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Sun 15 Feb 2009 04:00 AM

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Greener networks

Companies from all parts of the telecoms sector are waking up to the benefits of energy efficiency and renewable power sources, but costs may remain a barrier to adoption in the short term.

Companies from all parts of the telecoms sector are waking up to the benefits of energy efficiency and renewable power sources, but costs may remain a barrier to adoption in the short term.

While the cost of oil may have dropped to levels that industry could barely imagine in mid-2008, when prices hit US$140 a barrel, energy remains a significant cost for mobile operators which typically use grid electricity or diesel generators to power energy hungry base-stations.

And the threat of a return to such expensive energy, combined with increasing competition and a need for greater operational efficiency - particularly amid the global economic downturn - is leading operators and vendors to look closely at energy efficiency and renewable energy sources for base stations and other essential network operations.

For Christian Bartosch, head of services for MEA, Nokia Siemens Networks, last year's oil spike certainly served as a catalyst that increased interest in energy efficiency and renewable energy among operators. It also served to make a far better business case for technologies that have often appeared prohibitively expensive at face value.

"Some operators were looking at their energy bills and they were just going through the sky. Rural sites that usually run on locally generated energy because they are too far from the utility grid suddenly became very expensive to run and the business plan didn't work any more," he says.

While energy prices have retreated along with global economic growth, the need for alternate energy sources and greater energy efficiency has now registered with operators in the region, particularly those with base stations in more remote areas that require their own energy source.

Bartosch says he has seen a steady rise in operator interest in energy efficient base stations in the region, with environmental responsibility and cost savings both helping to bring about change.

"It seems that a lot of operators have realised that green credentials also means lower opex in terms of fuel," he says. "Operators have clearly found that there is a beneficial relationship between being green and working with a vendor such as NSN to provide low carbon emission equipment."

Greening the machine

The problem with traditional base stations is that they use power-hungry air conditioning systems and are usually powered by fossil fuels, whether through the grid or a local diesel generator, depending on the location of the base station.

For remote, diesel powered base stations there is another environmental and cost consideration to take into account. Besides the pollution arising from the diesel used to power the base stations, operators also need to consider the effects of getting the fuel to the site in the first place, according to Bartosch.

"For some operators in Africa in particular, the diesel needs to be transported through some of the most pristine landscape and nature, which means there is a big environmental impact just getting this stuff there. This is one of the areas where operators are working with us to become much greener," he says.

There are numerous technologies available to operators looking for energy efficient base stations, with most of the main vendors offering green technologies. And the cost savings for operators, and the environmental benefits, can be huge.

Bartosch says NSN has experienced steadily growing demand for its energy efficient base stations, hybrid base stations which use a combination of diesel and renewable energy, and its flexi base stations, which are mounted on a pole outdoors, removing the need for air conditioning altogether.

The flexi base stations also bring other benefits. By being mounted higher up on a pole, they offer greater security and also give better coverage, which in turn also leads to greater efficiency.

Bartosch says energy savings of between 30% and 50% can be achieved on typical deployments of flexi and hybrid base stations, which can lead to a return-on-investment of about 18 months to two years.

But the initial cost of energy efficient base stations is significant. Bartosch puts the average cost of an NSN base station with best in class energy efficient generator at about EUR50,000 (US$66,400) per site. A solar and diesel hybrid generator has a factory price of about EUR65,000. "If you have 1000 sites, then it becomes very expensive, but if you only have a few sites, it is not that significant," he says.

The best selling technology at the moment for NSN in the region is the standard energy efficient base station, which requires housing and air conditioning, but is smaller and more efficient compared with mainstream versions. Meanwhile, demand for the flexi base station is also rising.

In the Middle East, NSN has already rolled out about 2000 of its flexi sites in the Middle East, with 1,200 of those in Saudi Arabia, according to Bartosch.

Another important aspect of reducing energy use from network operations is to manage the power consumption more effectively, so that systems consume less energy when less power is needed.

To this end, Bartosch says that NSN has an "intelligent" network operating system called NetAct, which allows the operator to adjust the power utilisation according to the traffic.

"During night time you can turn off certain sectors of the base station in order to reduce energy consumption or you can really drive this thing in line with the actual traffic demand. Parts of the station not being heavily used turn off automatically."

GSMA’s push for green

Global trade association, GSMA, recently launched the Green Power for Mobile programme, which aims to help the mobile industry use renewable energy sources such as solar and wind to power 118,000 new and existing off-grid base stations in developing countries by 2012.

Furthermore, the association forecasts that by 2012 up to 50% of new off-grid base stations in the developing world could be powered by renewable energy. GSMA research conducted with mobile operators indicated that only 1,500 base stations worldwide are powered by at least one form of renewable energy at present.

