Mobile Network Power Struggles

The most meaningful growth in mobile networks over the next few years will come from emerging markets – regions where wireless services are just now becoming available. Of the more than 1.5 billion new subscribers expected to come from emerging markets by 2015, nearly two thirds of them live in remote parts of the world, where access to electric grids isn't always guaranteed.

Makers of base station equipment are under increasing pressure to develop and deliver solutions that not only can be deployed in areas that are off the grid, but also offer improved energy efficiency. The most widely deployed solution now in use – base stations equipped with diesel-powered generators – requires regular and costly refueling and a high level of maintenance. They also are prime targets for theft.

The need for greener base stations isn't limited to developing markets. As energy costs continue to soar, operators in all markets will be looking to shave opex with equipment that's less power-hungry.

As the latest issue of Unstrung Insider details, solving the power issue is crucial to maintaining the growth of the mobile phone industry. "Mobile Networks Go Green: The Lean Base Station" examines the opportunities for using alternative energies – such as solar, wind, biofuel, hydro, and fuel cells – to power radio sites in remote areas.

The market is huge: Around 1 million new base stations alone will be required to extend service to rural areas in emerging markets. All major base station vendors, including Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Nokia Networks , and Motorola Inc. (NYSE: MOT), already offer at least one alternative-energy-powered solution. Some offer more.

From a technology perspective, lean base stations are absolutely essential for the adoption of alternative energies. Vendors have gone to great lengths to lower the overall power consumption of their radio sites and increase their energy efficiency by as much as 70 percent in some cases. All major makers of base station equipment have introduced new system designs and components across their array of wireless technologies, including GSM, UMTS, CDMA, and WCDMA. Remote radio heads mounted next to antennas dramatically reduce power loss through feeder cables. The same holds true for standby-mode systems that shut down units during off-peak periods.

Going green does present challenges, cost being one of the greatest. Although competition and advances in manufacturing technology are driving solar panel prices down, they're still too high for many operators in developing markets and could impede deployment of mobile services, at least in the short term.

Theft is another huge problem. Diesel and the generators it powers are already frequent targets of theft in countries where utility-delivered electricity is unreliable or nonexistent. And as the popularity of solar technology grows, so does the market for stolen panels. Operators will need to invest in physical site security, which will further drive up the cost of delivering service.

But even with all those costs and challenges, mobile networks will remain the fastest and least expensive way to extend telecom service to emerging and developing regions. Leaner, greener base stations will make that happen sooner rather than later.

– John Blau, Research Analyst, Unstrung Insider

The report, Mobile Networks Go Green: The Lean Base Station, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.

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