COAI bats for industrial electricity tariff rates for telecom infra

Telcos' body COAI has made a strong plea that the telecom sector be charged industrial tariffs for electricity and not commercial rates, and that power connections be expeditiously provided to telecom infrastructure facilities.

It said doing so was important given the essential nature of services and socio-economic benefits that accrue across multiple sectors from faster 5G deployments.

COAI - whose members include telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea - has also batted for the sector to be provided uninterrupted 24x7 power supply.

"Telecom is an infrastructure industry, but we are still being charged at commercial rates for power. So we don't get the benefits," SP Kochhar, Director General of Cellular Operators' Association of India (COAI) told PTI.

 

COAI has demanded that telecom infrastructure be charged at industrial and not commercial rates for electricity. Today, most states provide electricity on commercial tariff rate to telecom industry, placing it in one of the highest brackets of power tariffs.

While telecom tariffs in India are the lowest, the electricity tariffs are being charged to the industry at substantially high rates under the commercial category, COAI rued.

In most states, the difference between an industrial electricity tariff category and a commercial electricity tariff is significant, leading to an avoidable burden to the overall telecom sector.

"Applying the industrial electricity tariffs for telecom services will yield significant cost benefits for players, that will give the telecom sector more money to roll out infrastructure," Kochhar contended.

According to COAI, the criticality of telecom connectivity has been "proven beyond doubt" during the pandemic when the sector supported almost all the businesses and services.

Hence, for healthy progress of the sector, overall benefits to businesses, and the larger socio-economic growth and prosperity of the country, it is important that industrial tariffs be made applicable for telecom across all states, COAI said.

The association has written to various states, flagging the issue, and making a case for applicability of industrial tariffs for electricity usage by the sector.

COAI has also made a case for "priority electricity connection" arguing that new connections need to be provided in a predictable time-bound manner.

"We want electricity connections on priority, and assured supply of electricity, which is the case with many categories that are essential such as water, hospitals. Telecom industry does not, so the result is most of the time we are dependent on diesel (diesel generators)," he said.

For base transceiver station (telecom towers) to operate without interruption, a continuous, outage-free grid supply is essential so the dependency on diesel generators can be minimised, and telecom operators can achieve sustainable profits.

On green energy, COAI is pushing for load aggregation for telecom sites to avail the green open access energy. COAI is of the view that electricity consumption at each telecom site should be allowed to be aggregated (that is allowing aggregation of loads of multiple towers) and offset with green power (solar, wind, hydro) generated at distant locations.

Telecom towers, which are the backbone of the network, have a power energy load requirement of 10 kW.

"Hence, while the reduction from 1 MW to 100 kW for availing Green Open Access is a welcome step, it is not helping the telecom industry, where the number of telecom towers are projected to grow at a very fast pace. Under the current regime, the only way to be eligible, is by allowing aggregation of loads of multiple towers, which is the industry ask," COAI said in a note.

These demands being addressed would spur the telecom infrastructure proliferation, that would in turn translate into better and deeper penetration of telecom connectivity across states, including for advanced 5G networks.

Such high-speed networks will enable higher technology intervention in critical sectors like education, healthcare, agriculture and others. "Further, with the number of network elements increasing due to 5G deployment, the net gain in numbers will more than offset the perceived financial impact to the state, owing to industrial tariff being lower than commercial tariff," COAI said.