High power costs hurting telecoms

With unreliable power supply in some parts of the country, telecom companies are beginning to feel sharp pains as they have to rely on diesel to run their several base stations.

With unreliable power supply in some parts of the country, telecom companies are beginning to feel sharp pains as they have to rely on diesel to run their several base stations.

The companies are also feeling a ripple effect as they have to maintain the generators which have seen operational costs increase.

The Business Times has learnt that Rwandatel and MTN Rwanda are spending a combined total of Rwf120 million monthly on fuel.

MTN’s power budget has been pushed up by the many standby generators that gulp close to 120,000 litres of fuel monthly.

MTN Rwanda has 60 base stations while Rwandatel has 40 that run on generators 24 hours-7 days a week.

“Obviously high fuel costs are increasing our operational costs,” said Patrick Kariningufu, Chief Executive Officer (CEO) of Rwandatel.

Themba Khumalo, MTN Rwanda Chief Exeutive Officer recently said that as MTN ventures into remote areas, the company is meeting challenges as it has to provide its own power.

According to the MTN Group Integrated Business Report for the year ended 31 December 2007 that The Business Times has seen, the energy supply challenges have put MTN Group business under pressure to find alternative energy sources.

“MTN Rwanda is exploring the use of alternative power sources such as wind, solar and hydrogen to run its base station,” the report says.

MTN may spend between USD 5 m to 6 m to on alternative power sources.

When installed, the power bill will reduce by 50 percent, according to Rami Farah, MTN Rwanda Chief Technical Officer.

Wind and solar powered stations require less maintenance than a diesel driven generator which generally requires, at a minimum, a monthly visit for refueling.

Diesel power is expensive, especially in cases where it needs to be delivered to sites without road access.

The use of alternative power sources makes it potentially more viable for operators to connect people in remote communities with little existing infrastructure or even roads.

Energy experts say telecom companies can go for a combined wind and solar powered system, rather than selecting one or the other, because the same rig can be used in a variety of different environments.

The experts say diesel generators remain cheaper to install but this is offset by higher operating expenses.

They also say excess power from wind and solar systems can be either sold to power-generating firms, where connections to a grid are possible, or supplied as a resource to the community around a base station.

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