Energy efficiency is now an exec priority, so what does that mean?
Rising energy prices focus the mind
The rapid increase in global energy prices since the turn of 2022 — sharply affected by the Russia-Ukraine War since February — has pointed an even greater spotlight on 5G energy and sustainability. At this year’s Mobile World Congress in Barcelona, major wireless equipment vendors such as Ericsson, Huawei, and Nokia highlighted 5G portfolio announcements that emphasized the generation’s superior energy efficiency and sustainability, and indeed, recent IDC conversations with European CSPs underlined the fact that energy efficiency is a top priority for most network operations executives.
5G networks are incredibly high-performance systems that can serve wireless bandwidth of up to 1 Gbps at ultra-low response rates (latency) of less than 20ms to thousands of densely connected devices (phones, things, machines). This massive performance uplift versus 4G is achieved with a powerful 5G RAN infrastructure that can include densely packed 64x or 128x massive MIMO (mMIMO) antennas (by comparison, 4G typically has 4x or 8x mMIMO antennas); denser network architectures with more cell sites in urban areas; and much "fatter" fiber backhaul/fronthaul networks that shuffle traffic between the RAN and core networks, among other things. These powerful features can make unoptimized 5G networks voracious energy beasts: a GSMA study cited Huawei research that 5G cell sites needed up to three times more energy than their 4G equivalents.
Of course, 5G networks support many new and existing energy-reducing features such as smart sleep mode, beamforming, C-RAN and a much more flexible architecture. These energy-saving elements make 5G a much more energyefficient technology per unit of mobile traffic versus 4G. This is a key point that is readily seized on by mobile infrastructure vendors to encourage CSPs to accelerate their 5G investments and deployments. But there is a bit more to the 5G energy and sustainability debate than just how efficient it is on a perbit basis or how much it can reduce carbon emissions in other industries.
First, mobile data traffic has been growing at more than 40% over the past few years and looks set to continue its exponential growth. In its latest mobility report, Ericsson estimates that global mobile traffic will increase by a factor of 4.6 over the next five years, from 80EB in 2021 to 370EB in 2027, 80% of which will be video related. So while 5G is much more efficient per bit, CSPs will move a lot more data bits through the air, which along with the higher density of base stations (due to higher carrier frequencies) will require a lot more energy than previous generations.
Second, mobile operators are deploying 5G networks on top of existing 4G (and often 3G and 2G) networks. Over a third of all mobile traffic in 2027 will still be carried over 3G and 4G networks. This means CSPs will typically have to spend on energy to power new 5G networks as well as existing 3G/4G networks in parallel for many years to come, which will also mean continued upward pressure on energy use and spend.
So given this broader context, what can CSPs do about this issue?
CSPs need to pull three 5G sustainability levers
IDC believes CSPs must ensure they lead the 5G energy and sustainability debate by focusing their efforts on three key areas:
- Establish C-suite accountability for accelerated 5G energy efficiency and sustainability
- Partner with 5G equipment vendors
- Define 5G sustainability impacts to stakeholders (regulators, investors, customers, partners) in a credible and realistic framework
Whilst leading European CSPs, including Vodafone, BT, Telecom Italia, and Telenor have announced bold targets to achieve net-zero emissions by 2030, the task of reducing energy consumption in the short term almost entirely falls to network operations executives, whose agenda includes competing priorities of accelerating 5G deployments, maintaining network performance, lowering operating costs, reducing legacy network complexity, and supporting broader CSP transformation. Delivering more substantial energy savings requires concerted effort — and investment — to transform and upgrade network operations processes and equipment so they can minimize energy use per bit of traffic carried while maintaining or improving network capabilities and performance.
Such accelerated energy efficiency focus and investments need accountability from CSP C-suite executives to succeed. This is not always the case today given the current financial situation of the telco sector in Europe. A case in point is the switch to green and renewable energy to power mobile networks, including solar and wind, which often requires substantial focus and investment in new renewable energy infrastructures. For example, T-Mobile US announced in January 2022 that it reached its 100% renewable energy target at the end of 2021, one of the first in the world to do so. But this required a concerted effort over three years since it was announced in 2018 by then-CEO John Legere. At the time, the company said that this was not just the right thing to do, but it made excellent business sense, suggesting that it would save $100 million in energy costs in the next 15 years.
Second, CSPs must work much more closely with vendor partners, 5G equipment providers, and software vendors to improve the energy efficiency of equipment and monitor how they deliver on it. Leading 5G infrastructure vendors in Europe such as Ericsson and Nokia offer comprehensive energy optimization frameworks that focus on planning, deploying, and operating 5G networks to greatly reduce energy footprint without impacting performance. IDC is aware of only a few CSPs that have established commercial incentives for strict 5G energy efficiency targets on the equipment they procured to make sure vendors deliver on it. Some energy management specialist vendors can help with this task as well.
Finally, CSPs must take a decisive but realistic and credible position on potential of 5G for "downstream" energy reductions. These refer to energy saved and carbon emissions prevented in other industries via 5G use cases that can reduce carbon emissions. There is very little doubt that high-performing 5G networks are set to enhance existing use cases and enable new ones in different industries from manufacturing to transportation, energy, health, and agriculture that will minimize the need for people to move to specific locations and optimize the efficiency of assets, resources, and workforces in many ways depending on the vertical and enterprise. But the 5G downstream industry and societal impacts sustainability estimates must be realistic in order to be credible. There are, for example, highly optimistic estimates that 5G can help achieve a fifth of carbon reduction targets in some markets by 2025, even though many operators are just starting to get to grips with standalone access (SA) and network slicing technologies that are critical for many such use cases.
To sum up, sustainability will remain a major focus area for CSPs in 2022 and beyond and 5G networks’ energy use is a major issue in this debate. While European telcos net-zero goals to 2030 and beyond are worthy commitments, CSPs must clearly do more now. To this end, they can establish senior C-level accountability on this issue, work much more closely with vendor partners, and set realistic targets on downstream 5G sustainability gains.