Green Telecoms

1. Exec Sum
1.1. “Green” a major concern for society
“Green” is no longer a niche issue but has become a part of the mainstream of societal and
political debate at national and international levels. Businesses have reacted to this
development committed to sometimes very ambitious targets for reducing their emissions of
greenhouse gases and other environmental impacts. Some of these efforts are required to
comply with environmental regulations but to a significant extent these commitments are
entirely voluntary or aim at over-achieving targets set by legislators.
There is widespread agreement that electronic communications have a key role to play in
curbing CO2 and other emissions. The adoption of ICT-enabled solutions will allow realising
highly significant energy efficiency potentials in different sectors, notably in the provision of
electric power, housing as well as transport and logistics. The ongoing dematerialisation of
goods and services further adds to these benefits.
Yet, the communications industry is not only part of the solution of the “green” challenge.
The operation of telecom networks, data centres as well as CPE requires substantial
amounts of energy. Shortening handset life-cycles contribute to increasing amounts of waste
and a growing demand for raw materials. The communications industry and telecom
operators in particular therefore have to prove they are capable of coming up with the
solutions to the environmental issues raised by their own activity.
Direct regulatory pressure on telcos remains limited so far and is more focused on recycling
and waste management than energy consumption. There are however, a number of national
and international initiatives aiming at making operators adhere to voluntary codes of conduct.
Should the industry fail to respond to this soft regulation, it might face a stricter set of rules in
the future.

1.2. Green on telcos’ agendas for good

More than just to be aware of green solutions existence, telcos are now more and more
involved in implementing them in their network infrastructure and data centres as well as for
their handsets.
Indeed, network equipments are highly consuming energy because of the amounts of power
to run equipments as well as to cool them. In addition, telecom networks have scaled rapidly
over the past decade mainly driven by the development of Internet. So that expansion has
resulted in the increase of energy consumption with more computers, more handsets, more
websites, more servers, etc… and also more network equipments.
Heading to a greener world, network equipment providers have the responsibility of
delivering eco-sustainable solutions to telcos and especially the most energy efficient

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solution, considered as the most important factor to reduce the environment impact (and
telcos' electricity bills).
Taken really seriously, green aspect is even integrated in procurement process which will
force network equipment providers to develop and propose green equipment finally. Many
market players have already put forward the environmental performance of their products as
a key selling point and are gaining traction.

Concretely, a myriad of green solutions is now at telcos disposal as seen in the figure below.
In particular, significant improvements have been made in power efficient infrastructure
design limiting energy consumption and CO2 emissions. A number of innovations have been
realized on equipment from integrating new functionalities to rationalizing network equipment
in a more efficient way, particularly for mobile network. Some of them are self evident like
improving network design to limit the number of equipment or the integration of energy
saving mode managing the power consumption.
Similar efforts have been also made on handsets. In particular, attention has been paid on
developing recycled devices made of bio materials.

Telcos, like in the other industries, are banking on using renewable sources in order to
consume "cleaner" energy than fossils fuel ones (from oil, coal and gas). They are working to
integrate other ways to power their networks – not only in developing countries to power
base stations in isolated areas where there is lack of or no electricity grid – but also in
advanced countries to become more energy efficient. For the time being the sun and the
wind are the natural sources of energy used by telcos. Today some telcos already purchase
100% electricity from renewable sources.

Figure 1: A myriad of green solutions

Source: IDATE

Major improvements have also been visible in recycling. Telcos are comitted in recycling
network equipment waste generally by collaborating with independent expert companies.
And, heaps of mobile phones recycling program have been initiated by telcos notably in
Europe where the phone is among the electronic equipment subject to the WEEE directive.

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These programs are intended to increase consumers' awareness of the impact of hazardous
materials contained in mobile phones and the importance of recycling such equipment. In
addition, the initiatives launched often include humanitarian partnerships such as Red Cross
and WWF.

1.3. Implementing “green”

As shown above, telcos have quite an extensive set of tools at hand to bring down their level
of CO2-emissions and reduce the overall impact of their activities on the environment. The
actual way of implementing those measures may vary between operators in function of the
specific characteristics of their assets and business activities. IDATE has mapped the
approaches of seven operators in European the US and China. Although an objective direct
comparison is virtually impossible to make due to differences in operators’ operations and
reporting standards, different patterns can be observed.

Figure 2 : Telcos’ approaches to green

Source: IDATE

1.4. “Green telecoms”: a win/win situation

Telcos are operating in a difficult market environment today. Major markets are increasingly
saturated and growth rates are very modest.
Intense competition led to eroding prices and falling margins. At the same time, the IP-
revolution has transferred much of the value that was formerly created by network operators
to providers of over-the-top applications. As the demand for fixed and mobile services grows
and the increasing consumption of data traffic requires more powerful data centres; energy
demand for infrastructures keeps growing, which translates into higher operating expenses.
In this context, cost reduction schemes have become a necessity for operators. Telcos
therefore have a strong incentive to invest in energy-efficient “green” equipment. A
potentially higher initial investment will be rapidly offset by lower energy bills for running and
cooling the equipment. Other “green” schemes like online billing or car fleets running on
CNG or other alternative fuels fit into the same pattern.

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Next to cost cutting, image building vis-à-vis legislators as well as business and residential
customers is an important aspect of green telecoms. Positioning themselves as responsible
corporate citizens is not only a marketing strategy but will help avoiding stricter regulations
and creating the credibility for telcos to be perceived as important contributors the broad
quest for a low-carbon society. Telcos are generating positive externalities for the
environment as they strive to improve their business performance

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