Rising heatwave could set AC costs of telecom towers soaring

Rising temperatures in many parts of India are set to inflate air-conditioning costs at telecom tower installations, crucial for ensuring uninterrupted operations of base stations for 24x7 mobile connectivity, industry executives and analysts said.

They added that power and fuel costs of telecom operators could potentially rise if heatwave conditions persist for the next one month as any change in energy costs is typically passed on to telcos by tower companies.

Industry experts cautioned the current scenario could also lead to a slowdown in tower network expansions in the near term, even though Indian tower companies are used to working in hot weather conditions.


"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 (read: mobile base stations) in telecom towers, especially to ensure there are no connectivity/coverage hiccups," said Mohit Rana, a telecom expert who has worked closely with tower companies and is now partner at Red Seer Strategy Consultants, told ET.

Power and fuel, used for running telecom towers, comprise 45-55% of a telco's annual network operating cost, of which diesel makes up about a third at pan-India level. Network operating cost make up about 20-24% of sales of a telco.

Diesel forms part of a telco's energy bill that includes electricity costs (for grid support) and battery costs.

Analysts noted if oil companies raise diesel prices post general election, telcos could face a double whammy, potentially impacting margins unless the current hot spell abates.

A senior executive at a Big 3 telco, though, downplayed concerns around a prolonged heatwave impacting tower network rollouts, saying the latest category of monopole towers are designed to withstand intense heat conditions up to 55 degrees Celsius.

"Field units of telcos and tower companies are used to working in gruelling heat, and the increasingly popular monopole towers are equipped to operate seamlessly in extreme weather conditions, which is why, the chances of tower network expansions getting impacted are slim," the executive said.

India's top two telcos, Reliance Jio and Bharti Airtel have concluded their pan-India 5G rollouts. Cash-strapped Vodafone Idea (Vi), in contrast, plans to start 4G expansion and greenfield 5G rollouts in key markets only after its closes its targeted ₹45,000 crore fundraising.

"By the time, Vi closes its fundraise, the current heatwave should subside, ruling out the possibility of its upcoming 4G expansion and 5G rollouts getting seriously impacted," said a second senior telecom industry executive.

Bharti Airtel, Reliance Jio, Vi, Indus Towers and Digital Infrastructure Providers Association (DIPA) did not respond to ET's queries.