in new equipment. However, one aspect of this building surge that has yet to garner much attention is what carriers and equipment vendors are going to do with the infrastructure that is being replaced.
A new report from PricewaterhouseCoopers, “Clearing the Way: The 2012 Outlook for Telecom Network Decommissioning,” found that this phase of decommissioning is set to kick off a wave of activity over the next five years as 90% of wireline and 60% of wireless carriers expect to tear out old equipment.
“The rollout of new communications technologies means that some older networks are becoming outdated and underutilized, and therefore more expensive to operate,” explained Dan Hays, U.S. wireless advisory leader at PwC, in the report.
Among wireless operators, the report noted that just 48% of those surveyed said they have strategies and plans in place to deal with legacy equipment. This compares with the 73% of wireline operators surveyed.
The report found that 75% of telecom operators plan to physically remove equipment from their network with plans to sell or dispose of that legacy equipment, while 25% said they expect to turn down the older equipment, but keep it in place.
Hays noted that this decision will be critical for operators as they balance the costs involved with such operations with their environmental responsibility.
“They must analyze the costs of asset removal, transportation, processing and storage, against the potential benefits of tax savings, reuse, resale and recycling, in order to maximize the overall proceeds of network decommissioning,” Hays said.
Overall, telecom operators said they expect the decommissioning process to take between three to five years, or more, to complete. The “or more” part could be impacted by the fact that most of the equipment expected to be torn out has not been adequately accounted for. The PwC report noted that half of wireline operators and a third of wireless carriers said less than 50% of their assets were actually “catalogued and managed.”
“Network decommissioning represents a great challenge for telecom service providers worldwide,” added Hays. “Both wireline and wireless operators share similar concerns and risks focused on costs and the potential impact on ongoing service. Strong planning and execution, including accounting for potential offsets to costs, will be critical to success.”
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