Rising temperatures in India are driving up air-conditioning expenses at telecom towers, potentially leading to a 3-5% increase in power and fuel costs for telcos. The heatwave conditions may hinder mobile connectivity and slow down tower network expansions. The increasing temperatures in many parts of India are expected to raise air- conditioning expenses at telecom tower installations. These installations are critical for ensuring uninterrupted operations of base stations for 24×7 mobile connectivity.
How the heatwave can be a hurdle for mobile connectivity?
Industry experts have also warned that the current scenario could also slow down tower network expansions in the country in the near term. It’s also important to note that Indian tower companies are already accustomed to working in hot weather conditions.
A telecom expert who has worked closely with tower companies and is now a partner at Red Seer Strategy Consultants, Mohit Rana said: “If the intense heatwave conditions don’t ease anytime soon, causing a serious rise in ambient temperature, telcos could face around a 3-5% increase in power and fuel costs towards effective air-conditioning of active infrastructure elements”.
Fuel price hike can be concerning for telcos
The expenses for power and fuel, which are essential for running telecom towers, account for 45-55% of a telco’s annual network operating cost. Diesel accounts for nearly a third of this cost at the pan-India level. The network operating cost represents about 20-24% of a telco’s sales.
Apart from diesel, a telco’s energy expenses also include electricity costs (for grid support) and battery costs. As per the report, analysts have claimed that if oil companies increase diesel prices after the general election, telcos may face a dual challenge. This can potentially impact the margins of these companies unless the current hot weather subsides.
