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Powering telecom for Digital India!

It is safe to say that even before the global pandemic hit us, telecom-powered digital connectivity services had been established as an essential service, a true leveler and the most potent tool for digital inclusion and empowerment across the world. The pandemic put to rest any doubts or debates in this regard.

In today’s modern world, digital services, riding on robust digital infrastructure, are the key enablers and critical determinants of a state and nation’s growth and wellbeing. Availability of digital services is vital for the economic and social development of all Indians, and is the only way to remove the digital divide between the haves and the have-nots.

Whether it be healthcare, education, defense, agriculture, transport, e-commerce, law enforcement, or governance, the telecom sector is one that is relied on by so many, and in so many ways. Mobile connectivity and broadband, AI technology, use of IoT and sensors, 5G networks, etc., are transforming the society into one that is constantly connected, aiding key societal functions, such as data processing, customer service, entertainment purposes, and even national security.

The telecom sector, in turn, relies heavily on uninterruptible power supply to ensure it can provide communication continuity, minimize downtime, and provide customers with satisfactory service. In fact, the energy sector also relies on telecom – to help manage and maintain their network of generators and grid distribution, and ensure grid resiliency during adverse situations. With such a crucial role to play in our day-to-day lives, the importance of electricity for the telecom sector cannot be overemphasized.

Unfortunately, unreliable electrical grid supply is one of the biggest challenges faced by the rapidly growing telecom tower industry in India. On an average, two-thirds of rural and two-fifths of urban areas face power outages at least once a day (IRES 2020). Telecom tower operators have to rely on diesel generators, batteries, and a variety of power-management equipment to address the demand–supply gap. The energy costs alone account for about 25–30 percent of the total network operating costs, affecting the profitability of the operators.

While the Government of India had provided infrastructure status to telecom industry way back in March 2012, no noticeable benefits have been extended to the sector even after a decade, especially in the matter of electricity provisioning. Despite the established importance of telecom in all aspects today, most states in India do not extend these much-needed benefits to the sector.

On the contrary, most of the states are levying commercial/non-industrial tariff on telecom – one of the highest brackets of tariff rate, resulting in undue financial burden on this sector, which works round the clock, and thereby hampering growth of this critical infrastructure. Given that telecom tariffs in India are amongst the lowest in the world, high electricity tariffs are one of the biggest challenges faced by the rapidly growing telecom tower industry in India. It is estimated that almost 30 percent of the tower’s OpEx accounted for is related to electricity tariffs, which is a significant amount.

In most states, the difference between an industrial electricity tariff category and a commercial electricity tariff is significant, leading to avoidable burden to overall telecom sector. For the continued growth and advancement of the sector to meet the needs of our fast-progressing Digital India, it is imperative that industrial tariff rates be applied to the telecom sector across all the states. It may be worth learning from China on this facet, which has provisioned that the energy utilized by 5G base stations, constructed by telecom operators and China Tower, will qualify for power–cost reduction incentives. Moreover, the electricity consumption of 5G base stations in China will be subsidized for three consecutive years.

Since setting up of network facilities in rural and semi-urban areas requires huge capital expenditure, high operational costs like commercial electricity tariff further adds to the burden. As a consequence, the telecom industry is hindered from expanding its footprint in the rural areas at a pace which is desirable. Hence, benefits of various government schemes are not reaching out to the rural populace, who are supposed to get the benefits as the schemes were designed for their betterment and overall digital inclusion.

In order to improve the lives of millions of such people, it is important and imperative to encourage the telecom sector to deploy networks in such areas through suitable incentivization, such as on power tariffs. In fact, the Telecom Regulatory Authority of India (TRAI), in its report titled, “Recommendations on Use of Street Furniture for Small Cell and Aerial Fiber Deployment” dated 29.11.2022, also recommended that it is justified that telecom sites be provided electricity connection at industrial/utility tariffs. Further, as part of the additional recommendations of the working group to the Forum of Indian Regulators (FOIR) on “Cross Sector Collaborative Regulation Between Telecom Regulators and Electricity Regulators,” it has been stated that “Telecom sites should be provided electricity connection under utility/industrial tariff. SERCs may be requested to incorporate the same in their tariff orders.”

Moreover, with the launch of 5G, we are at the cusp of embracing the next stage of digital revolution. Early deployment of 5G will lead to multiple new sources of revenue generation for the nation, state governments, local bodies, startups, existing businesses, and most importantly, benefits for the citizens. For this massive deployment of small cells (5G), there will be need for high number of electricity connections across the states.

While the 5G-new-radio standard is more energy efficient per GB than 4G, the proposed 5G use cases and new spectrum bands will require many more mobile sites. Further, as the technology advances and more services are provided at the edge, the need for storage and computation facilities like data centers will also rise.

One may ask in this regard, what about the use of green energy for powering the telecom towers?
The Ministry of Power has allowed green open access to consumers and the consumption requirement limit of open access transaction has been reduced from 1 MW to 100 kW for green energy, which is a welcome step. However, the telecom towers, which are the backbone of the network, have a power energy load requirement ~10 kW each and are being considered as individual units, instead of being treated as per the combined use of the sector. Hence, the reduction in consumption requirement for availing green open access is not helping the telecom industry, where the total number of telecom towers are almost 7.5 lakh and projected to grow at a very fast pace. For active participation of the telecom industry in the green energy initiative, electricity consumption at each telecom site must be allowed to be aggregated and offset with green power (solar, wind, hydro, etc.) generated at distant locations. This would make it more cost-effective for the telcos, while may also help in meeting India’s carbon emission targets.

Besides the critical aspects of affordability and availability of power, there are other important areas of concern for the industry on the power front that can be addressed to facilitate the telecom sector toward faster and efficient rollout of networks, such as new connections need to be provided in a predictable time bound manner. Also, being an essential service, exemption from scheduled power load-shedding is necessary for the telecom sector and must be provisioned.

Also, while there has been a significant increase in the installation of smart/pre-payment meters, their presence is negligible even in urban areas. The Electricity (Rights of Consumers) Rules 2020, clearly state that – “No connection shall be given without a meter and such meter shall be the smart pre-payment meter or pre-payment meter.” Since telecom network is present at the site, functioning of a smart meter is crucial and timely replacement of faulty meters, with smart/prepaid meters is vitally needed.

If the state governments provide such incentives to the telecom industry as mentioned above, the telecom infrastructure will be appropriately powered to meet the connectivity needs of our vast nation. Electricity accounts for ~25–30 percent of OpEx of a tower site, and with the densification and use of small cells in 5G, consumption is only expected to rise northwards. Positive provisions by the state governments in facilitating this essential sector will help minimize the dependence on battery banks and DG sets, and reasonable cost of grid-supplied power will help support the sector’s financial viability. The consumer will also be able to enjoy high-speed 5G networks with minimum impact on prices. This, in turn, would also catalyze the deeper penetration of telecom connectivity and help bridge the digital divide. Lower costs of power will not only provide much needed relief to the telecom sector but also ensure better reach of new-age technologies, such as AI, ML, AR, VR, and robotics powered by 5G to the far-flung corners of the country.

This article is authored by Lt. Gen. Dr. S.P. Kochhar, Director General, COAI. Views expressed are personal.

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