A circular economy plan is more important than ever for the telecoms sector

This post is by Dana Haidan, chief sustainability officer at Virgin Media O2. It is part of a series of blogs exploring why different businesses and sectors have been calling for the government to release its delayed Circular Economy Growth Plan

The government’s proposed Circular Economy Growth Plan represents one of the most significant opportunities in a generation to align economic growth, resource security and environmental progress. For telecoms companies it could accelerate a transition that’s already underway.

Our sector is at a critical point. As consumer expectations continue to shift, and sustainability becomes an increasing priority, the traditional ‘buy, use, discard’ model is challenged. In its place, a more circular approach, focused on reuse, repair and refurbishment is gaining ground and emerging as a key driver of commercial success and long term resilience.

It’s a huge commercial opportunity
One of the most compelling reasons for embracing reuse in this industry is the scale of the commercial opportunity, across phones, network equipment, core IT and equipment installed at a customer’s location (known as customer premise equipment or CPE). The global market for circular devices and services, including refurbished phones and repair, is projected to exceed $150 billion by 2027 according to the GSMA, the trade association representing the mobile communications industry. This represents a more sustainable growth opportunity for mobile operators and manufacturers. Embracing reuse futureproofs the industry, as people hold onto devices longer and the pace of device innovation stabilises, circular business practices will prove crucial to generate ongoing value from existing products.

Consumers want more sustainability
Consumer demand is another major factor driving the shift. Sustainability is no longer a niche concern. For many, it’s a key factor when purchasing a mobile device. Many users are also increasingly drawn to refurbished phones to save money within a difficult economic climate. So we can continue to meet consumer demand while strengthening our customer trust by providing access to high quality reused tech and devices. The demand for such devices fosters growing industries in the UK. We have partners who support us to refurbish, repair, reuse and recycle devices, that are employing thousands of people across the UK. These jobs wouldn’t exist if we didn’t focus on these areas.

From an operational perspective, reuse also improves resource efficiency and reduces costs. The GSMA report estimates there are currently five to ten billion unused mobile phones sitting in homes worldwide, containing valuable materials such as gold, copper and palladium worth around $20 billion. By recovering and reusing these resources, the industry can reduce its reliance on raw material extraction and volatile global supply chains. This not only lowers costs but also strengthens our resilience in the face of geopolitical and economic uncertainty.

A circular economy improves business performance
The environmental benefits of prioritising a circular economy strategy are equally significant and are increasingly linked to business performance. Refurbishing a device produces 80–90 per cent fewer carbon emissions than manufacturing a new one, while also helping to tackle the growing problem of e-waste.

The Circular Economy Growth Plan will support our sector to embrace the change in consumer attitudes and support the UK’s critical material, employment and environmental targets. We believe that it will complement the work that we already do to build a longer life for hardware. It remains central to our strategy, and we have an ambition to double the number of people using both O2 Recycle and buying refurbished devices. A national narrative that shows the benefits of the circular economy will support our Device Reuse City Programme which we want to roll out in 30 cities by 2030; and our Community Calling Programme which has rehomed over 32,000 devices.

We want a bold plan which sends a clear signal that the UK intends to lead the industries of the future and that the circular economy unlocks economic, social and environmental benefits for our industry and the country. We look forward to working with the government to deliver it.

Photo by max bushuev on Unsplash