Airtel Goes Solar to Save N28bn Monthly Diesel Cost As Nigerian Telcos Embark on Cost-cutting Measures

Nigeria’s telecommunications industry has been navigating through turbulent waters, grappling with financial headwinds that have significantly impacted revenues. Operators like Airtel and MTN – caught in a bind, have been forced to find innovative ways to mitigate the rising costs of operations without passing the burden onto consumers.

The sector is bearing the brunt of high energy costs, especially for diesel, while the Nigerian Communications Commission (NCC) has repeatedly denied their requests for tariff increases, pushing telecom giants to embark on aggressive cost-cutting measures.

Against this backdrop, Airtel Nigeria has disclosed that it is spending a staggering N28 billion per month on diesel to power its more than 15,000 base stations across the country. Each month, these stations consume around 22 million liters of diesel, a situation that has become untenable due to the ongoing hike in fuel prices and inflation.

This spiraling energy expenditure has forced the company to turn to alternative power sources, notably solar energy, and other renewable solutions, in a bid to reduce reliance on costly diesel and ensure financial sustainability.

During a media roundtable held in Lagos, Airtel Nigeria’s Director of Corporate Communications and Corporate Social Responsibility, Femi Adeniran, revealed the company’s plan to shift its energy consumption to greener alternatives.

“We are committed to minimizing our carbon footprint. Our transition to grid and solar power will significantly reduce diesel consumption and mitigate the impacts of climate change in Nigeria,” he explained.

According to Adeniran, Airtel is taking concrete steps to deploy solar energy across its network. This transition aligns with the Nigerian Communications Commission’s announcement last year that telecom operators should make a complete switch to renewable energy sources as part of the country’s broader sustainability goals.

For Airtel, this shift is not only a response to escalating diesel costs but also a reflection of its long-term commitment to environmental stewardship. The move is expected to reduce its monthly diesel consumption and lower its operating costs significantly.

Additionally, Airtel’s Chief Technical Officer, Harmanpreet Dhillon, provided more insight into the company’s sustainability strategy. He stated that Airtel is also investing in Lithium-ion batteries instead of traditional lead-acid batteries, which will help further reduce their environmental impact.

“Apart from reducing our carbon footprint, we are also adopting outdoor-operable electronics/telecom equipment. These devices can withstand extreme temperatures, humidity, and dust, eliminating the need for indoor air-conditioned spaces,” Dhillon noted.

He explained that the older equipment used by the company was highly sensitive to temperature fluctuations and required climate-controlled environments, which contributed to increased energy consumption.

“Now we are buying equipment that can operate in any environment, hence the power consumption goes down and doesn’t require high kilowatt consumption,” he added.

Airtel’s shift to renewable energy reflects a growing trend among telecom operators in Nigeria, as they seek to reduce operational costs in the face of regulatory constraints and market challenges. The entire industry is feeling the weight of rising energy prices, and operators are scrambling to reduce their dependence on diesel, which has long been the primary energy source for telecom infrastructure.

MTN Nigeria, the largest telecom operator in the country, is also facing similar challenges. In response, MTN has taken bold steps to renegotiate its tower lease agreements with IHS Towers. This strategic move, finalized in August, is expected to save MTN Nigeria approximately N100 billion annually. These renegotiations come as part of a broader effort by telecom companies to find cost efficiencies wherever possible, particularly in light of the NCC’s refusal to approve tariff hikes.

The NCC’s Stance and Its Impact

However, these cost-saving measures by Airtel and MTN are, at best, temporary fixes to a deeper problem. Telecom companies have been lobbying the NCC for months to approve tariff increases to offset the soaring costs of fuel, infrastructure maintenance, and general operations. But the regulator has remained firm in its stance, rejecting these requests out of concern for consumer welfare in a country where inflation and economic hardship are already biting hard.

While this decision by the NCC has offered relief to millions of Nigerians who depend on affordable mobile services, it has placed a tremendous financial strain on telecom operators. The refusal to approve tariff hikes means that these companies must bear the rising costs without passing them onto consumers, forcing them to look for ways to stay profitable while maintaining service quality.

Speaking at a recent Nairametrics webinar, MTN Nigeria’s Senior Manager of Growth New Business Tech Platforms IT echoed this sentiment, emphasizing the industry’s need to embrace renewable energy solutions to reduce operational costs.

“Powering terrestrial networks with diesel and petrol is very expensive, which is why telcos are exploring renewable energy options,” he said, highlighting that MTN is increasingly turning to solar and wind power to reduce its reliance on traditional fuels.

The ongoing push toward renewable energy solutions is believed to be a step in the right direction, and operators are optimistic that these changes will eventually lead to lower operating expenses. However, energy experts warn that the initial capital outlay for solar and grid power infrastructure is substantial, and the full financial benefits may take time to materialize.