85% of operators say they had project timelines disrupted recently due to supply chain issues, with just over a third (34%) saying they’ve been delayed by six months or more, according to research conducted by TXO, the leading provider of critical telecom network hardware and asset management services.
With all operators surveyed saying their business has been impacted by supply chain issues, sourcing new equipment from original equipment manufacturers (OEMs) is a big part of this problem. Over three quarters (78%) of operators had to wait over three months and 41% waited over six months for critical hardware. Furthermore, 54% experienced an 11-30% cost increase on all network hardware from OEMs, making sourcing new equipment increasingly challenging.
Surveying over 90 global mobile and fixed line operators, and network integrators, the research shows the significant consequence of the supply chain chaos:
58% of operators and 47% of systems integrators say their new business pipeline has been impacted
42% of operators and 79% of systems integrators report that customer satisfaction has been compromised
39% of operators and 58% of systems integrators say it’s affected revenue
45% of operators and 47% of systems integrators say that it’s impacted network performance
Circular economy emerging as a solution
As supply chain issues continue to disrupt operators, more and more of them are aware of the circular economy (recycling, refurbishing, reusing and repairing equipment) and its benefits. 38% of operators say they are now actively sourcing from the secondary market/using refurbished equipment to solve supply chain challenges. Around a third (32%) say they don’t currently use the circular economy but would consider using it to solve supply chain disruptions.
Cost increase on equipment is highlighted as a key fallout of the supply chain crisis, and the majority (82%) of operators say they would consider buying refurbished network equipment to reduce costs.
58% of operators have already begun to reuse, resell and/or recycle excess/legacy telecom network equipment within their business. However, 23% say they are aware of excess/legacy telecom network equipment in their company that could support the circular economy but haven’t done anything with it yet.
When asked about what the main factors are for selecting new equipment suppliers, only 55% of operators cite ‘sustainability considerations’ as important. Whereas the majority (92%) say ‘cost’, 83% state ‘lead times’ and 58% say ‘company reputation’ is important. So, when a supplier can tick all four boxes, it’s an easier decision for operators. Although, while sustainability on its own isn’t a high consideration for buying decisions, the research indicates that it is increasing in importance.
Operators are also taking other measures to overcome supply chain challenges with:
70% increasing their stock levels
61% expanding the network of suppliers they source from
35% repairing and reusing more of their existing equipment
38% redesigning their technology /network architecture to reduce reliance on OEMs