European telecoms are adopting green initiatives and investing in energy-efficient technologies and renewable energy sources.
A combination of facts such as economic pressures, regulatory requirements, and stakeholder expectations are driving this.
IDC, in a recent report, highlighted that European telcos are motivated by rising energy costs, which have seen significant increases in recent years.
Orange’s energy expenditure rose from €579 million in 2021 to €1.0 billion in 2023 reflecting the rise in data consumption and the need for robust network infrastructure.
Telcos are offering services and solutions to help customers reduce carbon emissions and minimize the use of raw materials.
European telcos are investing heavily in energy-efficient technologies and renewable energy sources to manage rising operational expenses. For example, TIM (Telecom Italia) has set targets to source 100 percent renewable electricity by 2025.
Telecom operator Vodafone says energy use by its mobile access network, fixed-line network and technology centres accounted for 93 percent of total global energy consumption across all operations.
Vodafone purchased 81 percent of its energy from renewable sources in fiscal year ended in March 2023, up from 77 percent the year before and 55 percent the year before that.
Vodafone says total energy consumption from operations was 5,217 GWh in fiscal 2024 vs 5,052 GWh in fiscal 2023. Renewable energy consumption from operations touched 3,504 GWh in fiscal 2024 vs 3,083 GWh in fiscal 2023. Vodafone says non-renewable energy consumption from operations was 1,713 GWh in fiscal 2024 vs 1,969 GWh in fiscal 2023.
Orange Spain relied on 50 percent fewer radio units it implemented ZTE’s UniSite+, which improves the capabilities of Radio Access Technology (RAT) and bands. In addition to that, Orange Spain cut back its network power consumption by 30 percent and operational costs by 50 percent, ABI Research said in a blog.
According to IDC’s Global Sustainability Readiness Index Survey, the primary driver (36 percent) for ESG and sustainability-related initiatives among telcos is to enhance access to capital. Notable examples include Orange’s €500 million sustainability-linked bond issuance and Telefonica’s €850 million green bond for financing energy-efficient network infrastructure.
MTN Consulting has analyzed data on network traffic, energy consumption, carbon emissions, and revenues for a group of 16 telcos.
The group of 16 telcos included represent over 40 percent of the global market, based on revenues. In 2022, the average telco carried 1.93 Petabytes of traffic per $1 million in revenue, up 37 percent from 1.41 PB/$M in 2020. In the 2020-22 timeframe, this group increased network traffic at an average annual rate (CAGR) of 13.8 percent, while their total energy consumption grew at a CAGR of 1.2 percent.
In 2022, telcos consumed 64.4 MWh of energy per Petabyte of traffic, down from 81.3 MWh/PB in 2020. This improvement is in line with the stated goal of both telcos and their vendors: to improve the network’s energy efficiency over time.
The average telco’s carbon footprint per unit of traffic also declined in the same period, from 110.8 millions of tons of CO2 equivalent (MTCO2e) per Petabyte in 2020 to 83.3 MTCO2e/PB in 2022, MTN Consulting said.
Sustainability Technology Value Framework
A notable aspect of IDC’s report is the introduction of the Sustainability Technology Value Framework. This framework outlines best practices and strategies that can help companies enhance their sustainability efforts and achieve measurable outcomes.
The framework evaluates a company’s effectiveness in creating business value through three pillars:
Company Performance: This pillar examines an organization’s infrastructure, operations, and processes aimed at minimizing environmental impact.
Examples include:
Minimizing GHG Emissions
Telcos aim to reduce greenhouse gas (GHG) emissions across three scopes: Scope 1 (direct emissions), Scope 2 (indirect emissions from energy production), and Scope 3 (all other indirect emissions in the supply chain). Tele2 stands out as the leading telco in carbon reduction, having achieved a 97 percent reduction in Scope 1 and 2 emissions since 2019, making it the first European telco to reach this milestone.
Upgrading Legacy Infrastructure
Telcos are investing in upgrading outdated network infrastructure with energy-efficient technologies such as 5G and fiber optics. Deutsche Telekom has completed the shutdown of its 3G network in Germany as of 2021 to focus on enhancing its 4G and 5G networks.
Tech as an Enabler
Examples include:
The use of IoT technology for environmental monitoring, resource conservation, smart grids, and pollution tracking to enhance sustainability and efficiency. In May 2024, Vodafone Germany used IoT and smart sensors to create digital twins of natural sites to monitor temperature, soil humidity, air pressure, and watering cycles of the trees.
Repair, Return, and Refurbishment programs enable customers to extend device lifespans and reduce e-waste via repair, return, and refurbishment services. In March 2024, Orange Belgium launched an online store for reconditioned smartphones, expanding its range of refurbished handsets to more than 8,500 units, reinforcing the operator’s commitment to a green and circular economy.
Tech4Good
Examples include:
Expanding Network Coverage to Rural Areas is aimed to increase digital access to bridge socio-economic gaps. With its two European FiberCos, Orange committed to expanding fiber coverage in rural areas, with an additional 5.1 million connections added as of the end of 2023.
Developing accessible services and platforms will empower underprivileged communities. BT aims to deliver full-fiber services to 6.2 million homes and businesses in rural communities and to help 25 million people in the U.K. improve their digital skills by 2026.
“European telcos are not only motivated by economic considerations but also by a commitment to regulatory compliance and the growing demand from investors and customers for sustainable business practices,” says Masarra Mohamed, senior research analyst at IDC. “Telcos are leading the way in integrating sustainability into their operations and offerings, aiming to reduce their environmental impact while ensuring long-term economic viability.”
Baburajan Kizhakedath
