The circular economy in telecoms: How telcos can approach circularity
With the growing importance of sustainability, telcos are looking into ways to reduce their e-waste. Transitioning into a circular economy is one of the key ways in which telcos can do this. In this article, we explore what telcos are doing within the circular economy sphere and what the challenges are.
What is meant by scope 1, 2 and 3 emissions?
Telcos, along with the rest of the industry, are exploring ways to reduce their Scope 1, 2 and 3 emissions to meet their net zero targets.
Scope 1 refers to direct emissions that arise from company vehicles, for example, those used to install equipment or perform maintenance on network infrastructure. Scope 2 emissions arise from the electricity telcos purchase to run their networks. Scope 1 and 2 emissions make up less than 20% of a telcos’ footprint, and are relatively easy for telcos to report on thanks to the established methodologies. However, Scope 3 emissions are responsible for the majority of a telcos’ emissions and come from both upstream and downstream supply chains. One of the ways in which telcos can minimise hefty Scope 3 emissions is through the shift to a circular economy, which can help decrease e-waste and the associated emissions, while also increasing the lifecycle of products. Ultimately, the circular economy seeks to reuse or regenerate equipment, focusing on minimising waste and the depletion of resources.
Where does the circular economy sit within telcos sustainability efforts?
Large volumes of telecoms equipment, from consumer devices to network equipment, turn into electronic waste every year. It is therefore no surprise that telcos have begun focusing on circularity to help minimise this waste. The 2021 report published by The World Economic Forum stated that of the 57.4 million tonnes of e-waste generated in 2021, only 20% had been recycled. With all the carbon embedded within this equipment – from the manufacturing, distribution, and decommissioning – this gives rise to an enormous amount of Scope 3 carbon emissions that could be avoided if this equipment was reused or regenerated.
What are telcos doing to improve circularity?
A number of telcos and their ecosystem partners have accelerated their efforts to move to more of a circular economy. Here are some examples of what telcos have been doing to progress the circularity agenda:
- BT and Cisco partner to recycle network kit: A recent partnership between BT and Cisco aims to recycle up to 99.9% of network equipment that is ripped out during upgrades. Cisco will process the networking kits to help BT reduce their e-waste.
- Telefónica develops MAIA: In an effort to promote the recycling of its network equipment and meet its goal of achieving zero waste by 2030, Telefónica has launched a platform called MAIA. MAIA enables its OpCos to display their equipment for sale within the platform, where operators and partners of Telefónica can select which products they would like to purchase. With this initiative, Telefónica has enabled around 73,000 pieces of equipment to be reused.
- Vodafone’s internal asset marketplace: Out of the 8,800 tonnes of e-waste generated by Vodafone in 2022, the operator managed to recycle approximately 95% of its e-waste, thanks to its internal asset marketplace. Vodafone’s internal asset marketplace is a B2B solution that allows the operator to repurpose and resell network equipment internally. As a result, Vodafone claims to have cut down its CO2 emissions by 2,500 tonnes, and additionally has saved €10.8m by avoiding purchasing brand new equipment.
- Telia’s pledge to shift to a circular strategy: In order to align with their goal of achieving “zero waste” by 2030, the Swedish operator has reused/recycled around 70% of its network waste in 2021. Moreover, 20% of its TV set-top boxes and routers were reused.
- Proximus circular economy solutions: The Belgian operator has established a distribution centre to refurbish consumer devices including modems, Wi-Fi boosters and smart phones on site. Between 2014-2021 it refurbished around 2.85 million devices, including 845k in 2021 alone. Read more about this use case, and others, in our telco net zero enablement use case directory.
What are some of the hurdles telcos face in the transition to a circular economy model?
Despite the clear benefits of circularity, there are some question marks around how telcos can leverage circularity into their business models, and what challenges they might face while doing so.
One of the complexities relates to the logistics of recycling equipment which requires collecting end of life products and shipping these to a repairing facility. Being able to do this efficiently requires greater collaboration and coordination among the players in the ecosystem. It is therefore important for telcos to be open to new partnerships to progress their circular economy efforts.
However, it is not simply the responsibility of telcos to drive a circular economy. While telcos will need to focus their procurement efforts on equipment that has longer lifespans, modular designs (for less wasteful upgrades) and incorporate reusable materials, vendors will need to provide products that meet this requirement. For vendors that are able to provide proof of these attributes, this will in turn make their propositions more appealing to their telco customers.
Overall, if telcos want to succeed in achieving their sustainability goals, tackling the generation of e-waste is crucial. This will require telcos to be open to forging new partnerships with different players in the ecosystem as well as setting ambitious goals for recycling, reusing and championing the use of longer lasting equipment. It is also incumbent on the vendors within the ecosystem to collaborate with telcos to make the circular economy possible.
Author: Ela Eren is a Consultant at STL Partners, specialising in sustainability and telco cloud.