The telecoms sector is ad­mirable in its pursuit of sustainability, but this is at least in part motivated by the sheer cost of constantly re­placing network equipment and devices as they slide into obso­lescence.

While manufacturers are in­creasingly focused on extending the lifespan of equipment, this does not negate the issue of recy­cling outdated gear.

Given that the majority of car­bon emissions associated with technology are produced during the manufacturing process, re­furbishing physical technology – whether consumer devices or network equipment – is one of the most effective ways for tech companies to reduce their envi­ronmental impact.

This drive to achieve a more circular economy has led to a flourishing international market for refurbished network equip­ment.

Operators are keen to ensure that their outdated equipment does not represent a sunk cost, so there are both financial and green incentives to pursue this strategy.

According to Julia Evans of TXO, a sustainability-focused firm which refurbishes and re­sells network equipment, explains that the company has developed a ‘carbon calculator’ to outline the quantifiable carbon savings avail­able to clients who purchase its equipment as opposed to newly manufactured products.

Historically, it’s been seen as a financial drain to take a more environmental stance, whereas this is cost positive: operators are making savings by buying from the circular economy, all equipment is tested and certified functional.

“The demand is increasing”, explains Evans, noting that larg­er telcos are recouping money by selling functional equipment that they no longer use. This is typi­cally acquired by alternative net­work providers – going via a re­seller is easier, quicker, and a lot cheaper – but larger companies are starting to buy refurbished stock as well.

“It really is creating the circu­lar economy, and it’s getting big­ger and bigger”, says Evans.

TXO is able to both refurbish and repair equipment effective­ly – and when products are at the end of their lifespan and there’s no market for them, they can be recycled. Evans explains that network cards contain gold, sil­ver and palladium that can all be recovered and reused.

Emerging markets are unsur­prisingly a major buyer.

“A lot of our refurbished equip­ment goes into those regions whereby they’re a couple of net­works behind [more developed markets]”, explains Evans.

“We can provide whole net­works, in some cases, there are big players upgrading, and this [equipment] would just go to waste if we weren’t here to find these emerging markets and sell to them.”

“It really is an interesting mar­ket to be in, because you’ve got these big players that are firing forward with all this new tech­nology and upgrading all their networks, then you’ve got these people coming behind, we’re facil­itating that – and we can actually develop networks with people. We can build cabinets, and deliv­er whole units, built to customer specifications.”

Recycling equipment and re­sources makes business sense – Evans gives the example of Deutsche Telekom’s initiative to recycle copper from older infra­structure, which provides enough money that the network essential­ly pays for its own upgrade.

“It’s financial, but it’s also mas­sively positive sustainability mes­sages as well that come from it”, says Evans.

“We’re trying to reduce the waste in total and trying to make sure we get absolute maximum value for every piece of equip­ment that’s put on the market, not just in terms of financial but also in terms of those natural resources that are used up when manufacturing it.”

This message is not just reso­nating in the network equipment space – it’s coming through loud and clear on the device side of things, notes IDC analyst Fran­cisco Geronimo.

“We used to see trading pro­grammes, collecting those devic­es that would be refurbished and sold in emerging markets – Afri­ca, Asia – and that’s not the case anymore. There’s still demand in those markets, because they need cheaper devices that they cannot afford. The premium segments, if we look into markets like Ni­geria, the majority of the market is below $200 so if someone wants to have a premium device, they tend to buy refurbished because it’s good value for money, they can have the brands they aspire to have.”

“People are learning that a re­furbished device is not a device with a potential risk of breaking later on or stopping working – it’s a device that comes with a war­ranty, because that’s mandatory at least in the European Union, and it’s good value for money be­cause it provides the specs they need.”

At the lower price point, the price gap can be as much as 50% depending on the age of the refur­bished model.

This trend is happening across multiple industries, but when consumers buy electronics that have been refurbished through proper channels, they know they have been tested and certified.

Consumers in regions like Eu­rope and the US are now seeing that value, and supply for refur­bished devices is not keeping up with demand.

“It’s driven by consumers making their first choice as re­furbished device, and not just a second choice or third choice if they could not afford a device, as it was in the past. Now, they are considering a refurbished before buying a new one.”

Geronimo notes that Samsung is now guaranteeing at least 50% of the residual value of any de­vice when users upgrade to anoth­er Samsung device – these kinds of programmes will significantly expand the product lifecycle.

Until around 2018, the smart­phone market was growing steadily as penetration rates were low, but when these hit 90%, man­ufacturers realised they would sell fewer units and needed to in­crease the average selling price (ASP).

This required premium specs – but it was only a few years before devices were essentially so good there was no need to upgrade. Memory, storage, display, proces­sors were all up to standard, with the significant changes delivered via software updates.

Consumers now hold on to de­vices for longer – easily five years – and within the European Union it’s now mandatory for devices to be repairable. Previously, it was typically cheaper to upgrade than repair a broken device – but when people spend a significant amount of money on a device, they consider it an investment, and devices purchased three or four years ago can still cope with requirements today.

However, Geronimo considers AI as the next big trend that will drive physical device upgrades – it is likely to be a significant enough change that vendors such as Google and Apple will drop support for older devices after five years or so.

“What we see in terms of the total journey is everyone focus­ing on extending the lifespan of the device, to be refurbished, to be repaired, so device will be able to have a second or even third life in most cases, especially on pre­mium devices”, says Geronimo.

There are companies that specialise in recovering mate­rials from devices at the end of their lifespan and then recycling them, but Geronimo notes that only around 22% of all consumer electronics – not just phones –are currently recycled.

IDC tracks statistics for trad­ing refurbished devices via offi­cial channels – i.e. discounting peer-to-peer transactions, such as selling an old device on eBay. Globally in 2024, the refurbished smartphone market was worth US$75 billion, equating to 208 million refurbished devices be­ing sold.

Geronimo estimates that this market will increase to US$81 bil­lion this year, around 5% growth in units sold. This growth trend is expected to continue across the next five years – but interesting­ly, value will increase at a higher rate (around 7%) as people buy more premium devices.

“The margin (operators) make on the device is not that high – where they make the money is in the airtime and data, so it doesn’t really matter how they get the customers in their shops, either through a refurbished device or through a new phone.”

He notes that operators are expanding their install base by promoting refurbished devices, as it helps them retain customers who might buy their initial device then trade it in a few years later.

In particular, the install base for high-end brands can only in­crease this way: “(Apple) will nev­er launch a low-end iPhone, so the only way to expand installed base is by selling refurbished, selling the version minus one, two or three at a lower price point, be­cause those users may not be able to spend $1,000 on a on an iPhone, but they may be able to spend $300-400 and then subscribe to services, which is what is driving Apple’s business at the moment.”

Indeed, cost is a key factor shifting consumer attitudes – as device prices escalate and cost of living crises bite around the world, saving money on refur­bished devices is increasingly viewed as a pragmatic way of ‘beating the system’ rather than sacrificing buying new for the good of the environment.