The urgent need to make sure networks keep meeting increased demand during the Covid-19 crisis is boosting business for one provider of used telco and network equipment.
TXO Systems, a UK-headquartered company with operations in six countries including Australia, Brazil and France, said that its sales for March and April are up about 25% on January and February.
That’s mostly because network operators have, in some cases, needed to boost capacity quickly, and many also want to make sure they have enough equipment in stock to ride out any supply chain disruption. TXO’s CFO Simon Griffiths said that although telecoms equipment has been regarded as a priority in international shipping, along with food and medical supplies, operators are making sure they have enough spare stock to meet future demand in case of potential supply chain issues that could emerge.
Kieran Crawford, Sales Director, said, “They’ve got very good supply chains but on some occasions there are parts that are required where the manufacturing process has taken eight to 12 weeks. And an operator needs that part to go back into spares or even into the network now; they need it yesterday, a lot of the time. So they are now stepping away from their managed service contracts, only in part, to get those products into the network. We’re realistic, we’re never going to take over a full support contract from a major NEP, but when we can support on those individual parts we will try our damnedest to do so.”
5G and FTTx rollouts on hold
Perhaps not surprisingly, the need to ensure current demand is met is also being prioritised above ongoing new network rollout, in some cases. Crawford said the company had seen evidence that some European operators in particular are putting 5G rollouts on hold as they prioritise the resilience and integrity of networks. Some FTTx rollouts have also been paused in Africa, according to Crawford.
“That’s been across largely the core [transport] and fixed access market. However, we are starting to see more and more demand now from MNOs as well – and of course many of them also now have fixed line and cable assets as well as they widen their product portfolios,” Crawford said.
“I think what we will continue to see now is that customers deploy the allocated Covid-19 budgets to support the spares programmes. That means they need to work with partners that have product available, who are clear in terms of things like shipping lines and lead times. So relationships are becoming more and more important. And then finally, I think we’re going to see a significant uplift in the need for third party engineering support once lock-down restrictions loosen or relax.”
Another area of growth has been in sales of optical transceivers that TXO manufactures itself, for G-PON and FTTx rollouts.
Crawford: “We supply a wide range of operators globally now with brand new transceivers which are coded to specifications – from simple 1Gbps copper, all the way up to QSFP 28G and 100Gbps CFP optical tranceiver modules. And, again, part of why we’re seeing such an increase in demand is the need to reduce lead times. A number of big OEMs have found that the manufacturing proccess is being slowed down and significantly impacted. We are manufacturing product in two to four weeks, which is around 50% less than most major OEMs are working to.”
TXO Systems is a company that sells used telco and network equipment to telcos, systems integrators and large enterprises. Its million part inventory is largely made up of equipment that has come out of networks. It also manufactures some of its own optical tranceiver equipment, and it can provide maintenance and operations services, via a recent acquisition of services business MMX.
It acts as a large secondary market for telcos and their suppliers, often offering equipment at 60-90% reductions on the price of new kit. It also holds a collection of rare “legacy” items from now-extinct manufacturers that telcos still need to support. It claims it can supply to most parts of the world within 24-72 hours, leveraging its regional bases and logistical relationships.
TMN first profiled the company in 2014, although Griffiths and Crawford said the business had changed considerably since then.