Preparing for the Coming Storm: Winter is coming and with it the real-world repercussions of painfully shortsighted energy policies. I’ll leave the finger pointing to the political pundits. You and I, however, will need to find solutions for the soaring network OPEX. Before we dig into the details it’s worth getting a clear picture of where we are in terms of the severity of the problem.
On September 26th Reuters released a story regarding the energy crisis and how it impacts the telecom industry. Reuters cited a joint statement released on behalf of many of the CEOs of Europe’s biggest telecom providers. The text encouraged tech giants like Google and Amazon to help bear the burden of ever-increasing energy prices.
"Costs of planning and construction works are increasing. Prices for fiber optic cables, for example, have almost doubled in the first semester 2022. Similarly, the hikes in energy prices and in the prices of other inputs are also hitting the connectivity sector," they said. The rationale is that because Google, Meta, Amazon, and Netflix comprise more than half of Europe’s internet traffic they should pitch in to cover the soaring costs.
Consumers Getting Hit Hard
Passing costs along may work for telecom infrastructure providers, like mobile tower operators whose customers have little or no options for alternatives but that is likely not the case for fully integrated mobile and fixed telecom operators. Those providers will have a much tougher time squeezing the end consumer for money when they are already being hit hard from every side just to cover the cost of their monthly essentials.
A September 6th Fortune article warned that European households may be faced with winter energy bills 300% higher than last year’s. Inflation in the eurozone jumped to an all-time high of 9.1% in August according to the latest data released by Eurostat. Energy costs combined with massive government spending in response to the Corona lockdowns are thought to be the key culprits behind the global inflationary uptick.
In the United States, the August inflation rate was 8.3%. That’s way up from May 2020’s low of 0.1%. Increased energy costs impact all commodities. Consumers are taking the hit at the gas pump as well as the grocery store. The Bureau of Labor Statistics recently released a report stating that household grocery costs had seen their largest annual increase since March 1979. CNN reported that every key item on the average consumer’s grocery list now costs substantially more. Flour for example is up by 22%.
Energy Costs Hit Communication Service Providers
A jaw-dropping new forecast by a leading telecom vendor warns that annual energy costs associated with running the world’s mobile networks will top $25bn. Others in the know are suggesting that the final number will be far north of the $25bn estimate.
In a recent media appearance an Industry spokesperson said “The ongoing energy crisis has resulted in increased and volatile energy prices, and we are seeing short-term large impacts in certain areas, like Europe. What we can expect is that with the current energy crisis and inflation, the previous already high cost to operators - should be expected to increase further”.
Bearing the financial burden of a three-fold increase in energy costs YoY, Massimo Sarmi, head of Italy’s Assotelecomunicazioni recently reached out to the EU industry Chief Thierry Breton asking that telecoms be categorized as energy-intensive industries. That new designation would provide telecoms with access to potential energy cost relief as well as protection from looming power cuts.
"Companies in the telecoms sectors continue experiencing increases of energy supply costs, while they must ensure continuity to their services", Sarmi stated. "A clear indication of the impossibility for telecoms network to be disconnected...would give much needed certainty to telecoms players and to the whole economic system over the service continuity".
Winter is coming and the war in Ukraine continues without any end in sight. Increased energy demand and diminished supply lead to one unpleasant inevitability – ever-increasing energy costs.
Start Cutting Costs by Cutting Out the Copper
Reducing network energy costs requires a holistic approach. It’s not just about adding or removing a specific hardware component. Real, significant, and quantifiable energy reduction is possible with a combination of equipment and operational changes that leverage new more efficient technologies.
A good place to begin is by removing the need for costly copper cables from your 5G network expansion plan wherever you can. The cost of mining, processing, shipping, and installing copper cable is enormous, not to mention the unnecessary weight burden it places on towers due to its density. The move from split mount to all-outdoor units or DCSG virtual split mounts, allows operators to cut out the copper costs from the equation entirely. The all-outdoor or virtual split mount configuration utilizes lighter, more affordable, and longer-lasting fiber to connect the radios in the tower to the rack in the shelter below instead of copper.
Less is More… Savings
Moving to an all-outdoor wireless transport solution like Ceragon’s IP-50C delivers several other substantial energy savings opportunities. Removing the need for a dedicated Indoor Unit (IDU) means one less device to power, one less device to cool, one less device to take up space in an already crowded rack… it’s kind of like kicking out a roommate who never pays their share of the rent, always leaves the lights on, and loves to finish off your favorite cookies.
You can multiply your savings further by adding a clever 2-in-1 device like Ceragon’s IP-50FX. The Telecom Infra Project (TIP) compliant Disaggregated Cell Site Gateway (DCSG) delivers the full functionality of a layer 3 cell site router (CSR) plus a virtual radio indoor unit (IDU). The virtual IDU pairs perfectly with the all-outdoor solution providing operators with the energy-saving benefits of full outdoor plus the flexibility and functionality operators are used to with a traditional split mount configuration.
Multiply the energy savings gained by needing to house, power, and cool fewer devices, and the literal ‘tons’ of copper cables eliminated across thousands of cell sites, and that all adds up to significant energy savings and cost cuts. That’s great news for European operators concerned about meeting their 2030 climate target plan goals.
Up Your Operational Efficiency with AI
Adding Artificial Intelligence (AI) and Machine Learning (ML) capabilities to your network operations can vastly increase efficiency further driving down energy costs. Employing a Network Management System (NMS) enables operators to automate and optimize network efficiency.
Utilizing an NMS with AI capabilities allows operators to accurately assess complex traffic patterns. The AI can be used to automate the activation of additional radios during hours of peak traffic demand and deactivate radios during slower periods.
Automating the intelligent nightly shutdown of thousands of radios across a network equates to an enormous energy reduction and cost savings. In addition, there is the added benefit of prolonging the operational life span of expensive equipment.
Want to learn more about reducing your network’s energy costs and increasing sustainability?
Talk with a Ceragon Energy Expert Today