Dialing down the carbon: Telco sustainability surges on the back of four new trends
Telecommunications companies can reduce their carbon footprint by shutting down copper wire and 3G wireless networks, changing their field service fleets to EVs, and switching to 5G radio gear that has a “snooze button.”
Deloitte predicts that telcos worldwide will be able to reduce their carbon footprint by 2%, or 12 million tons of carbon dioxide equivalent (CO2e) in 2024 and do the same again in 2025.1 The telco industry is not a particularly egregious emitter: It connects over 95% of the planet’s people over wired and wireless networks and yet is directly responsible for only about 1.6% of 2022’s global emissions of 37 billion tons CO2e, or about 600 million tons.2 That said, telcos are publicly listed, consumer-facing, for-profit companies, and improving sustainability can help comply with regulations, attracts subscribers, and helps the bottom line.
Some of that reduction is expected to come from strategies that telcos have been using for years, such as buying more renewable energy (some telcos are already at 100% renewable energy, but many more expect to get 50% of their energy from renewables by 2025),3 running data centers more efficiently (natural cooling can reduce energy use by 30%),4 getting consumers to keep phones longer,5 and encouraging the growth in the secondhand phone market—a US$50 billion run rate industry in 2023.6 None of this is new.
What is new—or at least becoming more common in 2024—are four other solutions.
Copper wireline switch off
Switching copper off can reduce carbon footprint while potentially saving billions of dollars annually for carriers. Readers who are old enough will recall that landline telephones worked even when the power went off. That’s because the twisted pair of copper wires that ran from the phone company central office into homes not only delivered the audio signal for voice communication, but also a 48-volt direct current to power the phone and the ringer. As more homes have moved to fiber optic cable or cut the landline via fixed wireless access, the percentage of consumers who need to connect over copper, either for voice or data connection over DSL, has been dropping for decades. Not only is fiber easier to maintain and requires fewer field service calls than copper, but it also uses up to 80% less energy, both on the twisted pairs to homes and central office exchanges.7
Singapore has already switched off its copper network, but we expect copper retirement to accelerate in 2024, with networks in Asia/Pacific (Japan, Australia, New Zealand) and 10 markets in Europe (Norway, Sweden, Spain, Portugal, Estonia, France, Italy, the United Kingdom, and Switzerland) moving forward on shutting down copper.8 By 2025, at least some countries will see close to 100% switch off, and many more will be at 25% to 50%.9
3G wireless switch off
Speaking of networks that now have few users and use a disproportionate amount of power … Remember 3G wireless networks? In addition to being able to use that 3G spectrum for 4G or 5G (aka refarming), there are significant efficiency and carbon gains to shutting 3G networks down: One report estimates that shutting down 3G reduces energy costs by 15%.10
Introduced in 2001, 3G peaked in many markets around 2012, and has gradually been replaced by 4G and now 5G networks offering higher speeds and vastly superior efficiency/bits transmitted. 3G networks are still heavily used in parts of the developing world: Smartphone users in Angola and Ethiopia spent 40% of their time on 3G in 2023.11 But in other markets, 3G was shut down years ago, including all of Taiwan from 2017 to 2018. In the last six years, 3G has been switched off by 58 operators across 22 countries (averaging about 10 operators and four countries annually), and we expect to see shutdowns accelerate to 15 operators across six countries in 2024 and a further 26 operators across 10 countries in 2025.12
Making field service fleets greener
Telcos have big fleets of commercial vehicles and making those more sustainable can have a big effect. A commercial vehicle emits up to 21x as much carbon dioxide as a light-duty passenger vehicle, and although commercial vehicles represent only 20% of all vehicles, they make up 60% of road transport emissions.13
For a single operator, maintaining tens of thousands of cellphone towers and connecting millions of households and businesses requires a massive field service fleet of cars, trucks, and vans. As an example, one UK operator has a fleet of 33,000 vehicles, which is the second largest commercial fleet in the United Kingdom and is responsible for over two-thirds of its direct (scope 1) emissions.14 As charging networks get larger, and as more electric vehicles (EVs) such as vans and trucks are being manufactured, the pace of electrification is accelerating. A French operator had 3,000 EVs in its fleet by the end of 2022 with plans to double that by 2025, and also took delivery of the first hydrogen-powered van in 2023.15
Next-generation 5G gear gets greener
5G radios can use a lot of power, but new technologies let them go to sleep when not in use, saving telcos gigawatt-hours of electricity and megatons of CO2e annually.16
There are a host of technologies that allow 5G to do more than 4G, one of which is an active antenna unit (AAU). Instead of a passive antenna, 5G AAUs are capable, using a technology called massive MIMO, of beamforming, which allows for much higher speeds, capacities, spectral efficiency, and lower cost per megabit, but at the cost of increased power consumption.17 Most of the power draw from the various baseband units (BBUs) and remote radio units (RRUs) is the same for 4G and 5G. The big changes in capability and power consumption come from AAU drawing 4.2 kilowatts, which is over 60% of the power consumption of a 4G base station.18 With additional frequencies supported, power consumption can climb even further, up to 20 kilowatts. This not only requires improved power supplies—costing billions of dollars in upgrading or retrofitting for a large network19—but also has a negative effect on a telco’s carbon footprint.
