5G energy costs climb despite efficiency gains

Lower utility costs and greater sustainability — common refrains for 5G — isn’t showing up in the numbers shared by some of the world’s largest mobile network operators.

Carrier spending on electricity, fuel, and water accounted for an average of 5.2% of opex during 2020, a slight increase from 4.8-4.9% during each of the previous four years and 5% in 2015, according to MTN Consulting.

The analysts, pulling data from 17 operators including three of the top six globally, conclude early 5G deployment activities contributed to the rise in utility costs as a percentage of opex, excluding depreciation and amortization. Many operators don’t report utility costs, so the sample set isn’t comprehensive.

China Mobile, KDDI, KT, LG Uplus, Ooredoo, SK Telecom, and Telecom Italia all reported year-over-year increases in utility costs during 2020. China Mobile, the world’s largest network operator, spent nearly 8% of its 2020 opex on utilities, according to MTN Consulting. China Unicom was the only major operator to report a decline in utilities spend as a percentage of opex.

The evidence that 5G is driving costs higher is “modest,” but the increases “serve as a good reminder that telcos will need to seek out energy efficient equipment, software, and network architectures as 5G penetration grows,” Matt Walker, chief analyst at MTN Consulting, wrote in the report.

Indeed a recent survey from GSMA Intelligence reported 67% of communications service providers expect energy costs to rise through 2024 in line with current trends.

Rising capacity offsets energy efficiency gains
While most radio access network (RAN) vendors and other network infrastructure manufacturers consistently release more energy-efficient hardware, increased traffic and bandwidth capacity typically requires operators to install more equipment and store more data in data centers. This, combined with the average power drawn from a 5G base station, more than offsets energy-efficiency improvements in the latest equipment.

“A typical 5G base station consumes up to twice or more the power of a 4G base station. The disparity can grow at higher frequencies, due to a need for more antennas and a denser layer of small cells. Edge compute facilities needed to support local processing and new IoT services add to overall network power usage,” Walker wrote.

“The bottom line is that, in an increasingly 5G world, telcos could face significant growth in their energy bills. To address this issue, telcos will need to take actions at the organizational, architectural, and site levels. Vendors have an important role to play in this effort,” he added.

Meanwhile, artificial intelligence and automation are frequently cited as energy savings enablers. Nearly half of the 103 operators surveyed by GSMA Intelligence said they expect these technologies to cut energy costs up to 20% during the next couple years.

Multiple factors impact energy costs, including the price and type of energy, age of network equipment, how much energy is self generated, and energy drawn by data centers, according to MTN Consulting.

One-third of the global wireless industry, by revenue, earlier this year committed to achieving net-zero emissions by 2050 and almost two-thirds of the mobile sector has established targets to cut emissions rapidly during this decade, according to GSMA. SDxCentral