Rural base station operations price 35% extra – Telcos

Telecommunication firms face important price pressures when deploying and working base stations in rural areas, spending a mean of 35 per cent greater than in city places.

GSMA, the worldwide trade physique for telcos, disclosed this in its November report.

The doc titled “Rural Renewal: Telcos and Sustainable Power in Africa”, indicated the financial pressure related to rolling out networks in areas with low inhabitants density.

The important thing challenges embody greater vitality prices, elevated bills for backhaul infrastructure, and the necessity for strong towers and civil works.

A key discovering of the report revealed that “a base station in a distant rural space prices, on common, 35-40 per cent extra for an operator to run than in a metropolis, although this may be greater in some nations.”

The report added, “The upper vitality prices largely come from having to make use of diesel the place grid entry is usually patchy or nonexistent, that means low electrification charges.”

Additional, GSMA emphasised that adopting renewable vitality options might help mitigate the excessive vitality prices related to rural base stations.

“Bettering vitality entry and embracing renewable applied sciences might help telcos scale back prices and speed up rural community growth,” the report added.

Backhaul infrastructure, important for connecting rural base stations to core networks, stays one other main price driver.

Backhaul prices in rural areas are 110 per cent greater than in city places, in accordance with GSMA, largely because of the challenges of laying fibre over huge, sparsely populated areas.

The mixed pressures of vitality and backhaul prices proceed to hinder the profitability of rural community deployment, limiting the flexibility of telcos to broaden connectivity in underserved areas.

In keeping with the Nationwide Bureau of Statistics, diesel costs averaged N1,426.09 per litre month-to-month, with telecom operators consuming over 50 million litres of diesel every month to gasoline their infrastructure.

An evaluation by The PidomNigeria in October revealed that main telcos, together with MTN and Airtel, spent an estimated N71.3bn month-to-month on diesel, amounting to a staggering N570bn over the eight months from January to August 2024.

These rising prices have intensified the pressure on operators’ revenue margins, notably in rural areas the place grid entry is restricted and diesel turbines stay a major energy supply.

In response to those challenges, main telecom firms are more and more shifting their focus to renewable vitality sources similar to photo voltaic, wind, and lithium batteries.

This transition goals to cut back operational prices and promote sustainability, notably in areas the place diesel reliance has develop into unsustainable.

The Chief Technical Officer of Airtel Nigeria, Harmanpreet Dhillon, stated the operator is concentrated on increasing grid connectivity and deploying various vitality options throughout its operations in Nigeria.

“A very powerful issue for us right here in Nigeria is the grid,” Dhillon said. “Our first purpose is to attach all of our websites to the grid, as lots of our base stations at the moment lack grid connectivity. As soon as we obtain this, we’ll scale back our reliance on turbines, which in flip will lower down our diesel consumption.”

The cellular operator is working carefully with energy distribution firms to make sure constant grid availability at its websites. “With the grid in place, our turbines will function much less continuously, immediately decreasing our environmental impression,” he stated.

In September, a senior telecom govt, who requested to stay nameless, revealed to The PidomNigeria that telecom large MTN, with about 80 million subscribers, spends over N30bn month-to-month on diesel to energy its roughly 25,000 base stations.