If fully utilized, that 5G power consumption could deliver many millions of bits of data to thousands of users, and 5G networks are 90% more efficient than 4G when measured in bits per kilowatt.20
But when not fully utilized, 5G is using a lot of power and may not be serving enough customers to justify it. And first-generation 5G equipment doesn’t do well at going into sleep mode (also known as low power mode or deep idle mode) and adapting its power consumption to the usage on a flexible basis. There are nonflexible solutions: Some telcos have resorted to literally turning off their 5G networks at night when utilization is low and forcing customers to rely on the legacy 4G networks only.21
That is about to change in 2024, with all of Ericsson, Nokia, Samsung, and Huawei, (which combined make up around 87% of the global market for 5G radio access networks)22 introducing 5G RRUs, BBUs, and AAUs that use much less energy, often powered by AI algorithms and new semiconductors.23 Across the board, they claim that power consumption for second generation 5G gear is 20% to 50% lower than the previous generation,24 and up to 94% lower during periods of low traffic.25 There are also versions that are aimed at the 5G Internet of Things (IoT) market, that have a reduced capability and use much less power than full 5G, and even less power than equivalent 4G solutions.26
At a high level, 5G networks are often well deployed in most major markets, and most operators are not likely to rip out older 5G radios and antennas for newer sustainable ones. For regions that are only just beginning to deploy 5G, the new equipment should be used, and as older gear fails over time, it can be replaced with more efficient equipment.
The biggest contributor to improving the environmental footprint of 5G radios in 2024 and 2025 will likely be in 5G deployments that have been slow up until now. As telecom infrastructure companies intensify their 5G coverage with more towers and antennas, they can likely buy more energy-efficient gear.
The bottom line
It isn’t just telcos and their twisted copper pairs that can be switched off and replaced with more efficient fiber optics. Cable companies use coaxial cable to deliver their signals for TV and internet. It’s unpowered, so shutting it off saves less energy. However, according to one study, moving to passive optical fiber to the home network uses about 9% less electricity than a coaxial cable solution (for comparison, the fiber solution uses 37% less electricity.)27
Also, although 5G networks have the most power-hungry antenna technology, they are currently often underutilized and architecturally are the easiest to power down when underutilized due to their advanced core (the 5G New Radio standard).28 That isn’t to say that sleep mode technology can’t be used for 4G, 3G, or even 2G networks. The energy savings are not quite as large, and as 2G and 3G networks are shut off, most of the focus is expected to be on 4G.
Equally, although the focus may be on the 3G shutdown, there are also still 2G networks running, primarily for machine to machine or IoT communications, such as smart meters.29 They don’t use as much power as 3G, but they are also expected be shut down over the next decade. Some countries are moving more quickly on 2G shutdowns (France by 2025) while others are slower (the United Kingdom by 2033).30
Telcos can do a lot to reduce their scope 1 direct emissions (electrifying their fleets), or scope 2 purchased power emissions (5G sleep mode, copper and 3G shutdowns), but scope 3 indirect value chain emissions are likely a more significant hurdle. Handsets are a big part of telcos’ purchased goods and services. In the United States, carriers are responsible for 75% of all smartphones purchased each year (it is much lower in Europe), and each new smartphone has a footprint of 85 kilos of CO2e.31
As we said in our 2022 TMT Predictions on making smartphones more sustainable, “Because manufacturing accounts for almost all of a smartphone’s carbon footprint, the single biggest factor that could reduce a smartphone’s carbon footprint is to extend its expected lifetime.”32
Carriers can help in that, but it’s tricky, as they should work with their customers to achieve these goals and can only do so much on their own. They may want to encourage customers to keep phones longer: New European Union regulations support that, requiring components and software support to last 5 years.33 Carriers can not only offer more attractive SIM-only plans, but also lower new phone subsidies; offer refurbished phones, incentives for repair services, and rewards for trade-ins; and dispose of phones more sustainably—preferably recycling phones rather than contributing to the growth in e-waste.