Feature Article

September 12, 2014

Kika Puts Old Modems to New Use

On the face of it, selling old modems and other outdated telecommunications equipment does not sound like much of a business. Yet, there is a surprisingly robust need for older equipment.

One reason for using old equipment is price. While new equipment is rarely a bad thing, often its added cost premium is not worth the extra functionality. Anyone who watched the recent iPhone 6 announcement and was more interested in the deeply discounted iPhone 5s, understands that sometimes new features can be overkill.

Like in M2M, for instance.

“When deploying an M2M solution, the data usage is very small. So they really a lot of times only need 3G data, if even that. They’re using 5 MB per month. So obviously having access to LTE is great, but unnecessary,” pointed out Mark Savage, vice president of business development for Kika Enterprises, in a recent interview with MobilityTechzone at ITEXPO Las Vegas.

Older modems, in such cases, make more sense given the demands. And since wholesalers such as Kika can offer between 30 and 80 percent discount, used can be good!

There also is the issue of hardware refresh that moves too quickly.

“Sometimes, as they make enhancements to the hardware, the solution that the customer started to build doesn’t work with the new firmware of the new technology,” noted Savage.

A business might develop a solution, run its beta test, and start to roll out the solution in the field only to discover that the new version of the modem that the carrier has put out does not have firmware that is completely compatible with the developed solution.

“So we’ll get a call from a customer looking for an older device, but they need 1000 pieces for their deployment. So that’s the market that we serve,” noted Savage. “By going out and buying all that used technology and secondary market hardware, we stock it. So we keep it for those cases when a customer needs a USB modem for the Verizon network that works on Linux, for instance.”

He said that most companies don’t know what to do with used electronics, so Kika partners with a lot of recyclers, large businesses and resellers to grab old and used electronics that may be past its prime but still has a lot of life left in it.

“We fill a nice gap in the industry,” he noted.

Edited by Stefania Viscusi

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