Business Drivers & Strategies for Green Energy In indian Telecom New Delhi January 28 ,2011

Business Drivers & Strategies for Green Energy In indian TelecomNew Delhi

January 28,2011

Bharti Infratel

Sairam PrasadChief Technical Officer

Agenda

Business Drivers

Business Enablers

Energy Initiatives at Infratel

Technologies

Technology Penetration potential

Saving potential

Environmental Impact

Challenges

Solar Application In Telecom Sites

Sustainable

Business

Economic

Environment

al

Social

Positive Socio Economic & environmental sustainability is the key driver for

“sustainable business”

Business Drivers

Low Rural Affordability

Falling ARPU

Rising MOU

Increasing Market

competition

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0

100

200

300

400

500

600

700

800

900

1000980

882

735

490441

392343

253207

150

Indian ARPU

ARPU

Year

AR

PU

Belgi

um Italy UK

Fran

ce

Brazil

Philip

pine

s

Taiw

an

Argen

tina

Mal

ayas

ia

Singa

pore

Russi

a

China

Indi

a0

0.05

0.1

0.15

0.2

0.25Global trend for Call Rates

US

D/m

in

Average Revenue per user declined by 85% during last decade. India has lowest call rates globally.

Economic drivers – Market drivers

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 0

100

200

300

400

500

220192

245287

341368

434493 484

410

GSM MoU Trend

Year

Min

ute

s o

f U

sa

ge

Mal

yasi

a

Indones

ia

Thaila

nd

China

Singap

oreIn

dia0

50100150200250300350400450

197

61

376403

338

434Global trend for MoU

Min

ute

s o

f u

ser

Minute of usage increased by 86% during last decade. India is among countries with highest MoU.

2008 2009 20100

2

4

6

8

10

12

14

16

8

12

16Number of operators

No. of operatorsYear

No

. of

op

era

tors

Mal

aysi

a

Phillip

ines

Indones

ia

Thaila

nd

Singap

ore

China

India

0

10

20

30

40

50

60

70

46

6358

3643

52

37

EBITDA margin as (%) of gross service revenue

EB

ITD

A (

%)

Number of operators doubled in last 3 yearsnce 2008 India is amongst the countries with lowest EBITDA

Mar-09 Jun-09 Sep-09 Dec-09 Mar-100

20

40

60

80

100

120

13.64 15.35 17.22 19.95 23.08

81.4787.18

94.98103.2

112.03Teledensity

Rural

Urban

Tel

eden

sity

Urban teledensity is saturated & further subscriber addition to come from rural. Rural teledensity improvement is possible only with low cost solution, due to

lower affordability of rural people

Economic drivers- Energy Cost

Increasing Energy Cost

High dependency

on Diesel

EB Availability & quality

Regulatory

Souce: TRAI, KPMG

Power & fuel 25%R & M, 12%

Rent45%

Network Other cost18%

Network cost distribution

Energy cost as % of revenue is increasing while ARPU is decreasing. Power & fuel contributes about 25% of network cost

2008 2009 20100.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.0031.48

36.38 38.18Diesel price

Diesel priceYear

Rs

/lite

r

Diesel preice has increased by more than 20% in the last three years & is expected to rise further.

2 Bn litres of diesel has been consumed by telecom industry every year.

10% Telecom Towers: No Grid supply

50% Telecom towers < 12 hours of Grid supply

Poor EB quality like Low voltage,Single Phasing & Voltage fluctuation leading to DG run even while grid power is available

Poor Quality of grid supply in semi Urban & semi rural areas & no grid availability in rural areas.

National Solar Mission launched Soft loans @ 5% interest rate. 30% subsidy on capex invested for selected numbers. 90% subsidy for special category states and in other remote and

difficult areas

Reduction of carbon emission using Green technology fetches Carbon Credits .

USO Funds for use of renewable energy at remote sites

Social Drivers

India has committed to a reduction of 20-25% in carbon

intensity from 2005 levels by 2020 – India`s Commitment at Copenhagen

Increasing Rural footprint at affordable cost.

Optimization of available grid power

Enabling Local community participation.

Environmental Drivers

Key Environmental Drivers Include

CO2 emission reduction.

Noise pollution reduction.

Natural resource utilization.

Mitigation of global warming potential.

Close to 300K towers that consume more than 2 Bn Litres of Diesel every year generates 5.4 million Tons of CO2.

Enabler for Green & New Energy Initiatives

Corporate will

Reliable & cost effective technology

Potential to reduce carbon footprints

Stakeholder Agreement

Sustainable development

Strong corporate will supported by access to reliable, scalable & cost effective technology are key enablers.

