Telecom Asset Management: Increasing Network Efficiency with pre-Owned Telecom Equipment
Updated: Jun 5, 2021
When telco sales managers think of new revenues streams or finance directors about cost savings, pre-owned telecommunications equipment is not the first thing that comes to their mind. Indeed they probably don’t even consider it as a viable option. Equipment after all is acquired by procurement and managed by network people who have their development plans, established relations to OEMs and the budget. They will probably also get told by the network people not to tinker with things that work well and are at the same time essential to the business. This will usually stop any further discussion – after all, who is willing to be responsible for that network outage because of the old refurbished box that was put into the network instead of shiny new one.
Telecom is an asset heavy business and network operators, especially integrated telecoms are operating billions of Dollars’ worth of network equipment that needs constant maintenance and attention. Global telecommunications equipment market is worth more than 500 Billion USD per annum (including mobile devices) and has a healthy 6-7% annual growth. If only traditional telecom business would have growth rates like this, right? So while limiting business travel and pressing current suppliers for additional discounts as well as managers for overall cost-effectiveness, telecom managers might want to look into telecom equipment asset management in their companies. It just might be one of the single largest sources of savings as well as a new revenue stream that they did not yet tap into.
According to our experience we have yet to meet a telco that has installed a systematic telecommunications equipment asset management in terms of multi-department end-to-end process. Off course telecoms have the tools where active telecommunications network inventory is listed and monitored. Procurement will squeeze the OEMs while acquiring new assets, and network will operate them and plan for new ones based on sales plans and overall company strategy. And sales will do its utmost best to fill the network. But is the whole process really optimized? Does it include inter-departmental cooperation? Is there a list of approved and on-boarded pre-owned equipment vendors as it is with OEMs? Does it include looking for alternatives to upgrades or maintenance parts among pre-owned equipment vendors as an integral part of the process? Do procurement and network have the information on what is available on the market as a cheaper but basically equal option to the OEMs equipment? Is the company by default always buying just new equipment and always from the same OEMs?
There are many reasons that OEMs are having high growth rates. There are 5G networks roll-outs, cloud services and overall growth of capacity demand and more. But there are also other OEM activities that affect operators’ bottom line directly. OEMs will repeatedly discontinue their products and push ongoing upgrades of its network elements only for them to be usually only marginally effective or might not do much to extend the useful life of the existing systems.
This is where pre-owned equipment vendors can bring real value and savings to the operators. It is by helping them extend the life cycle of existing network equipment that they can provide substantial long term savings. These savings can exceed 50% when compared to traditional OEMs. There is another big advantage to pre-owned equipment when compared to a new one – it is readily available as opposed to a new one, where delivery times can be measured in months. Like OEMs, pre-owned equipment vendors will also bring expertise and this will be usually broader than OEMs as the pre-owned equipment vendors carry many brands of equipment.
Relations with OEMs are usually strategic and long term. There is no reason why this would not be the case with pre-owned equipment vendors. They carry equipment from the leading OEMs, they provide maintenance and warranty, managed services as well as consultations. They can even be a source of new revenues for the operator. They will evaluate used telecommunications equipment, provide feedback about it and if the equipment is marketable they will gladly take it for consignment or even offer cash payment for it. At the end of the day, if the equipment cannot be sold-off they will dispose of it in ecological way as well.
If you would like to learn more how Telecom Asset Management services can help you reduce CAPEX and OPEX and increase your business’ efficiency please do not hesitate to contact us.