Community Power from Mobile

Village mini-grids and charging stations, drawing electricity from solar-powered transceiver towers, are being trialed by a range of Mobile Network Operators in Africa and India.

Mobile network operators are installing transceiver towers in remote regions, far-removed from any grid infrastructure. There are over half a billion mobile phone subscribers worldwide living without grid-power, says the GSMA, the association representing mobile network operators worldwide. Many subscribers are travelling considerable distances and paying a relatively high fee to re-charge their phones.

In late 2010, the GSMA launched the Community Power from Mobile research program to find viable business models to supply energy to these off-grid communities. Network operators involved in the research include large transnational companies such as Vodafone and Orange, as well as local companies. By providing those communities with access to renewable energy sources, the mobile network operators hope to increase average revenue per user and build brand loyalty and brand equity.

Community tower power

Mobile network operators’ transceiver towers require an energy supply 24 hours a day. In off-grid situations, most rely on diesel generators. Diesel is expensive. Shipping diesel to remote locations makes it more expensive. Special supply and maintenance chains have to be set up. In some countries over 20% of the diesel is pilfered before it reaches the generator. Energy costs in sub-Saharan Africa and parts of India represent 40% of the operating expenses of mobile network operators. Solar-powered towers eliminate the supply difficulties, making them a competitive alternative to diesel generation.

“If you have these power resources in an off-grid environment and you have some off-grid capacity, you can share that with the rest of the community. It makes sense to develop business models based on the excess capacity distributed to the rest of the community in the form of street lighting, power to schools or clinics and related energy services,” says Michael Nique, strategy analyst on the GSMA’s Green Power for Mobile program.

Distributing excess power to the community also helps protect the tower, according to the GSMA. People are more likely to respect equipment that is providing them with a service.

Turning a service into a business

Many of the early projects to supply communities with charging facilities from a tower have been non-profit, corporate social responsibility initiatives. Companies like Safaricom in Kenya are strengthening their standing in the community by providing a free phone re-charge service from tower generation systems.

But one of the early lessons from the GSMA research is that there is no such thing as “excess” energy. All energy has a cost, and mobile network operators are reluctant to develop community power models that do not factor in that cost. Alternative energy-service business models need to be developed that deliver mutual benefits to the mobile network operator and the community and provide for the long-term maintenance of the services.

The mobile network operators in Africa are used to a fast-growing business environment with limited risk, based on proven business models. They have been able to concentrate on establishing communications access and selling airtime.  Do they want competition for the power for their towers? The role of the towers has been to provide customers with a reliable service. Competition for tower power from other energy consumers could be a challenge to that reliable service.  Failure to maintain a reliable service would damage the network’s reputation.

This is work in progress. The advantages of community power provision have to be proven.

“We still have a lot to do to understand the impact of energy services on the community,” says Nique. “In the next months we want to do field studies that will also tell us about the impacts on the business of the mobile network operators. Are people using their phones more? What is the impact on average revenues per user? Are there challenges we had not foreseen? Studies will be conducted with mobile network operators in Malawi, Kenya, Tanzania and South Africa.”

One interesting commercial model that is being developed in India is where the provision of power to the tower is out-sourced. The mobile network operator concentrates on his core business. The energy supplier focuses on his. The mobile network operator becomes a base customer, providing a reliable income to an energy supplier. That reliable income provides the energy supplier with a basis to build an energy supply business serving the community.

Nique is confident that viable Community Power from Mobile business models will be identified: “You are seeing a high traction and willingness from mobile network operators and regulators to adopt solar technology and to redistribute power around communities in India,” he says. “There is no reason why this trend will not move to Africa. It won’t be a revolution. But by 2015 the major operators in Africa will be really pushing and developing community power.  At the same time, I expect community power will be available at less than 10% of towers.”