85% of telcos had projects delayed by supply chain issues

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Research by TXO reveals that 85 percent of operators have experienced project timeline disruptions due to supply chain issues.

The research highlights sourcing new equipment from original equipment manufacturers (OEMs) as a major problem.

Over a third of operators (34%) have been delayed by six months or more. All operators surveyed reported supply chain issues affecting their business.

Over three-quarters (78%) of operators had to wait over three months while 41 percent waited over six months for critical hardware.

But it’s not just delays that are causing telcos headaches. 54 percent experienced an 11-30 percent cost increase on all network hardware from OEMs, making sourcing new equipment increasingly challenging.

The research surveyed over 90 global mobile and fixed-line operators and network integrators. 

58 percent of operators and 47 percent of systems integrators say their new business pipeline has been impacted. When it comes to customer satisfaction, 42 percent of operators and 79 percent of systems integrators report that it’s been compromised.

Supply chain disruptions have impacted revenue for 39 percent of operators and 58 percent of systems integrators, and impacted network performance for 45 percent of operators and 47 percent of systems integrators.

Darren Pearce, Group CEO of TXO, commented:

“The supply chain crisis is having a significant impact on global telecom operators, from delays in sourcing new equipment to cost increases. It’s clear this is damaging new business pipelines, revenue, network performance and customer satisfaction.

At the same time, operators are under pressure to extend connectivity and meet government targets for 5G and fibre network deployments.

While many are wary about scaling up their equipment rollouts due to the huge supply chain delays and costs, the upcoming government deadlines are putting additional pressure on them to find alternative solutions.”

As supply chain issues continue to disrupt operators, more of them are aware of the circular economy and its benefits. The research shows that 38 percent of operators are now actively sourcing from the secondary market/using refurbished equipment to solve supply chain challenges.

Around one-third (32%) say they don’t currently use the circular economy but would consider using it to solve supply chain disruptions. Equipment costs increase 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.

“By joining the circular economy and buying pre-owned equipment instead of new, operators can avoid the long wait for new equipment, save money and accelerate deployment in line with government targets,” added Pearce.

“This not only helps safeguard their business model and revenue stream as they manage the supply chain crisis, but it will also significantly reduce their carbon footprint and support their sustainability goals.”

Operators are also taking other measures to overcome supply chain challenges, such as increasing their stock levels (70%), expanding the network of suppliers they source from (61%), repairing and reusing more of their existing equipment (35%), and redesigning their technology/network architecture to reduce reliance on OEMs (38%).

You can find out more in TXO’s whitepaper here.

(Photo by Erik Mclean on Unsplash)

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