KEY POINTS
- Nigerian telecom companies face massive diesel costs due to unreliable electricity.
- Airtel and other telecoms are turning to solar and other renewable energy solutions.
- Challenges like theft and insufficient power backup complicate the renewable shift.
Telecommunication companies in Nigeria are moving to renewable energy to manage increasing diesel prices.
The industry, which depends on off-grid generators, now uses between N56.24 billion each month on operation, statistics have revealed.
The cost of diesel has increased by more than 60% in the past year, which has put pressure on the sector’s profitability. In response, most telecom operators are trying to shift towards solar energy and lithium batteries to save cost and decrease reliance on diesel.
Rising costs and energy challenges
Telecom operators in Nigeria consume about 40 million litres of diesel monthly to supply 127, 000 base stations. These companies have felt the heat of the recent increase in the pump price of diesel, which was said to have hit N1,406 per litre in August 2024, raising their fuel costs from N34.17 billion last year to N56.24 billion this year.
According to Gbenga Adebayo, President of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), energy consumes about 35% of operational costs, a fact that points to the possible sector’s unsustainability.
A shift towards renewable energy
Telecommunication companies are now looking for ways on how to solve the energy problem. For instance, Airtel Nigeria used N28 billion to purchase diesel in May 2024 alone. The business is now piloting solar systems with lithium batteries to have a cost-effective solution.
According to a report by BusinessDay, this change is not peculiar to Airtel alone, other telecom companies such as MTN and IHS Towers have also considered solar, compressed natural gas (CNG), and liquefied petroleum gas (LPG). The market experts’ opinion on the full adoption of renewable energy shows that telecoms can cut costs by as much as 30% of their energy expenses.
Theft and other obstacles
Renewable energy is something that will offer people a way out in the future, but like anything resourceful, it has its drawbacks. Two major concerns persist, theft of solar panels and batteries. Despite these obstacles, telecom operators continue to push forward with green energy initiatives, aiming to reduce costs and improve long-term sustainability.
