The new face of alternative energy in telecom
There are few inescapable facts and undeniable truths that most people can agree upon. However, one thing we know for sure is that traditional sources of energy (fossil-fuel-based) are becoming more expensive and less available. The implications for society will vary greatly. But for mobile operators in both emerging and mature economies, it means that the opportunity for alternative energy strategies has arrived.
Mobile operators are adopting, integrating and strategically deploying alternative energy sources – including solar, wind and fuel cell power – for three main reasons:
- Alternative energy is an eco-sustainability enabler.
- Alternative energy can contribute to the top line.
- Cost containment has elevated interest in energy consumption patterns.
Alternative energy seeds eco-sustainability
Alternative energy technologies provide a key strategic differentiator for mobile service providers. Offering solutions that address eco-sustainability concerns and deliver business benefits can enhance operator relationships with consumers, industries and government regulators.
Now more than ever before, subscribers are attracted to brands that are on the leading edge of eco-sustainable business practices. There is also a trend where significant segments of the consumer market are even willing to pay a premium to providers that take tangible steps to protect the environment. This choice to buy green is a new opportunity for mobile operators who credibly deploy alternative energy technologies and demonstrate a commitment to the environment.
Political and regulatory initiatives among industrialized nations are driving business executives to explore and pursue low-carbon emission strategies. These new strategies affect the internal behavior of companies in fields such as healthcare, transportation, retail and financial services. Eco-sustainability is also becoming a key criteria in many organizations’ supplier and partner selection decisions.
Mobile operators that adopt alternative energy strategies are, in general, viewed as environmentally friendly. Leveraging this perception allows operators to expand their reach and assist customers in achieving their ecological foot-print objectives.
A revenue generator
The GSM Association (GSMA) estimates that 75,000 new off-grid base station sites will be built each year in developing countries through to 2012. [1] This is a new revenue opportunity for service providers in emerging economies. Also, some remote regions in mature markets have not yet been tapped.
Connecting people who are off-grid has been difficult for service providers for a very long time, but it is also clear that these markets are highly price sensitive. Using traditional energy technologies — such as diesel-powered generators — to activate off-grid base stations has been economically challenging. The cost of buying and transporting fuel to remote sites can represent up to 35% of the cost to maintain an operational base station. The business case for operators wanting to bring economic development to remote locations using traditional energy technologies has been very challenging.
Alternative energy technologies create new opportunities. For instance, take the case of a base station initiative that Alcatel-Lucent contributed to in the islands of Bettenty, Senegal, West Africa. To broaden the appeal of the islands, the mobile operator explored the prospect of installing a base station to serve the needs of the local population and help boost tourism activity. The cost of powering the facility using diesel generators was not feasible. Alcatel-Lucent worked with the operator to design and deploy the base station using a resource that is abundant in Senegal – sub-tropical sun.
The solar-powered base station has been a terrific success. It has also enhanced the economic position of the local residents. Tour guides can manage reservations and serve guests throughout the islands. In addition, fishermen can communicate with local and regional markets to get updates on constantly changing prices that directly affect their catch-of-the-day. The mobile operator is tapping into new revenues and is an innovator and important player in local economic development.
A large operator in the interior mainland of the Ivory Coast had similar success. They worked with Alcatel-Lucent to install a solar-powered base station in a remote village. Within a year, a local migration grew the village to five times its original size. The base station served as a de facto “digital central plaza,” bringing individuals and families together and commercial activity to the rest of the nation and beyond.
These examples reveal the powerful role that telecommunications can play in economic development. Reducing implementation risks with cost-effective deployment allows operators to quickly establish mobile communications as an integral part of life for people and businesses that have never had access to telecom services. As adoption of alternative energy technology increases for all types of applications, mass-market manufacturing costs for equipment will decline, further enhancing the business case.
In developed economies, expanding reach to remote areas, combined with new advanced wireless services such as 3G+ and LTE, provides an opportunity to connect with the disconnected and offer a variety of digital services, depending on the need.
Cost containment strategies enhanced
The growing popularity of “flat-rate” voice and data plans have contributed to booming traffic on networks. That rise in traffic has not translated into a rise in revenues for operators. For this reason, operational cost containment has become a strategic priority for operators in both emerging and mature markets.
According to one estimate, major operators in the United States have fielded over 50,000 cell sites. [2] With energy costs hovering at US $54.00 (€38.00) per megawatt-hour, direct energy can add up to more than US $150 million (€105 million) per year. In more expensive markets – most notably Europe – the cost is easily more than twice this figure.
As alternative energy telecom technologies mature, first through large-scale off-grid deployments, the ability to serve on-grid applications will increase. These on-grid applications will enable operators to reduce the amount of energy that they require from utility companies.
Keys to success
To select the right alternative energy solution, operators must understand their customers’ business requirements. In addition, understanding the site engineering needs and integrating the alternative energy technology with the telecom network design are vital.
Strategically conceived, designed and deployed, alternative energy technologies can offer un-served populations inexpensive wireless access to the global communications network. Considering alternative energy initiatives during the initial network planning and design rather than after base stations are sited and installed is key. The most successful operators will begin with the end in mind so that, for example:
- Network elements take advantage of local wind corridors
- Facilities are oriented to optimize sun exposure
- Real estate footprints are considered for solar optimization
The road ahead
Alternative energy strategies represent a challenging yet critical new discipline that mobile operators must develop. The nuances are many, and deployment is complex. Effective implementation will require expertise and sophisticated technologies. Success will require understanding climate challenges across many different environments. And regardless of the many regulatory initiatives being debated by many governments around the world — including cap-and-trade [3] or cap-and-tax [4] — service providers that have a defined alternative energy strategy will be in a better position to meet the new requirements that may arise.
Alternative energy technologies are maturing rapidly. They are becoming more reliable, cost-effective and resilient with new use cases emerging for more elements in the mobile network. The good news for operators is alternative energy strategies will continue to grow in importance.
Alcatel-Lucent is working every day with mobile operators around the globe to make alternative energy strategies a reality by delivering key technologies and proven operational methodologies.
The bottom line for organizations is that in an increasingly eco-aware world, alternative energy technologies can help stimulate economic development in both developed and emerging markets.
To contact the author or request additional information, please send email to enrich.editor@alcatel-lucent.com.
Footnotes
[1] http://www.digitalopportunity.org/comments/wired-to-unwired/?searchterm=None
[2] http://www.openbasestation.org/Newsletters/July2008/actix.htm
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This is very good article
Using diesel power generators as a means of main or back up source of energy for GSM base stations has indeed been economically challenging especial for emerging Telecom operators in Africa.
The Solar-powered base station using the African sun has potential market for GSM operators in Africa. Its matter of coming up with a design that easily integrates or compliments with the existing power infrastructure.
Thanks for the lucid article.
Regards,
Mustafe S Jama
Excellent blog Really I like how eyinvtherg is well written. I am questioning how I might be made aware of Whenever there is new content. I have subscribed to your rss feed thank you!
they may start to creep in in the next 15 years, but they will still not be the lgsaert part of the energy market for many more years. the oil producing countries will need to adjust. there are many other uses for oil than just as fuel, such as plastics, but there will be alot of waste produced and lower profits. we may see more uprisings in countries that once again see thier lgsaert capital evaporate