Critical Raw Materials in optical telecommunication, introducing strategies for a resilient supply chain

Abstract

This study addresses a research gap in understanding how telecommunications companies can become more resilient by examining organisation level flows of critical raw materials (CRMs) in optical transport network (OTN) equipment. While previous research has quantified CRM stocks and flows in consumer electronics, the material dynamic behaviour of fibre optical equipment, specifically amplifiers and transponders remain under investigated. In particular, there is little quantitative and time dependent analysis of how CRMs embedded in fibre optical equipment circulate within the network of KPN.

This gap raises the following research question: What strategies can KPN implement in their operations to secure a resilient supply chain of critical raw materials embedded in optical transport network equipment?

To answer this question, a dynamic material flow analysis (dMFA) was developed for amplifiers and transponder deployed by KPN in the Netherlands over the period 2024–2045. First, internal desk research and expert consultation with optical network architects provided insight into equipment lifespans, failures, and the build-up of the network. Next, data from original equipment manufacturers (OEMs) and similar case studies quantified the CRM contents, leading to mapping of 16 CRMs: erbium, bismuth, thulium, germanium, praseodymium, silicon, antimony, boron, magnesium, manganese, nickel, palladium, ruthenium, silicon, strontium, tantalum, titanium, tungsten and yttrium. These inputs enabled the integration of a stockfidriven dMFA model projecting annual primary CRM inflows, stocks, and outflows. Four scenarios were modelled to address uncertainty: (1) businessfiasfiusual, (2) AI driven
growth, (3) a circular and sustainable economy and (4) technology & innovation representing a hybrid scenario combining moderate growth with circular interventions. A Monte Carlo sensitivity analysis assessed the extended uncertainty for stock accumulation and the impact of the selected parameters.

Results indicate that, under high growth scenarios, demand for key CRMs in amplifiers and transponder printed circuit boards rises increasingly fast, with a stable period between 2033 and 2038 due to capacity doubling and a continued exponential growth after 2038 resulting in a demand increase between factor 9 and 14 for the low and high scenario respectively. Possible leading to issues in the future as competing sectors such as solar photovoltaics, wind turbines and electrolysers are also expected to grow rapidly in the EU and globally. With primary use rates indicating that higher recycling yields still cannot account for the demand increase periods. Whereas experimentation of low, medium and configurations
of circular economy strategies have shown that individual strategies cannot reduce more than 30% of primary material demand in 2045. A combined strategy however, resulted in higher savings, while expected savings amount to higher reductions due to the dampening of lifetime extension on recycling and reusing practices. Combining literature surrounding the feasibility of resilience strategies on a firm level with the temporal and magnitude of the strategies led to managerial implications for KPN. With proposed short term (2025 - 2033) strategies focusing on reduction and lifetime extending strategies, whereas medium term (2033 - 2038) strategies emphasize recycling and reusing of equipment. With long term (2038 - onwards) strategies aimed at reducing material needs. However, the study also shows the high dependency of KPN on supplier product design choices and the limited control on upstream
influence.

In order to further enhance the study, it is firstly recommended to investigated to conduct a more thorough stakeholder analysis to get a better understanding of the power and interests of the relevant players in the value chain. In addition to an extension of the economic importance criteria tailored to telecom companies and an investigation on methods to integrate higher data efficiency across the optical transport network. With a final recommended study surrounding the upscaling of the equipment to magnify the impact of the fibre optic sector on CRM demand beyond the Netherlands.