The GSMA Development Fund is already working with several mobile operators including Digicel to power 17 new base stations on the Pacific island of Vanuatu with renewable energy sources as well as Bharti, Orange, MTC, MTN, Safaricom, Telefonica and Vodafone among others.

In terms of growth of the sector, Bartosch says that in the Middle East and Africa, growth is steady, but he thinks far greater growth is likely to occur in coming years. "In the MEA we think there will be a steady demand coming from the main operators.

"The bigger operators in the area that are still sitting on significant amounts of cash will actually use this opportunity to drive this aggressively and improve cost efficiency and market share, and restructure and renovate their networks. We will see from the likes of Etisalat and Zain a continued expansion in a continuous network improvement in terms of optimising networks," he adds.

Omar Abdulla Almarzouqi, business development manager at telecoms infrastructure specialist, Alan Dick Middle East, is equally optimistic about the growth of energy efficient base stations, but he is more skeptical about the market for renewable energy to power base stations in the Middle East, at least in the short term.

The reason is that for base stations in the Middle East, renewable energy remains a "bit of a dual-edged sword" because most base stations use power hungry AC systems, and it is difficult to use renewable energy with this type of base station because of their high energy demand.

The situation is complicated further by the need to use batteries to store some of the energy produced by renewable energy. Batteries need to be kept cool, which could potentially add to the AC demand further.

"That has been one of the issues in this part of the world, while we have got a lot of sun, we have a lot of heat as well," Almarzouqi adds. "And to cap it all," he says, "diesel remains relatively cheap in many Middle East countries."

Despite this, Alan Dick says that it is seeing a rise in demand from operators interested in cutting installation and operating costs, and improving the efficiency of their base stations.

While Alan Dick has a range of base stations designed help operators work more efficiently, Almarzouqi is also keen to make people aware of the energy and financial cost of building and installing regular base stations.

He points to issues such as selecting the right site for a base station, ground pollution, and the carbon footprint associated with construction as environmental issues that should be taken into account.

These issues are addressed by one of Alan Dick's fastest growing base station solutions - the Rapid Deployment Unit, or RDU, which has seen sales leap by about 100% in the Middle East in the past year.

The unit can be rapidly deployed with a team of about five people in less than six hours to provide a permanent or semi permanent cell site with a footprint of 36 square metres.

The RDUs consume 10% to 15% less fuel owing to efficient generators and tough, well- insulated shelters that reduce the amount of cooling needed. Meanwhile, the pre-cast concrete base allows the unit to be deployed without the need for expensive and environmentally harmful foundation works.

"To build a regular base station site will require weeks of construction work on site," Almarzouqi says. "You will have trucks back and forth, cranes, concrete mixers and construction workers. The cost both financially and environmentally is large. Our RDU requires one lorry to bring to site and one team of guys six hours to install."

Alan Dick is also seeing increased interest in its RDU Light base station, which requires no housing, eliminating the need for AC. These base stations use between 30% and 50% less fuel than conventional base stations, and can also be powered partially by renewable energy.

Alan Dick has already deployed a number of these base stations in the Gulf for a new mobile network.

As operators begin to update their network infrastructures in the next few years, Almarzouqi is optimistic that many companies will opt for low energy base stations, whether outdoor versions, or efficient indoor versions. And as this happens, more operators will also opt to add renewable energy.

"I think it will move into the mainstream," he says. "Incumbent operators will be looking at moving on to new technology in the next few years as their networks become a bit older, they will see there are cost savings in terms of using outdoor BTS. Over time operators will start looking more into adding renewable energy to their sites. In the long term it's cost effective as well as demonstrating corporate responsibility."

Similarly, Bartosch is convinced that the move towards green base station technology is already mainstream, at least in terms of "thinking and acceptance". "Now it is a mindset, and now that companies have discovered that they can save Opex," he says.

"The business plan changes with the oil price to some degree but also they are afraid of vulnerability for the future business so it is clearly on the roadmap."

Green business case

Nick Smailes, CEO of PowerOasis, a UK company that provides off-grid power solutions for mobile base stations, believes that operators from established markets need to "tear up the network lifecycle economics rule book" when penetrating emerging markets.

Emerging markets are expected to represent 90% of the next 2 billion global subscribers, requiring between 1.5 million and 2 million new base stations, with an expected 50% being either off-grid or connected to unreliable grids, according to Smailes. Traditionally these base stations are powered by high OPEX diesel generators producing 30 tonnes of CO2 per year.

While operators are usually compelled to focus on CAPEX during network rollout, they also need to consider the ongoing costs of running their networks, according to Smailes. When powering base stations with diesel generators in emerging markets, operators can be faced with high delivered cost of diesel and average ARPUs of $10-$15, but sometimes as low as low as $2 in some countries, he says.

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