Vendor’s indecision is final
Sales of networking equipment to telcos will fall this year according to the Telecom Capex March 2023 release from researcher The Dell’Oro Group. The high-single digit growth in 2021 has translated into a slump in sales of Backhaul, Optical Transport, Mobile Core and Radio Access Network (pictured) equipment. The bottom line is that fewer purchases of routers and switches are being rubber stamped at Bought Ledger by the Bob Cratchett’s of mobile telecoms firms. That is only half the story, say many telecom suppliers.
Though spending on telecoms equipment, by volume, went into decline in 2023, the time what purchasers make suppliers jump through hoops has lengthened, according to UK’s value added resellers (VARs) consulted by Mobile Europe. This means the telecom supply chain, a supposedly crucial but delicate ecosystem of start-ups, is being snuffed out by the suffocating indecision of purchasers at UK telcos.
Some in the telecom supply chain say the Dell’Oro report does not capture the agony of offering creative solutions to the problems of Mobile Operators. Feedback given to Mobile Europe suggests that although they pay lip service to speed, agility and innovation, many purchasing managers are the complete opposite of their job description. This is the hidden scandal of telecoms purchasing. The procurement at big telcos takes forever to make up their minds, they treat inventors like dirt and only feel safe buying from companies that are reassuringly expensive.
The Telecom Capex report says the slow aggregate telco equipment trends are a consequence partly of factors like currency variations and the improved capex outlook in China. The report took its data from the world’s top-50 carriers who collectively generated combined annual revenue and investments of some $1.7tn over the past 12 months. These carriers account for about 80% of worldwide telecoms capex and revenue.
However, one supplier called for a more granular detail is needed for a report on local conditions, particularly in the Middle East and Africa. Each regional has its own supply chain ecosystem which is supposed to be fostering the creative start ups that will revitalise the mobile telecoms sector. One service provider, which created a system that would instantly slash a telco’s power usage, described how their contact at the telco seemed to use their position to make them jump through hoops, by organising meeting after meeting.
It’s not the size of the CAPEX that matters, it’s the qualities of the person who is expending it, according to one frustrated suppler, it’s better to have one small project in hand, than a huge mythical beast that’s never going to happen in real life. The bottom line is that the lack of empathy for creatives in the supply chain is killing the very ’innovation’ that many telco executives pretend to be passionate about.