Telecom Industry on Track to a Circular Economy

In early June, Nexign CEO Igor Gorkov spoke at one of the Saint Petersburg International Economic Forum sessions, where he discussed with other participants the prospects for transitioning to a circular economy. In this blog post Mr Gorkov is reflecting on how telecommunications vendors can maintain the industry’s course towards sustainable development.


Until recently, production had followed the linear ‘take–make–consume–dispose’ model, yet today this approach is obviously failing. The amount of waste we produce challenges not only the prospects for economic growth but also the existence of the ecosystem itself. This is the reason why the concept of sustainable development, based on the idea that meeting the needs of the current generation must not harm future generations, is becoming more and more widespread. It is sustainable development principles that the circular (or cyclic) economy model is based on. It implies the use of renewable resources and low waste production.

Information and communication technologies are a significant element of the circular economy.

IT and telecommunications companies are pioneers in implementing innovations, as they establish new kinds of enterprises and create jobs. All of you are surely familiar with the sharing economy: car rental services, apartment rentals for travelers, etc. Another kind of service that is currently less developed but is gathering pace is the Internet of things — from smart houses to smart cities. These are all small and medium business scenarios where introduction of the circular economy principles has tapped new sources of income. Obviously, it is IT solutions — software, data centers and telecom services — that have catalysed the creation of those services. 

Yet technologies do not just solve environmental pollution problems — they create new ones. The best client service requires more advanced software that, in turn, requires more computer processing power, therefore resulting in increased energy consumption. To give you an example, new 5G stations will consume 2.5–3.5 times more energy than existing 4G stations, according to TM Forum.  Another aspect of this progress is the risks related to the intrusion of IT technologies into users’ lives.  In order to protect personal data, more computer processing power is required, and even more energy is consumed.  As a result, providers and developers face the challenge of creating safe, energy-efficient solutions that make it possible to spare hardware capacities.

To ensure the successful functioning of the circular economy, it is necessary to consider all factors and risks related to the digitalisation of the economy and society. Here is an example: Today electric cars are criticised for their contribution to increased demand for electricity. This demand can be quickly satisfied only by generating ‘dirty’ energy. That certainly does not suit responsible consumers' needs, as they want to be sure that every link of the item’s production chain is green. 

It is telecom companies and vendors that could solve the problem by creating marketplaces and automated brokers. With such a business model, an end-user will be able to choose responsible suppliers of goods and service providers, while telecom companies will profit by tapping new sources of income.

Providers and vendors have a great wealth of knowledge and technologies that can speed up the transition to the circular economy. 5G innovations, Big Data analytics, artificial intelligence, the Internet of things and cloud-based computing enable production process optimisation by boosting the efficiency of resource usage.

And I believe that the secret to successfully transitioning to the digital economy is the rational use of resources. It is conscious consumption, including in IT and telecommunications, that will allow humanity to avoid retribution for progress and lay ground for a new mindset. Yet for a quantum leap to take place,  ‘critical mass’ is needed: it is essential to have more successful examples of implementing innovations that go in line with the principles of responsible consumption. The way I see it, there is no other way to boost the economy.