Fiber and 5G deployments: a reference vision of the environmental potential of operators
When it comes to sustainable and green technologies, many operators see fiber deployment as key to meeting environmental goals. When Kagan recently surveyed 101 telecommunications professionals and 42 cable professionals around the world, only 19% of respondents specified that environmental impact was not a determining factor in the decision to switch to fiber, 35% of those questioned being attached to European telecom operators and 38% to European operators. cable operators. Yet technology alone is not enough to achieve environmental goals, and governments and businesses still have a long way to go before implementing a holistic approach.
Kagan estimates fiber penetration in Western Europe at 22.2% in 2021, with Sweden at 69.1% and Greece at 0.2%. Most countries in the region have fiber plans in place, and as rollouts accelerate, our current estimate, based on existing plans, will see penetration of just under 50% by 2030.
So how much more effective is fiber? A 2021 study by Prysmian Cavi e Sistemi Italia Srl – an Italian manufacturer of telecommunications and power cables also known as Prysmian Group – found that gigabit passive optical networks offer an 8.9% improvement in total energy consumption (MWh/year) compared to VDSL -vectoring, and 36.7% versus hybrid fibre-coaxial. The advantage of GPONs from an energy efficiency perspective is that they are passive, with no active optical elements between the central office and the end customer. Interestingly, point-to-point fibre-to-the-home (as opposed to the point-to-multipoint structure in GPONs, and providing a single strand of fiber rather than shared at each site) is 2.7% less efficient than VDSL. While FTTH-PtP costs are higher, the technology supports much higher performance as well as greater product differentiation and individual line upgrade capabilities.
Belgium’s incumbent telecommunications operator Proximus highlighted the environmental qualities of fiber, noting that data transmission over fiber uses “up to 12 times less energy” than over copper. In addition, the firm points out that the fiber is made of silicon dioxide, silicon being “the second most abundant element on earth, after oxygen”, and its exploitation “is not harmful to the environment”. Proximus adds that the use and production of “2 kg of copper wire leads to the emission of 1,000 kg of CO2” compared to 0.06 kg for fibre.
The operating issue extends from source materials to delivery (labour and supply lines) and installation, all of which can have their own ESG impacts. Ensuring that the whole process is “clean” will be challenging, time-consuming and will require government involvement.
Nordic operator Telia Company AB (publ) said in its 2020 annual report that up to 86% of its value chain emissions are generated in its supply chain. The company uses its influence to work with peers and companies in other industries to help instill low-carbon operations and manufacturing, promote science-based goals to reduce absolute greenhouse gas emissions from at least 50% by 2030 and achieve climate neutrality – zero greenhouse gas emissions – in its value chains by 2030 (including subcontractors). By the end of the year, suppliers representing 16% of total supply chain emissions had set science-based targets.
In Germany, the federal parliament passed a law on corporate due diligence obligations in June 2021 to minimize any negative social and environmental impact of activities associated with corporate supply chains. The new legislation will come into force in 2023. In France, the state had acted earlier, in 2017, with a law whose name translates to the “law relating to the duty of vigilance of parent companies and donor companies”. Commonly referred to as the Duty of Vigilance Act or Duty of Vigilance Act, it requires local businesses to design and implement measures to mitigate social and environmental risks as well as to report on these actions and the risks to them. themselves.
As obvious as the benefits of fiber are, so is the expected massive growth in data consumption, which increases power consumption by supporting even more devices (think charging, connectivity ) and increases demand for data centers, among other factors, potentially undoing gains made in network efficiency.
Improving energy efficiency has clear benefits, especially on mobile networks given the magnitude of traffic growth, from controlling costs to reducing negative environmental effects. Solutions include using more efficient cooling systems in data centers, decommissioning legacy systems that are less energy efficient like copper, and deploying new software technologies that can reduce power consumption in mobile network sites. Ultimately, current 5G efficiency gains — 5G technology is up to 90% more efficient than 4G in terms of power consumption per unit of traffic (W/Mbps) — according to tests conducted by Ericsson and Telefónica SA — will likely be overshadowed by the predicted 343.1% increase in global data traffic between 2021 and 2027.
On fixed networks, the clearest short-term benefit for operators in terms of ESG and revenue will be the withdrawal of copper networks in Europe and the eventual switch from cable to full fibre. Timelines for network shutdowns are still not universally transparent in Europe, as much depends on the transition to fiber and the shift of third-party network operators to new networks. Kagan follows the development of copper shutdown plans in Western Europe.
An added benefit to shutting down copper networks is recycling. Proximus said its copper dismantling creates a stockpile of 500 tonnes of copper each year. At the average COMEX price for 2021 of $4.24 per pound, this equates to an annual value of $4.7 million. Copper is recovered from the ground during fiber installation and other assigned work, both outside and inside buildings. Proximus informed Kagan that between 2016 and the end of 2020, it had dismantled 2,800 km of copper network, which produced more than 2,600 tons of copper for recycling, with an estimated value of 24.3 million dollars to the average prices of 2021.
The company removed 561 km of old copper cables in 2021 through simplification and modernization of the network. It has reached 150% of its target for 2021, with more than 752 tons recycled at the end of November 2021.
The momentum for sustainable technology has gone beyond individual action in Europe, as members of GIGAEurope – a group of private gigabit network investors Liberty Global BV, NOS (Portugal), TDC A/S (Denmark and Nordics) and Vodafone Group PLC – founded the European Green Digital Coalition, which signed a statement in March 2021. The aim is to engage with organizations to set science-based targets using methodologies standardized and common measures to reduce greenhouse gas emissions by 2030, with a goal that by 2040 emissions are climate neutral or are balanced by initiatives that remove greenhouse gases from the atmosphere, called Net Zero.
Additional plans include the continuous improvement of networks and data centers, the development and deployment of green digital technologies that provide measurable energy efficiency to generate cross-industry net positive impact. The priority sectors identified are energy, transport, manufacturing industry, agriculture and construction. The goal is to engage with these industries to flesh out guidelines and best practices for implementing green digital technology, and to drive the adoption of new skills for staff.
Meanwhile, Telia said it was participating in several key initiatives: the Exponential Roadmap, the 1.5°C Business Playbook and the SME Climate Hub. In September 2020, Telia, Ericsson, British Telecom, consumer goods company Unilever PLC and retailer Ikea AB, owned by Ingka Holding BV, founded the 1.5°C Supply Chain Leaders to establish exponential climate action in global supply chains. Telefónica, food company Nestlé SA and waste management company Ragn-Sells AB joined in December 2020.