Last week, we took a look at the rapidly growing warranty expenses of the U.S.-based semiconductor industry. In contrast, this week, we're taking a look at the warranty expenses of the U.S. telecommunications industry, which have decreased significantly over the past two decades.

These decreases are especially significant in three key sub-groups of the telecom industry, landline and mobile phone, broadcast and cable TV, and satellite and microwave. Warranty expenses in the fourth sub-group, internet and data communications, have halved over the past decade, but remain relatively high compared to the other three groups.

Cisco, in the internet and data communications category, was by far the largest payer of warranty expenses in the U.S. telecom industry in 2025. Cisco accounted for about 70% of all limited warranty expenses reported by U.S.-based telecom companies in 2025.

Telecom Equipment Manufacturers

As always, our data set is limited to public manufacturers based in the United States, which publish their limited warranty expenses in their 10-Q and/or 10-K financial reports.

The following charts include data from 220 manufacturers, which reported warranty expenses for some period between 2003 and 2025. In 2025, 27 of those companies published warranty expenses.

In 2025, the telecom equipment manufacturers in the internet and data communications group that reported warranty expenses were: Cisco Systems Inc., Vertiv Holdings Co., EnerSys, Lumentum Holdings Inc., Extreme Networks Inc., Juniper Networks Inc., Netgear Inc., Itron Inc., Calix Inc., Cambium Networks Corp., Applied Optoelectronics Inc., Amtech Systems Inc., Socket Mobile Inc., and CSP Inc.

The manufacturers in the landline and mobile phone group were: Ciena Corp., Motorola Solutions Inc., Preformed Line Products Co., and PowerFleet Inc.

In the broadcast and cable TV group were: SPX Technologies Inc., Vistance Networks Inc., Viavi Solutions Inc., and Optical Cable Corp.

And in the satellite and microwave group were: Comtech Telecommunications Corp., Aviat Networks Inc., KVH Industries Inc., Frequency Electronics Inc., and BK Technologies Corp.

L3Harris, the IT services provider and defense contractor formed in 2019 by the merger of L3 Technologies Inc. and Harris Corp., ceased reporting its warranty expenses in 2022.

Once-familiar names in the telecom manufacturing industry that we will not see in this report include Nortel, Lucent, Avaya, 3Com, and Motorola. Nortel went bankrupt back in 2009. 3Com was acquired by Hewlett-Packard in 2010, and is now part of Hewlett Packard Enterprise, which we put in the computer industry in our data.

Back in 2011, Motorola split into two companies, Motorola Solutions and Motorola Mobility. Mobility was acquired by Google in 2012, then by Lenovo in 2014. Solutions, the telecom business, remains independent, publicly-traded, and based in the United States. In 2025, the company published its warranty accruals and warranty reserve end-balance, but not its warranty claims costs.

Lucent, which spun off from AT&T in 1996 and included the Western Electric and Bell Labs businesses, was acquired by the French company Alcatel in 2006; Alcatel-Lucent was subsequently acquired by Nokia in 2016. Avaya, which spun off from Lucent in 2000, went private in 2007, and has filed for Chapter 11 bankruptcy twice since, once in 2017, and again in 2023.

In the broadcast and cable TV category, the biggest players were once Scientific Atlanta and JDS Uniphase. Scientific Atlanta was acquired by Cisco in 2015, so it's still represented in this report, though in a different category. JDS Uniphase split into two companies, Lumentum Holdings and Viavi Solutions, back in 2015. Lumentum is now in the internet and data communications category, while Viavi remains in broadcast and cable TV.

More recently, HP acquired audio communications equipment maker Plantronics Inc. in 2022. Hewlett Packard Enterprise acquired router maker Juniper Networks Inc. in July 2025. Juniper did report warranty expenses in the first half of 2025.

Nokia acquired networking and data transmission company Infinera Corp. in February 2025.

Broadband network company DZS Inc. filed for Chapter 7 bankruptcy in March 2025, and reorganized under the name Zhone Technologies.

Crypto trading services company Sonim Technologies rebranded as DNA X in January 2026. The company published a small amount of warranty expenses in 2024, but none in 2025.

Methodology

For each U.S.-based telecom equipment manufacturer, we perused their annual reports and quarterly financial statements, and gathered three warranty metrics: the amount of claims paid, the amount of accruals made, and the end-balance of the warranty reserve fund.

In addition, we gathered data on each manufacturer's product sales revenue, and used these to calculate two warranty expense rates: claims as a percentage of sales revenue (the claims rate), and accruals as a percentage of sales (the accrual rate).

Warranty Claims Totals

Figure 1 shows the total warranty claims paid by U.S.-based telecom equipment manufacturers, divided by industry sub-group, from 2003 to 2025.

In 2025, the U.S. telecom industry paid a total of $576 million in warranty claims, an -11% decrease from 2024.

In the data and internet group, Cisco paid $408 million in warranty claims in 2025, a -4% decrease from 2024.

Vertiv paid $28 million in warranty claims in 2025, a 14% increase from 2024. EnerSys paid $26 million in claims, a -6% decrease. Lumentum paid $12 million in claims, a 16% increase. Extreme Networks paid $12 million in claims, a -9% decrease. Itron paid $11 million in claims, a 37% increase.

