Could driving usage undermine operators’ green credentials?
The telecom industry is increasingly focussing its efforts on sustainability and the environment, with the topic likely to be keenly discussed at MWC 2022 later this month. Indeed, operators and equipment providers aren’t only looking to cut their own emissions — they see themselves playing a pivotal role in helping other sectors to do the same. At a recent analyst briefing, Orange executives said that one gram of carbon emissions from the telecom sector could save 10 grams in another industry.
But operators, infrastructure suppliers and device-makers need to tread a careful path, as their traditional business models are based on increasing usage and predictable device replacement. Most operators are desperate to migrate customers to new 5G networks and earn a return on their expensive investments. But selling brand-new phones to people unconvinced of their value could be considered contradictory to society’s growing emphasis on repair and reuse. In our recent consumer research, over half of non-5G customers in the UK said they don’t need it.
In the same survey, 80% of respondents told us they’d consider getting their phone repaired if it broke outside its warranty period and they could do so at a fair price. Beyond saving money, the main motivator to do this was protecting the environment (see User Survey: Mobile Phone Buying, UK, 2021).
The mobile industry argues that new technologies are better for the environment, and evidence backs this up. Telefonica and Nokia, for example, demonstrated in 2020 that 5G is up to 90% more energy efficient per traffic unit than older networks.
But if this also accelerates consumption, the overall impact isn’t necessarily positive. In South Korea, 5G customers are using over four times more data than their 4G counterparts, at around 26 GB per month. And in 2021, BT said that heavy usage of streaming services like Netflix and Amazon Prime is triggering spikes in power demand that could harm the environment.
The telecom industry needs to avoid mixed messages as it encourages usage and upselling while touting its environmental efforts. I hope it avoids resorting to “greenwashing”, whereby PR teams put an increasingly tenuous environmental spin on company announcements to bolster their green credentials. Such tactics could undermine genuine efforts to tackle climate change. I’ve already spotted one example of using the environment to justify raising prices. It may be true that renewable energy carries a slight cost premium, but I’m not sure this message will wash with customers.
The industry has already done some great work to make networks more sustainable (see Insight Report: The Role of 5G and Networking in Sustainability). Some operators, such as Orange Poland, are building sustainable features into their services; its Flex offer includes a clever initiative where users can donate unused gigabytes of data in return for a commitment to plant trees (see Insight Report: Sustainability Helps Operators Differentiate Service Plans).
Operators have no choice but to embrace sustainability. Investors are increasingly evaluating companies based on their environmental credentials, and regulation will force them to achieve new targets. Furthermore, customers are becoming more in touch with environmental issues, so green technologies offer an opportunity to make significant cost savings.
As more announcements are linked with corporate responsibility, operators must make sure they find the right balance between protecting the planet and protecting their stakeholders.
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