Why holding telcos to their green agenda is critical for reaching sustainability milestones

Cop26 has highlighted the urgent need for nations to come together and solve the rapidly rising issues of  sustainability.

Whilst many countries made pledges to limit or reverse methane emissions and deforestation, emphasis was put on businesses to reach net-zero by 2050.

For telecommunications network operators specifically, the issue of sustainability has become urgent, as the demand for digital communications during the pandemic forced their infrastructures to consume more energy than ever. At the same time, the infrastructure investments on 5G and fibre networks come with sustainability impacts. The shift to hybrid and global work as well as the continuous energy crisis puts much more pressure on telcos, increasing their carbon footprint as a result.

Until recently, telecom providers haven’t been put under as much scrutiny as other high carbon and methane emitting companies. However, as the telecoms industry produces double the global CO2 emissions compared to civil aviation, which is forecast to grow to 14% by 2040 due to the 60% increase in global data traffic, it’s crucial now more than ever for CEOs of telcos to make sustainability the top of their business agenda.

So how can telcos contribute to the global sustainability commitment and ensure loyalty from their customers and employees?

Utilising the Cloud

Telco’s that rely on cloud computing are best equipped to offset their carbon emissions,

lower their carbon footprint, reduce energy consumption and produce significantly less electronic waste. On the BSS side in particular, we see that opting for a cloud based platform is preferable not only for the flexibility and technological benefits that come with this technology, but also because it’s greener. In fact, a study from 2018 found that the Microsoft cloud was as much as 93 percent more energy efficient, and as much as 98 percent more carbon efficient, than on-premises solutions. With cloud adopting having sky rocketed since the pandemic, there is hope within the industry that cloud can continue to be a key element in sustainable growth for telcos.

Energy efficiency

Energy costs currently account for up to 40% of telcos operating expenses, and this figure is set to rise with the rapid introduction of 5G and 6G networks.

Turning off the 2G and 3G legacy systems will help businesses save nearly 15% in energy consumption, whilst reallocating those frequencies to the current protocols to increase coverage and speed for users. The use of AI to help analyse data use in certain areas and trigger sleep-mode where data consumption is low can also help reduce power and, as a result, costs.

Renewable energy

Powering telecom towers requires a constant supply of energy, and whilst many operators rely on fossil fuel-powered generators to ensure continuous supply, many others are switching to solar and wind energy that can power towers on-site. This way towers can be installed in rural areas, increasing signal range and helping reduce costs by up to 75% whilst boosting company’s commitments to the ESG agenda.

Waste reduction

As reusing equipment, rather than purchasing new hardware, can lower the carbon impact by up to 89%, many telcos are looking to pursue circular economy principles to tackle waste issues within the industry. The principle involves recycling or reusing routers as well as donating old kit and smartphones. According to a recent study, the value of recycled hardware for telcos will sit between $45-$80 billion per year, and many telecom operators are already showing great results where recycling kits reduced their carbon footprint by 2,500 tonnes, saving over 10 million Euros.

The use of eSIMs have a huge role to play in creating a greener future in telecoms – by using new, digital, ‘non-physical’ SIMs, we are able to remove the entire physical supply chain, which has a massive impact on carbon emissions. Not only this, but it also eradicated the need for atock management and distribution costs  whilse creating significantly less electronic waste.

Green bills initiative

We are seeing a few examples where telecom operators are using natural materials such as wood to build network towers that can easily blend into the environment and cause less distress to the natural habitat. However, a few MVNOs (Mobile Virtual Network Operators) are going one step further and introducing initiatives that use the revenue generated from customer bills to give lands and forests back to the wildlife. Telecoms can use this principle to create differeating propositions – for instance, giving customers the choice to convert unused data allowances to funds to a charity of their choice. Such initiatives can make a difference to the environment and appeal to environmentally aware customers while providing the same level and quality of signal coverage.

Fostering green culture

Optimising business operations and delighting customers is a great way to win loyalty and tick an ESG commitment box, however the culture of change needs to start within the company. Just as relying on 2G and 3G legacy networks can hinder organisation’s sustainability initiatives, having engineers that are still set in “old ways” or don’t have appropriate training to operate new and green systems can have the same effect internally. Investing in reskilling programmes and ensuring the board is fully behind the green change can help boost the company’s morale and commitment. Engaging with the workforce and collaboration are equally essential for efficient sustainability practices.

Until recently, telecoms provider CEOs were reluctant to make sustainability their top strategic priority, seeing it as a cost topic best left to internal sustainability departments. However, ESG is a strategic topic with substantial Return-on-Investment (ROI) that can save costs, open new product offerings and win customers, whilst directly contributing to the global sustainability pledge. Thankfully we have seen sustainability rise to the top of the telecom agenda, but the most important thing for the industry is now to ensure follow-through.

As 83% of C-Suite executives believe that ESG commitment from companies will generate more shareholder value in five years’ time, telcos CEOs will need to prioritise sustainability within their business operations – a shift in thinking from the initial conversation about emissions. The time to act is now, and telcos that are unable to keep up will suffer long-term. We can expect to see MVNOs, with their greater capacity for flexibility, come to lead the charge in this area imminently.

About the Author

Kelvin Chaffer is Chief Operating Officer, Lifecycle Software. We’ve been breaking new ground in telecoms for over 25 years, providing end to end solutions for MNOs, MVNOs, IoT providers and a range of partners. Lifecycle Software shapes how some of the more successful telecom players in the UK provide their services. Our solutions process more than 3 billion transactions per month for over 2.7 million SIMs.

Featured image: ©Kriang