I was recently asked by a Tier 1 client in North America if Subex can use our network discovery technology to retrieve information from D4 channel banks. I honestly had not crossed paths with these relics of the voice network since my days doing central office engineering in the late 80’s. So you may be wondering, in a day-and-age when the buzz is about SDN/NFV, IoT and everything in the “Cloud”, why is someone worried about the humble channel bank?
As it turns out, there’s plenty to worry about. End-of-life technology can be a significant Opex drain. Operators incur costs for energy (power, HVAC), maintenance and real estate to keep such equipment in place. Compounding the problem is that much of this old equipment typically sits racked, stacked and powered… and idle (no traffic). Channel banks are just one example. Arguably, the entire fixed-line TDM network is retirement-age (I’m talking about SONET/SDH DACs and ADMs, voice switches, local loop equipment, etc.) and needs to yield to IP/MPLS and VoIP.
In a previous blog post, I wrote about what operators need to consider when planning a transformation from legacy technologies to future state. For this post, I will stay grounded in the present and focus on this question: What strategies can operators employ to reduce their Opex and Capex burdens when operating a legacy network? For starters:
- Use network discovery techniques to determine the operational status of your actively deployed network assets.
- For all unutilized assets, apply a deliberate strategy to disposition everything. Too often, because operators don’t have adequate visibility to operational status and utilization of assets in the legacy network, they default to what I call a “rust-in-place” strategy. Since they lack the visibility, they ignore the problem. Equipment sits idle or underutilized and costs add up. My suggestion is to proceed with purpose—if an asset is carrying adequate revenue-producing traffic, fine. If not, do something about it!
For assets with reuse potential, then the options include:
- Harvest and reuse elsewhere in the network. Benefit: Avoid Capex for new purchases.
- Perform grooms to more densely pack some assets and free up others for reuse or end-of-life monetization.
- Allocate as spare. Benefits: Reduced maintenance costs when spares are optimized in terms of count and location. Customer experience is improved and exposure to SLA penalties is reduced when spares are well managed.
If there is no reuse potential, then consider:
- Reselling on the secondary market if there is still industry demand for the asset.
- If not, then recover and sell for salvage value.
- In both cases, remember that the NPV of averted monthly energy and real estate costs may actually exceed any direct cash received when the asset is sold or salvaged.
- Don’t overlook other possible financial benefits from disposing unneeded assets such as tax write-offs and reduced insurance premiums.
Most importantly, seek an asset management and logistics partner who can help you squeeze the most value from legacy assets. Elements of a legacy network cost reduction program include:
- Automated audits via network discovery
- Asset evaluation and disposition recommendations
- Capacity utilization trending and related analytics
- Asset tracking
- Turnkey asset recovery services
- Resale valuation and brokerage services
- Eco-friendly recycling
- Analytics for sparing level optimization
- Spares management
- Warehousing and related logistics services
- Warranty and annual maintenance contract management
- Test, repair and engineering services
Subex provides industry-leading asset management solutions and services. With our forward and reverse logistics partners around the globe, we can help you to establish a turnkey and highly effective legacy network cost reduction program.