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The baseline view of operators’ environmental potential for fiber and 5G rollouts

The baseline view of operators’ environmental potential for fiber and 5G rollouts

Fiber and 5G rollouts: a baseline view of operators' environmental potential

Many fiber rollouts are seen as key to sustainable and green technologies. Kagan recently Survey 101 telecom and 42 cable professionals across the globe, only 19% of the respondents specified that environmental impact was not a driver in the decision to upgrade to fiber, with 35% of respondents attached to European telcos and 38% to European cable operators. But technology alone will not be enough to reach environmental goals. Companies and governments still have a lot to do before they can create a holistic approach.

Kagan estimates Western Europe‘s fiber penetration at 22.2% for 2021 Sweden as high as 69.1% and Greece as low as 0.2%. Most countries in the region already have fiber plans. As rollouts pick up, our current estimate, which is based on existing plans will see penetration just shyof 50% by 2030.

Fiber is so much more efficient than other forms of fiber. A Study conducted in 2021 by Prysmian Cavi e Sistemi Italia Srl — an Italian telecom and energy cabling manufacturer also known as Prysmian Group — found that gigabit passive optical networks provide an 8.9% improvement in total energy consumption (MWh/year) when compared with VDSL-vectoring, and 36.7% versus hybrid fiber-coaxial. GPONs are energy efficient because they are passive and have no active optical elements between the central offices and the end customers. Fiber to the home point to point is 2.7% more efficient than VDSL. Although FTTH is more expensive than VDSL, the technology allows for greater product differentiation as well as individual line upgrades and higher performance.

Belgium‘s incumbent telecom company Proximus highlighted fiber’s environmental credentials, Noting that data transmission over fiber uses “up to 12 times less energy” than on copper. The firm also explains that fiber is made up of silicon dioxide. This is because silicon dioxide is “the most abundant element on Earth, after oxygen”, and its exploitation is not harmful to our environment. Proximus also stated that the production of “2kg of copper wire results” in the emission o 1,000 kg of CO2 as compared to fiber’s mere 0.06 kg.

The exploitation issue extends from source materials to delivery — labor and supply lines — and installation, all of which can have their own ESG impacts. It will take time and government involvement to ensure that the entire process is “clean”.

Nordic operator Telia Company AB (publ). said in its 2020 Annual Report that as much as 86% of its value chain emissions are generated in its supply chain. The company is using its influence to work with peers and companies in other sectors to help instill low-carbon operations and manufacturing, promote science-based targets to cut absolute greenhouse gas emissions by at least 50% by 2030, and achieve climate neutrality — zero greenhouse gas emissions — in its value chains by 2030 (including subcontractors). At year-end, 16% of total supply chains emissions were represented by suppliers.

In GermanyIn June 2021, the federal parliament passed a law requiring corporate due diligence to minimize the negative social and environmental impacts of activities that are associated with supply chains. The new Legislation will come into effect in 2023. In FranceThe state had already moved earlier in 2017, with a law whose name translates as the “law relating to the duty of care of parent companies and donor companies.” Commonly known as the Duty of Care or the Duty of Vigilance laws, it requires local companies to develop and implement measures to reduce social and environmental risks and to report on them.

As obvious as fiber’s advantages are, so too is the huge expected growth in data usage. This increases energy consumption by supporting more devices (think charging or connectivity) and may offset any gains made in network efficiency.

Energy efficiency can have obvious benefits, especially for mobile networks, given the traffic growth. These include cost control and reducing negative environmental effects. The use of more efficient cooling in data centers, decommissioning older systems such as copper, and the deployment new software technologies that can decrease energy use at mobile network sites are some of the solutions. Ultimately, current gains in 5G efficiency — 5G technology is up to 90% more efficient than 4G in terms of energy consumption per unit of traffic (W/Mbps) — according to Trials conducted by Ericsson and Telefónica SA — will likely be trumped by the predicted 343.1% increase in global data traffic between 2021And 2027.

Decommissioning copper

Fixed networks have the best short-term benefits in terms of ESG, revenue, and the retirement of copper networks across Europe. Cable’s eventual transition to full fibre will also be a clear benefit. Because much depends on the transition from copper to fiber and the shift of third-party network carriers to the new networks, the timelines for network shut downs are not always transparent in Europe. Kagan monitors the progress of copper switch-off plans in Western Europe.

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Recycling is an additional benefit of closing down copper networks. Proximus stated that its copper network decommissioning creates a stockpile containing 500 tonnes of copper each and every year. At the COMEX average cost for 2021 $4.24 per poundThis equates to an annual cost of $4.7 million. Copper is extracted from the ground during fiber installation, and other assigned works both inside and outside buildings. Proximus informed Kagan that from 2016 to year-end 2020 it had dismantled 2,800 km of copper network, which yielded more than 2,600 tonnes of copper for recycling — valued at an estimated $24.3 million at 2021 average prices.

Thanks to simplification of the network and modernization, the firm was able to remove 561 km old copper cables by 2021. It exceeded 150% of its 2021 target, with more that 752 tonnes being recycled as of the end of November 2021.

Group action

Momentum for sustainable technology moved beyond individual action in Europe, as members of GIGAEurope — a group consisting of private gigabit network investors Liberty Global B.V.NOS (Portugal), TDC A/S (Denmark and Nordics) and Vodafone Group PLC — founded the European Green Digital Coalition, which signed a declaration in March 2021. The goal is to work with organizations to establish scientifically sound objectives using common and standardized methodologies to reduce greenhouse gas emissions by 2030. This will allow for climate-neutral emissions or to be offset by initiatives that remove greenhouse gases.

Other plans include continuous improvement of networks and data centres, and the development and rollout of green digital technologies that improve energy efficiency to have a cross-sector positive impact. Priority sectors identified include energy, transport, manufacturing and agriculture. These industries will be contacted to develop best practices and guidelines for green digital technology implementation, and to encourage the adoption of new skills by personnel.

Meanwhile, Telia noted that it participates in several key initiatives: the Exponential Roadmap, the 1.5°C Business Playbook and SME Climate Hub. In September 2020, Telia, Ericsson, British Telecom, consumer goods company Unilever PLC and retailer Ingka Holding BV-owned Ikea AB founded the 1.5°C Supply Chain Leaders to establish exponential climate action in global supply chains. Telefónica, food and beverage company Nestlé SA and waste management firm Ragn-Sells AB joined in December 2020.

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