New Delhi: Surging power demand in peak summer and hiked prices of diesel, used to run generators during outages, are fanning telecom and tower companies' concerns. The industry has warned that unreliable grid power could hit mobile network services and raise operating costs, prompting the department of telecommunications (DoT) to step up action to ensure uninterrupted supply to tower sites.
The issue of power availability, an ongoing concern for the tower companies, has been raised by the industry at multiple meetings with the DoT.
Last week, the department held a meeting with the telecom industry executives to map the issues with regard to availability of electricity across states and how the electricity distribution companies (discoms) could ensure continuous power supply so that telecom services are not affected, according to two people in the know. The department has also taken up the issue with the power ministry, they said.
Diesel price hikes raise costs
To be sure, tower companies rely on diesel generators to maintain the network uptime during power cuts at telecom tower sites. They buy diesel at retail prices and pass on the fuel and power expenses to the telecom operators.
Now, the issue assumes significance as the fuel's prices are rising due to disruptions of the West Asia war, and its supplies have also been hit. Diesel price was last week hiked by ₹3.90 per litre to ₹91.58 in Delhi. And the summer season peak power demand has increased the risk of electricity shortages and outages were reported in some parts of the country.
Moreover, amid the Centre's call for work from home to save on fuel consumption, many companies and government departments are shifting to work from home for a few days of the week. This entails an increase in network workload, and telecom operators also need to ensure service quality.
According to brokerage house IIFL Capital, energy costs account for 10-12% of India mobile revenue for telecom operators. Industry estimates suggest that the ₹3 per litre, or 3%, increase in diesel price would cost the operators about ₹300 crore annually.
“While the diesel price hike would increase the burden on the industry, the root cause and the immediate mitigation strategy must be fixing the power sector's inefficiency to maximize reliable grid power," Manoj Kumar Singh, director general of the Digital Infrastructure Providers Association (DIPA), told Mint. "Doing so would address an avoidable diesel consumption altogether.” The association represents tower firms such as Indus Towers, Ascend Telecom Infrastructure and Altius Telecom Infrastructure.
Singh argued that the industry is using diesel only as a "consequential effect" of power outages, and if there is no power outage for telecom towers, there will be no diesel use.
Electricity being a concurrent subject and supply/distribution of electricity to all consumers is done by the respective state governments or state power utilities. Among the key states flagged by operators as those having power availability issues are large ones such as Uttar Pradesh, Maharashtra, Madhya Pradesh, and Punjab.
Queries emailed to the DoT, the power ministry, and the Cellular Operators Association of India (COAI) that represents private telecom operators did not elicit any response until press time.
One of the key issues faced by tower companies is that there is a common feeder link to supply power to households and to the tower sites. The industry has also asked the government to ensure discoms give clear-cut time slots for outages, as they have not shown accountability on that aspect.
“The ask has been for reliable power availability. There are areas where outages happen for long hours and there is no diesel availability in those areas; the batteries get discharged. The industry has sought a clear-cut outage timing and division of that outage during parts of the day,” an industry executive working with a tower company said on the condition of anonymity.
This person said it is also the discoms' responsibility to be vigilant if the outages are affecting network and tower sites, and also to maintain communication with field executives of tower companies for better planning.
There are still challenges in reliable power supply, particularly during non-solar hours in rural areas, said Arun Goyal, a former member at the Central Electricity Regulatory Commission (CERC). He stressed on the need for huge investments in distribution infrastructure.
Goyal said a separation of agricultural and domestic supply feeders can enhance reliability of power supply in rural areas and some states are already implementing schemes for separation of feeders.
On Thursday, the peak power demand in the country hit a record high of 270.6 GW amid severe heatwave conditions.
Under the Electricity (Rights of Consumers) Rules, 2020, discoms are required to provide 24x7 power supply to consumers. However, state electricity regulatory commissions may specify lower supply hours for certain categories of consumers such as agriculture.
Diesel alternatives
To be sure, telecom operators and tower companies have long been reducing their dependence on diesel-run generators to lower their operating costs and reduce carbon emissions.
“We added close to 2,500 sites with solar access during the quarter, taking the overall sites to about 42,400. Diesel consumption on our sites reduced by about 7% year-on-year in Q4 FY26," said Prachur Sah, managing director and chief executive officer of Indus Towers during an earnings call this month. "This is despite 6% year-on-year increase in co-locations and continued equipment loading on the sites.”
Indus Towers' parent company Bharti Airtel too said during its quarterly earnings call that it is significantly reducing dependence on diesel by transitioning towards high-powered batteries and renewable power for cost efficiencies.
Vodafone Idea highlighted diesel usage cut as a key cost control strategy. Over the past few years, the company has focused on increasing electrification of its network to reduce dependence on diesel, chief financial officer Tejas Mehta said during the Q4 earnings call.