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Commercial power and fossil fuel consumption is turning out be a crucial element in deciding the opex of telecom operators in the country. The situation is alarming since many operators spend over a third of their opex on power and fossil fuels like diesel. Since management of energy resources is too complex, stakes involved are high.

The expansion of operators into new circles and rural areas and the entry of new players will add fuel consumption. Strengthening their foothold in rural area without adequate power backup spells danger for the telcos. The challenge for operators lies in feeding power to BTS sites, especially in rural parts of the country where grid power is available only for a few hours during the day, while in some parts there is no grid connectivity at all. This emerges at a time when the ARPUs are falling.

Issuance of additional and new 2.5G license as well as 2G license combined with announcement of 3G spectrum auction has put telecom operators on toes to build new infrastructure in new circles.

The ever-growing telecom market in India is also under pressure to reduce carbon emissions.

As per the report of Sir Nicholas Stern, former World Bank economist, India could face 9-13% loss in GDP by 2100 if global warming remains unchecked.

The present state of the Indian telecom market-a mix of new and existing operators-has got operators asking themselves whether to invest in setting up new infrastructure to increase their reach and returns or build a green infrastructure, which initially will cost a lot.

In a Fix
Telecom operators are faceing a challenging situation today. To run their telecom networks in India, operators have to spend billions on power and fuel. That pressure is mounting as price of power and diesel is unpredictable.

Operators are worried from this increasing cost of their expenditure on fuel because of cut throat competition among them to provide low priced service to users.

“The overall opex for 2008-09 is approximately Rs 3,000 crore. Out of this the expenses for power (commercial supply) is Rs 616 crore and for diesel it is Rs 741 crore,” says Harish Jere, general manager, Infrastructure Planning & Operations, Reliance Communications.

Carbon emission targets set by the Kyoto Protocol is compelling countries to cut down on carbon emission. Though in India there is no strict legislation for companies to turn Green, many telecom operators are voluntarily adapting Green practices.

“Most corporates are now getting more aware and conscious about the benefits of Green. It will not be right to single out the government. It has to be a joint initiative. Though things do work well when there is a law. Guidelines are always a good driving force. CNG for transport has changed the scenario completely. Similarly, any regulation binding the telcos towards Green will surely make a difference,” says Ravinder Jain, CIO, Aircel.

The benefit of growing Green also adds to the brand value and reflects in response of the customers towards companies.

“Going Green is really a win-win situation for customers. They can significantly reduce their CO2 footprint with our solutions, save money on energy bills, and build a responsible company brand that consumers are increasingly responding to and putting importance to while choosing their operator,” says Michael Kuehner, head, Nokia Siemens Networks, sub-region India.

The wireless segment dominates the Indian telecom industry when compared to wireline telephony. Therefore, to manage the growing subscriber-base, telecom operators are forced to increase the number of BTS towers in India.

However, the challenge is greater in rural India.

“Northern and northeastern parts of India have been the regions where Reliance Communications had to spend more for power management. This is primarily because of inaccessible terrain, rough weather conditions and less market. The maximum amount is spent in states of Bihar, Uttar Pradesh, Madhya Pradesh and Maharashtra where the availability of power is low. We spend nearly 70% more than a normal state. The current figure of state electricity board power availability on pan India is 16-17 hours per day and the diesel generator (DG) running is nearly 4-5 hours per day. In states mentioned above the DG running is nearly 14-15 hours,” elaborates Jere.

Here, diesel generator is the easy alternative but this too comes with costs-on telecom operators' exchequer and the environment.

“According to research firm Ovum, power currently accounts for between 2-3% of total telecom opex globally, and is trending upwards. Compared to fixed players, wireless carriers have relatively high electricity costs and they will place power consumption as a key criterion for evaluating radio access network infrastructure,” says Anurag Vashistha, senior VP, energy management, GTL.

It is estimated that 300,000 new BTS sites will roll-out in three years in India while nearly 200,000 exist already. Typically, these sites are backed by a 15-25 KVA or 40 KVA diesel generators. Most sites are located in grid-deficit areas that need a diesel generators to run for as much as 4-20 hours.

Even a typical 15 KVA diesel generators consumes over 2.5 ltr of diesel every hour. Going by this basic statistics, Indian telecom towers consume diesel worth Rs 17.5 mn, assuming the average price of diesel is Rs 35. This means a minimum of 5.2 mn kg of CO2 is emitted into the environment per day. Transporting diesel to the BTS site and theft of diesel, common in rural areas, add to the woes of telecom operators.

Looking for Alternatives
Operators want to go Green if not by choice then by compulsion caused by the escalating cost of energy management on their BTS site. Energy management is the biggest component of an operator's operating expenditure. According to an ABI research report, network infrastructure accounts for 80% of this opex. Therefore, operators are focusing on reducing even a unit of power consumed per BTS site.

“Going Green is really a win-win situation for customers: they can significantly reduce their CO2 footprint with our solutions; save money on energy bills; and build a responsible company brand that consumers are increasingly responding to” Michael Kuehner, head, Nokia Siemens Networks, sub-region India	The tariff being paid is at commercial rates. In some states where our connected load is more than 20 kw we need to go for time-of-day tariff” Anurag Vashistha, senior VP, energy management, GTL

“In all the recent announcements of our wins, you can clearly see the trend in our customers putting a lot of emphasis on the environmental aspects of our products, in addition to their technical capabilities and potential to save opex,” says Kuehner.

Idea Cellular, Ericsson and the GSMA's Development Fund teamed up to develop bio-fuels as a power source for wireless networks in rural India. In a pilot project, bio-fuels were used to power mobile base stations located in Latur, Maharashtra, where main electricity is highly unreliable. In the first phase, four BTSs in the Maharashtra circle were powered by bio-fuels. After completion of this phase, Idea started powering approximately 350 base stations in Andhra Pradesh with waste cooking oil. These base stations were made to run on 80:20 blend of diesel fuel and non-edible oil. “The green project success in AP can be attributed to a favorable ecosystem in the region where an entrepreneur was engaged for sourcing, blending and distribution of the fuel,” says Rajat Mukarji, Chief Corporate Affairs Officer, IDEA Cellular.

Reliance is looking for an opportunity to deploy wind and solar energy solutions to run their sites. It targets to run approximately 10,000 sites using renewable energy sources. As an alternative to diesel, Tata Teleservices is experimenting with Liquefied Petroleum Gas (LPG).

With operators focusing to reduce power consumption in their active infrastructure, a key initiative in this regards is IP transformation of the present networks across the globe. “With an IP-based network, an operator can reduce its overall power consumption and hence contribute to a green globe as well as reduce their total cost of ownership,” says an Alcatel-Lucent spokesperson.