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Up to 50% of Operators' Network Assets Are Unaccounted for
Source: www.totaltele.com
Source Date: Wednesday, October 08, 2014
Focus: Electronic and Mobile Government, ICT for MDGs, Citizen Engagement, Internet Governance
Created: Oct 15, 2014

Asset management provider TXO recovers 100,000 unused items of telecom equipment per month.

Telecoms operators are sitting on millions of pounds worth of idle network equipment that can be reallocated, sold on, or recycled.

That is the claim made by telco asset management specialist TXO Systems on Wednesday, which said that 30%-50% of an operator's assets are not properly catalogued.

"It's always been the elephant in the room, but while the cash was there, the elephant was ignored," explained Tom Parker, vice president of business development at TXO.

Now that margins are being squeezed, cash-strapped operators are looking more closely at optimising their cost base, he explained to Total Telecom, which includes getting to grips with their equipment inventories.

TXO said that so far this year it has helped operators worldwide raise more than £10 million from the sale of unused parts to other operators and kit makers, and Parker expects business to double over the next three years.

There are a number of causes of excess inventory. In some cases operators do not properly catalogue their assets and lose track of them, while in others engineers leave equipment in vans or in warehouses and it is forgotten about. Sometimes operators upgrade their networks and neglect to decommission equipment that is no longer needed, while mergers also generate excess inventory that often remains unaccounted for.

As a problem, it does "not fall within the vision of C-level management. And the lower level [management], whose job it is to deal with it doesn't have the ability to make a final decision about it," said Parker. "We take it up to C-level."

At one U.K. fixed-line provider, which Parker declined to name, TXO identified and recovered around 150,000 unused parts over a three-year period.

"Of the first 30,000 [parts recovered], they put 2,000 – worth about £1 million – back into the network," said Parker.

Some of the gear that TXO recovers is obsolete and only fit for recycling – which TXO also does – but the majority of it is not just serviceable but in some cases right up to date.

"We saw a huge amount of 2G; now we're seeing more 3G, and even some 4G," Parker said.

The buyers are often telcos looking for spare parts that will help them sweat their existing network assets, Parker explained.
"There's an assumption that emerging market operators want it, but the reality is the growth of Chinese OEMs means that they've got shiny new equipment. More often the kit we sell goes to developed markets, to operators who want to sweat their assets," he said.

"What could be excess equipment in one telco could be used by another to extend the life of their network."

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