Towering Your Telecommunications

Bharti Infratel is one of the world’s largest telecom passive infrastructure service providers, that deploys, owns and manages telecom towers and communication structures for all wireless operators

Having a big first-mover advantage in India, its

strong differentiator is of having service presence in

some of the toughest terrains and remotest rural

areas Provides best-in-class telecom infrastructure

services and a compelling capital investment saving opportunities to wireless operators

A Strong telecom heritage, coupled with deep

industry understanding and capabilities, people

and processes

Energy Initiatives at Bharti Infratel -P7 program

.

Green

Demand side

Energy Efficiency

Green Energ

y

In our endeavour to become more environmental friendly & energy efficient company we initiated P7 program.

Technology Penetration Potential

0

5

10

15

20

2525 25

21

1715

10

42

Percentage of sites qualified

Perc

en

tag

e

Green energy technologies Penetration potential can be improved substantially once prices reduce with more use.

Estimated Energy Cost Saving potential

Solar DG hrbrid

Wind DG hybrid

Community power

(Biomass)

DCDG Fuel cell FCU IPMS Fuel Catalyst0

10

20

30

40

50

60

70 65 65

50 50

39

15 13

5

25

32

50

25

10 128

4

Gross savings

Net savings (post in-vestment recovery)

Savings as % of present energy cost

%

• Huge Gross energy saving possible using Green Energy technologies.• Net energy savings using green energy technology can be improved with

possible reduction in pricing of green technology solutions.

Estimated Maintenance cost Saving

Solar DG hrbrid Wind DG hybrid Biomass FCU IPMS DCDG Fuel cell Fuel Catalyst0

5

10

15

20

25

30

35

40

45 41 41

20

107

0

18

0

% of present Repair ,Maintenance& Replacement cost

%

Upto 40% reduction in site Maintenance expenditure for tower companies using green energy technology

Environmental Impact

Solar DG hrbrid

Wind DG hybrid

Community Power

(Biomass)

Fuel cell DCDG Fuel Catalyst FCU IPMS0

5

10

15

20

25

3029 29

25

16 17

23 2

CO2 Reduction per site per year

MT

CO

2

Green energy initiatives have greater potential to reduce GHG emission.

High capex can be avoided & new technology performance can be guaranteed by looking at opex fee model from generated savings.

Local entrepreneurs can be encouraged.

High Initial Capex

Nascent Technology

Resistance by local stakeholder

Limited suppliers

Limited Operation Support Network

Seasonal Limitation

Suitability for low telecom Load

Challenges

Solar Energy Viability

2010 2011 2012 2013 201465

70

75

80

85

90

95

100

Year

$/b

arre

l

With decrease in PV panel prices due to volume increase & increasing diesel price, adaptability of Green Energy sites improves further in future.

Crude Oil Projection Solar PV Projection

Solar DG Hybrid System Over View Solar Panels:

3-8 KWp Mono & Multi-crystalline silicon.

VRLA Batteries (600 Ah-1200 Ah) : Prolonging battery backup New Battery instead existing ones

Hybrid Solar Controller (HSC) : Sophisticated controller for runhour

optimization Communication with centralized

Data Management Center. Data Management Center (DMC):

2-way communication with sites Data reporting. Escalation Alarms

Mostly rural site with offgrid /poorgrid qualify for solar deployment in telecom

Solar DG hybrid Battery usage profile

DG runs only during 1 am to 8 am for rest of time site is managed using battery & solar.

Data Management Center

Automatic NOC solution using GPRS & GSM modem at site to collect key parameters for remote monitoring & control

1 BTS site key Parameters

  Max Min Avg

DC load(kW) 1.5 0.8 1.2

Pre solar DGRH/day 22 19 20

Post Solar DGRH/day 8 4.5 6.1

DGRH reduced from 22 hrs per day to 8 hrs per day.Diesel consumption reduced from kl to kl per year.Co2 emission reduced from MT per yr to MT per yr.

DGRH per day Diesel Kltrs/yr Fuel Cost Pa (Rs/Lacs)

Opex Cost pa (Rs/lac )

Co2 emission (MT/pa)

0

10

20

30

40

20

125

1

29

6 4 1 0

10

Pre Soalr post Solar

P7 Key Benefits

P7 saves 57 mn liters of diesel per annum.

Reduces 165,000 MT of CO2 emission

per annum

25% Energy Cost Savings

Improved Profitability

Green Telecom

Customer satisfaction

Bharti Infratel is awarded Best Innovative Infrastructure Company of the Year Award, by Essar Steel-CNBC TV 18 for P7 Program

Thank You