DIPA seeks power tariff review as rise in mobile towers set to increase sector's opex

New Delhi: Telecom infrastructure body DIPA on Monday said it has urged the power secretary to review the electricity tariff levied on telecom companies across the country in the wake of enhanced capex required for the 5G network rollout.

Digital Infrastructure Providers Association (DIPA) seeks an industrial category power tariff on telecom companies as against the commercial category rate levied in most parts of the country.

The telecom infrastructure body has written to power secretary Alok Kumar, raising concerns about enhanced capex required for rolling out the 5G network that may lead to a rise in the cost of telecom services and requested relaxation in electricity tariff to lower the burden on the companies.

DIPA said the availability of 5G networks would necessarily require network densification in the form of several low-distance small cells rather than a grand tower or the masts.

"Additionally, enhanced fiberisation is a must for 5G services and to achieve the National Broadband Mission (NBM) Targets of 50 lakh km fiberisation, 70 per cent tower fiberization and 50 megabits per second speed of broadband. This would entail heavy Capex, thus raising the cost of telecom services, leading to a greater digital divide," DIPA said in a statement.

According to the industry estimates, almost 30 per cent of the Opex (operational expense) for the towers goes into electricity tariffs, which works out to be a substantial amount.

As per National Broadband Mission, the number of telecom towers is set to rise to approximately 12 lakhs by 2023 and 15 lakhs by 2024 from about 7 lakh towers deployed in the country at present. Additionally, with the launch of 5G, several small cells would be deployed, mostly using street furniture, DIPA said.

"It is right time to review the electricity tariffs which are being charged at exorbitant rates under commercial category on a nationwide basis. As of now, Maharashtra is the only state to have implemented the levy on industrial rates. The recently issued recommendation of the working group of Regulators of Telecom and Electricity, also recommends industrial/utility tariffs for telecom. Further, telecom services need to be provided uninterrupted power supply," DIPA director general TR Dua said in the statement.

The commercial tariff is higher by Rs 1.5-2 per unit across the country compared to the industrial tariff.

"In the absence of round-the-clock power availability, the IPs-1 are forced to use DG Sets to ensure continuity of telecom services to the subscribers. This leads to an additional financial burden, and also causing environmental degradation. It is our humble submission to give a considerate view and implement this colossal much awaited Reform, which would further facilitate affordability of telecom services and bridge the digital divide," DIPA said.