If there’s one factor that can arrest the nose-diving profitability of telecom operators, it’s the cost of powering the base transceiver stations, or cellular towers as they are called. Nearly 400,000 towers are in operation across the country and their energy costs alone account for 25 percent of the total operating costs. Grid outages are common in most tower sites, as are long running hours of diesel generators, over-sized batteries, with just a sprinkling of renewable options here and there. By no measure does this constitute the right energy mix for a tower that guzzles power 24x7.
Now, the Reliance IITM Telecom Centre of Excellence (RITCOE) at IIT Madras has developed a simulation tool that provides an optimum mix of battery back-up, diesel generator (DG) set and solar photovoltaic capacity for tower sites. Nearly 70 percent of the sites are faced with power shortages of eight hours or more; 18 percent of them are off-grid (they have their own power generation capacity and are not connected to the grid at all).
“No India-specific solution was available in this regard, which considered the high cost of financing,” says Ashok Jhunjhunwala of RITCOE. In providing a quantitative analysis of the various costs involved in powering a site, this model is as realistic as it can get.
It’s a long-due innovation in the telecom sector, says Alok Shende of Ascentius Consulting. “Constraint optimisation issue has never been addressed and hence there was no clear solution to this problem,” he says. If one takes diesel alone, it costs Rs 2.9 lakh per annum for one tower. Add to that a loss of 10-15 percent because of pilferage in remote locations.
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(This story appears in the 23 November, 2012 issue of Forbes India. To visit our Archives, click here.)