Juniper Networks paid $8 million in claims in the first half of 2025, before its acquisition by Hewlett Packard Enterprise was finalized.

In the landline and mobile phone group, Ciena paid $24 million in claims in 2025, a -12% decrease from 2024.

In the broadcast and cable TV group, SPX Technologies paid $16 million in warranty claims in 2025, an 8% increase from 2024. Vistance Networks paid $10 million in claims, a -45% decrease.

In the satellite and microwave group, Comtech Telecommunications paid $4 million in warranty claims, more than double 2024's total of $1.6 million.

Warranty Accrual Totals

Figure 2 shows the total warranty accruals made by U.S.-based telecom equipment manufacturers, from 2003 to 2025.

In 2025, the U.S. telecom industry set aside $607 million in warranty accruals, a -8% decrease from 2024.

In the internet and data communications group, Cisco set aside $402 million in warranty accruals in 2025, a -7% decrease from 2024.

Vertiv set aside $43 million in accruals in 2025, a 69% increase from 2024. EnerSys set aside $33 million in accruals, a 1% increase. Lumentum set aside $22 million in accruals in 2025, more than double 2024's accruals of $9 million.

Extreme Networks set aside $12 million in accruals in 2025, a -2% decrease from 2024. Juniper Networks set aside $9 million in accruals before it was acquired in mid-2025. Netgear set aside $6 million in accruals in 2025, a 41% increase.

In the phone group, Ciena set aside $24 million in warranty accruals in 2025, a -5% decrease from 2024. Motorola Solutions set aside $4 million in accruals, double what it set aside in 2024.

In the television group, SPX Technologies set aside $19 million accruals in 2025, a -5% decrease from 2024. Vistance Networks set aside $14 million in accruals in 2025, a -22% decrease. Viavi Solutions set aside $2 million accruals, just about double its 2024 accruals.

In the satellite and microwave group, Comtech Telecommunications set aside $5 million in warranty accruals in 2025, more than double its 2024 accruals of $2 million. Aviat Networks set aside $2 million in 2025, a -31% decrease.

Warranty Expense Rates

Figure 3 shows the average quarterly warranty expense rates of the U.S. telecom industry, from 2003 to 2025.

We chose not to present warranty expense rates for the four individual industry sub-groups, since each group consists of too small of a sample of companies to create meaningful rates and averages.

Over 23 years, the U.S. telecom industry had an average warranty claims rate of 1.26%, with a standard deviation of 0.31%, and an average warranty accrual rate of 1.26%, with a standard deviation of 0.32%. The two warranty expense rates tend to stay very close together in the telecom industry. In other industries, we typically see the accrual rate higher than the claims rate.

In 2025, both rates sat around 0.85% in the first three quarters of the year, and dropped in the fourth quarter.

In 2025, the industry average warranty claims rate was 0.81%. The quarterly rates ranged from 0.65% in the fourth quarter, to 0.88% in the first quarter.

The average warranty accrual rate was 0.82% in 2025. The quarterly rates ranged from 0.71% in the fourth quarter, to 0.89% in the first quarter.

Warranty Reserve Balances

Figure 4 shows the total warranty reserves held by the U.S. telecom equipment manufacturers, from 2003 to 2025.

At the end of 2025, the U.S. telecom equipment industry held $748 million in warranty reserves, a 1% increase from 2024.

In the data and internet group, Cisco held $392 million in warranty reserves at the end of 2025, a 10% increase from the end of 2024.

EnerSys held $72 million in warranty reserves at the end of 2025, a 17% increase from the end of 2024. Vertiv held $43 million in warranty reserves at the end of 2025, a 57% increase. Lumentum held $23 million in reserves, a 77% increase. Itron held $18 million in reserves, a -18% decrease. Extreme Networks held $10 million in reserves, a -4% decrease.

In the landline and mobile phone group, Ciena held $56 million in warranty reserves at the end of 2025, a 0.5% increase from 2024. Motorola Solutions held $28 million in reserves, a 17% increase.

In the broadcast and cable TV group, SPX Technologies held $49 million in warranty reserves at the end of 2025, a 10% increase from the end of 2024. Vistance Networks held $18 million in reserves, a -9% decrease. Viavi held $7 million in reserves, a 3% increase.

In the satellite and microwave group, Comtech Telecommunications held $8 million in warranty reserves at the end of 2025, a 7% increase from the end of 2024. Aviat held $3 million in reserves, a -16% decrease.

Check out the rest of our series of 23-year charts:

Vehicle Sector

• 23rd Annual Product Warranty Report
• U.S. Passenger Vehicle Warranty Expenses
• U.S. Truck & Bus Warranty Expenses
• U.S. Auto Parts & Powertrain Warranty Expenses
• U.S. Aerospace Warranty Expenses

Building Trades Sector

• U.S. New Home & Building Materials Warranty Expenses
• U.S. HVAC & Appliance Warranty Expenses Expenses
• U.S. Power Generation Equipment Warranty Expenses

Electronics Sector

• U.S. Electronics Warranty Report
• U.S. Semiconductor Warranty Expenses