Opportunities in Green Telecom Tower Market

June 2011

Sagar Gubbi
Managing Partner Ecoforge Advisors Pvt Ltd, Bangalore, India sagar@ecoforge.in +91-97312-02201
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Telecom Revolution in India

Source: Telecommunications, India Brand Equity Foundation (IBEF) and Ernst & Young (E&Y), April 2010
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Telecom Revolution in India: Market Growth

Massive growth in telecom subscribers in India in the last decade.

.driven by large increases in wireless subscriber base

Green Telecom Towers, Jun 2011

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Telecom Revolution in India: Market Growth

Market growth characterised by large urban growth in initial years but driven by rural growth in recent years

And huge growth in the number of telecom towers deployed

Green Telecom Towers, Jun 2011

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Operator Market Shares: Wireless

Source: TRAI, March 2011

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Market Players

Tower Companies Mobile Operators

Telepower Vendors Telecom Equipment Vendors Handset Makers

Green Telecom Towers, Jun 2011

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Industry Trend 1: Future Growth in Rural Markets

Source: TRAI, Dec 2010 & March 2011

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Industry Trend 2: Falling ARPUs and MoUs

Source: TRAI, Dec 2010

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Industry Trend 3: Infrastructure Sharing

Infrastructure sharing has been a relatively new segment, which witnessed significant investment in the past 4 years. While rising infrastructure costs, falling revenues and increased debt burden of mobile operators were the driving force behind infrastructure sharing, the key trigger for infrastructure sharing has been the Mobile Operator Shared Tower (MoST) initiative implemented by the DoT in 2006

Source: Indian Telecom Tower Industry, ICRA, Feb 2011

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Industry Trend 4: Large Diesel Costs and Carbon Emissions

Source: Dirty Talking, Greenpeace India Society, May 2011

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Telecom Tower Infrastructure Industry Overview

Infrastructure Sharing can be broadly classified into two groups: Passive Elements Sharing Active Elements Sharing

Passive infrastructure sharing (tower-sharing): Passive infrastructure being one of the most important components of a mobile network, the same has been a critical area of operations for telecom companies in the past

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Telecom Tower Infrastructure Industry Overview

Telecom tower companies in India are of 3 types: Tower companies formed through joint ventures like Indus tower which is a joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular Tower companies formed though de-merger such as Bharti Infratel and Reliance Infratel which are wholly owned subsidiaries of Bharti Airtel and Reliance Communications respectively Independent tower companies such as GTL

Tower company
Indus Towers Reliance Infratel BSNL / MTNL Viom Networks Bharti Infratel GTL Infra Others Total

No of towers
110,000 52,000 52,000 38,000 34,000 33,000 51,000 370,000

Source: Industry/Media Reports & Ecoforge Research, 2010

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Telecom Tower Company Responsibilities

Site planning, keeping in view the network rollout plans of prospective customers. Obtaining of necessary regulatory approvals. Erection and commissioning of tower and allied equipment. Provision of support services such as back-up power, air-conditioning and security. Provision of turnkey solutions to telecom companies such as sourcing of equipment, testing and maintenance.

Source: Indian Telecom Tower Industry, ICRA, Feb 2011

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Telecom Tower Power Scenario: Grid Availability

As per some estimates, about 20% of Indias 370,000+ telecom towers are currently located in off-grid areas A further 20-25% of towers are located in unreliable grid areas Completely off-grid towers typically run on diesel generators for 18-20 hours a day and on batteries for the remaining hours of the day Towers in unreliable grid areas run on grid power for 8-10 hours a day, diesel generators for 8-10 hours and batteries for the remaining hours of the day All telecom towers in India face power cuts for some hours of the day, with urban towers facing power cuts for 2-3 hours per day on an average
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Indoor versus Outdoor Base Transceiver Systems (BTSs)

