According to reports, “Go green” may be a popular theme across the world and across industries, but India’s financially stressed telecom operators have not shown much enthusiasm to it so far. Telcos say they can’t afford the huge expenses needed to set up capacity to generate alternate sources of energy such as solar, fuel cells or wind in order to meet the telecom department’s “stiff ” green targets unveiled in January 2012.
The government on its part says its targets are liberal and blamed the operators’ lackadaisical approach towards adopting green energy. The green policy requires telecom companies to migrate 50% of all cell towers in rural areas and 20% in urban areas to hybrid power by 2015.
The government is now considering a viability gap funding to help the operators meet their green energy targets, a telecom department official told ET. Most mobile phone companies such as Vodafone India, Uninor and Idea Cellular and independent telecom tower operators such as Bharti Infratel Ltd, the tower unit of Bharti Airtel, say they have taken steps to comply with the telecom department (DoT) directive.
Measures include shifting to solar and hybrid batteries, free cooling units, expensive lithium batteries to fuel cells to optimise energy usage and contain diesel consumption, which, in turn, help to cut down on carbon emissions. Still, with no clarity yet on who will bear the cost for creating green energy capacity — estimated by the telecom industry to be a whopping Rs 66,000 crore — operators are going slow on investments into go-green projects, say analysts. Sector regulator Telecom Regulatory Authority of India (Trai) has termed the estimated cost “exaggerated”, saying cheaper options are available.
Telecom operators say it costs Rs 15 to run a tower site on diesel, compared to merely Rs 6-8 per unit with grid power, a source which meets just about a third of the sector’s energy needs. To bridge the gap, if one were to turn to solar energy to run a tower site, the cost goes up to Rs 28-32 per unit, making it commercially unviable for mass deployments, said Manoj Singh, vice-president (energy & regulatory) at Indus Towers, the world’s leading telecom tower company with 1,10,000 towers.
So, amidst erratic grid power support, especially in the hinterlands , and the high cost of setting up green energy generation capacities, telecom operators continue to rely on an expensive, environmentally-unfriendly fuel like diesel to keep their towers humming to ensure 24 x 7 mobile coverage, as mandated in their licence agreements. “The telecom industry is already stretched and reeling under Rs 2,50,000 crore of debt.
It is in no shape to shoulder an additional . 66,000 crore in green energy capacity creation, which is a non-viable investment,” said Umang Das, director general of Tower & Infrastructure Providers Association (Taipa), the industry lobby body for telecom infrastructure operators.
Telecom companies and tower operators claim the capex cost of putting up a solar unit ranges between Rs 11 lakh and Rs 15 lakh per site which has one tenant. Even if one considers the base price of . 11 lakh, the conversion cost of powering 3 lakh tower sites on solar in a normal double tenancy scenario would come to Rs 66,000 crore.
And the investment doesn’t make business sense as it can’t be passed onto consumers as telecom services would then become unaffordable, Das said. Not surprisingly, both mobile phone companies and tower operators have sought viability gap funding (VGF) from the government. A top DoT official, who is directly tracking implementation of green telecom directives, ruled out the prospect of any government subsidy.