It pays to go green

Matt Walker/Ovum
07 Aug 2008

As environmental issues weigh on the public conscience and pocketbooks, telcos and their suppliers are debating their proper role. For telco CFOs, going green must serve the overriding goal of making money for their shareholders. With that in mind, a recent Ovum report, 'Surfing the green wave in telecom,' analyzes the three forces that will drive action.

First is that energy (mainly electricity) has significant direct costs for telcos. Ovum estimates that power currently accounts for between 2% and 3% of telcos' opex, but this varies significantly around the globe. These costs are rising, in some cases dramatically, due to high-usage data centers and mobile network expansion, particularly into rural areas.

Second, environmental and energy cost concerns give rise to a number of sizable business opportunities to service providers. Examples include video and audio-conferencing, international connectivity, Ethernet LAN/IP VPN, storage, power-line communications, RFID tracking and intelligent transport.

Third, green is finally 'in' and credible. Sustained commitments by corporations to environmentally friendly practices can pay off with public goodwill. Environmental policy and practice is becoming a key element of broader corporate social responsibility (CSR) efforts.

Rising costs

The electricity costs that come with data traffic growth and increased network penetration are putting pressure on telcos' operating budgets. Japan's AIST estimated that routers alone, keeping technology constant, would account for 9% of total power consumption in Japan by 2015.

Beyond the network, energy use by customer premises equipment is also significant, especially as broadband moves to fiber. NTT estimates, for instance, that the electricity consumed by an FTTx PON-based subscriber's CPE is around four times that of the network itself, per subscriber. Fortunately, a number of telco energy efficiency opportunities are within reach.

Some targets include data centers - among the most power-hungry of any facility around per square foot. The operators can carefully design facilities and locate them in areas with low electricity rates or access to renewable sources.

Also, as power efficiency (watt per Gbps) improvements have lagged transistor advances, router power usage has become a huge problem. Possibilities being explored include all-optical switching/routing, nanophotonics, and the use of low-voltage LSI chips.

According to several vendor and carrier sources, moving from DSL-based broadband to PON, especially GPON (versus EPON), reduces power usage costs.

With radio access networks, power saving techniques include network sharing, cell/site optimization, integrated power-saving features, more efficient amplifiers, tower top-mounted radios, and alternate BTS powering (biofuels, wind, solar).

For energy-efficient Ethernet, initiatives are aimed essentially at reducing the leakage/waste that comes from times when devices or functions are not in use, yet power flow is maintained.

In NGN implementation, closing central offices is a key part of cost savings goals.

In many developed western countries, greenhouse gas emissions-driven climate change has already become a real public concern. Out there, corporations' environmental policies play a big role in CSR evaluations, and more broadly in the public's image of the company and hence the value of its brand. Recent consumer surveys suggest some differential willingness-to-pay for products/services sold by companies with good environmental reputations.

As such, Asia's telcos should consider global leadership in public venues; minimizing transportation by rolling out networks and keep them up and running; pursuing online billing, advertising and other dematerialization efforts; regularly publishing carbon impact estimates; facilitating telecommuting and remote working; and bringing unconventional design principles into the construction and operation of telco facilities.

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