Telecom Tower Power Scenario: BTS Type

Indoor BTSs are of older type that require airconditioning to operate. Typical power consumption for a single indoor BTS is 5-7 kW (DC power for the BTS and AC power for the air-conditioning) Outdoor BTSs are of newer type that dont require airconditioning to operate. Typical power consumption for a single outdoor BTS is 1-1.5 kW DC power only

Switching capacity of the BTS

BTSs Higher call switching capacity (3x3x3 or 4x4x4) BTSs need more power than BTSs with lower switching capacity

Shared Towers
Shared towers with 2-3 indoor BTSs require 12-16 kW of power (DC and AC) whereas shared towers with outdoor BTSs require 3-5 kW

Backhaul/Hub towers typically require higher power but they are small in number when compared to regular towers
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Telecom Tower Power Scenario: Green Power

Solar hybrid solutions are suitable (both technically and economically) for shared towers housing 2-3 outdoor base stations (with total power requirements of 3-5 kW) Telecom towers with higher power requirements (either indoor base station types or backbone towers with more energy consuming equipment) might not be suitable for solar hybrid solutions due to:
high initial capital expenditure to install solar panels larger ground area requirements for solar panels which is typically not available in telecom tower real estate (which typically covers a 10 metres by 10 metres rented land area)

In some regions, wind-solar hybrid solutions are also being trialled Fuel Cells are also being trialled both as standalone power sources and as alternatives to batteries
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Green Telecom Towers, Jun 2011

Green Telecom Market in India: Current Scenario

All the top tower companies in India have trialled green solutions at their offgrid/unreliable grid towers and are now setting up green energy/energy efficient solutions at several of their towers Subsidy available from MNRE for green telecom towers under National Solar Mission Universal Service Obligation (USO) Fund, managed by the Department of Telecoms (DoT) might also announce funding for green telecom towers Vendors such as Applied Solar, Acme Telepower, Idatech etc are deploying solar hybrid and fuel cell solutions at several telecom towers Energy efficient solutions such as free cooling and DC-DG are also being implemented at thousands of towers

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Green Telecom Market in India: Current Scenario

International Finance Corporation (IFC), the private sector financing arm of the World Bank, invested a large USD 21 Million in equity in Delhi-based Applied Solar, whose primary business is to provide solar hybrid solutions to telecom towers Some of the recent public announcements/articles on solar telecom towers in India are listed here: http://www.gsmworld.com/ourwork/mobile_planet/green_power_for_mobile/index.htm http://articles.economictimes.indiatimes.com/2010-10-22/news/27624636_1_solarpower-cell-towers-telecom-towers http://www.indiaprwire.com/pressrelease/computer-electronics/2010120370426.htm http://dealcurry.com/20100422-IFC-To-Invest-21-Mn-In-Applied-SolarTechnologies.htm http://panchabuta.wordpress.com/2011/03/04/cellphone-towers-in-tribal-and-hillyrural-areas-to-be-powered-by-solar-says-indian-minsiter-of-state-for-telecom-sachinpilot/ http://panchabuta.wordpress.com/2010/05/17/indian-government-may-ask-telecomcompanies-to-install-solar-panels-to-generate-backup-power-for-cellphone-towers/ http://panchabuta.wordpress.com/2011/02/21/400-telecom-towers-to-be-poweredunder-the-jawaharlal-nehru-national-solar-mission-jnnsm-solar-at-a-cost-of-rs-1-2-bn/
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Green Telecom Market in India: International

Bharti Airtel is now in 16 African countries with the acquisition of Zains assets in March 2010 Indian vendors such as ACME Telepower have followed Bharti Airtel to Africa Markets such as Nigeria, Kenya, Indonesia and Philippines, which are similar to what Indian market was 3-4 years ago, offer great opportunities for Indian vendors

Source: GSMA, 2010

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For Further Details..

Contact us at:

Sagar Gubbi Managing Partner Ecoforge Advisors Pvt Ltd, Bangalore sagar@ecoforge.in +91-973 120 2201