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Steering telcos to a lower energy consumption future (Analyst Angle)

telco energy

Energy consumption is becoming a pressing issue for telcos, driven by the global energy crisis. High global energy prices, triggered by the Russia-Ukraine conflict, have pushed up Operational Expenditure (OPEX), draining cashflow and thereby constraining infrastructure investment. The GSMA has estimated that the telco industry consumes 2% to 3% of worldwide energy consumption — a remarkable number in its own right, but because data usage is currently growing at over 20% Year-over-Year (YoY), it has the leverage to drive up energy consumption. There are also challenges on the supply side. In many parts of the world, national power grids are struggling to keep up with the energy demands from multiple economic sectors, such as South Africa and Vietnam.

However, it is not all doom and gloom, as innovation has the potential to curtail energy consumption. The 3rd Generation Partnership Project (3GPP) has set a target of reducing 5G-related energy consumption by 90% — a noble goal indeed! Communications Service Providers (CSPs) have recognized the need to develop sustainable operations, with 43 out of 99 studied CSPs having committed to net zero targets (Scopes 1, 2 and 3[1]) by year 2050 (see Figure 1). If this is to be achieved, then energy savings need to be secured across the board.

Figure 1: Net Zero targets by 2050 (Scopes 1, 2 and 3) across 99 global CSPs

Source: ABI Research

Tackling a major source of energy consumption — the cell site

From its own research, ABI Research has established that between 20% and 40% of a telco’s OPEX can be attributed to energy consumption, and of that amount, more than 50% relates to the Radio Access Network (RAN). Depending on the size of the country and its population, CSPs may need to deploy several tens of thousands (for a small European country) to even a million or more base stations (in China). Therefore, any savings in power consumption per base station sector will translate into tangible reduced OPEX and reduced Greenhouse Gas (GHG) emissions. Initiatives in the RAN domain that could contribute to those savings include the following:

Table 1: Relative importance of coverage and capacity, and various antenna configurations (2T2R, 4T4R, 8T8R and mMIMO)

The following two mobile telco case examples can help bring into sharper focus the potential energy consumption and GHG emissions reductions:

Key takeaways

Telcos have some aggressive targets for energy consumption and Carbon Dioxide (CO2) reduction. The GSMA has promulgated some laudable objectives for the industry to deliver on those targets:

Meeting these essential and noble goals will not be easy for telcos. Each telco will need to steer its own course to achieving net zero emissions. Some may be constrained and will have to take a longer route due to budgetary requirements, but crucially, many of these green initiatives will not only reduce GHG emissions, but also generate immediate energy cost savings. Efficiency gains will need to be applied across the network, but the RAN does represent a very significant proportion of a network’s operational costs. This article could not delve into all the energy consumption solutions, but we wanted to demonstrate that there are tangible solutions entering the market and quantify some of the energy consumption metrics.


[1] Scope 1: Direct emissions from industry; Scope 2: indirect energy consumption; Scope 3: production of purchased materials.

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