Indus looks at replacing diesel with solar

India’s largest consumer of diesel generators and its larges tower firm Indus Towers is considering replacing diesel generators with solar panels. The company, jointly owned by mobile operators Bharti Airtel, Vodafone Essar and Idea Cellular, buys up nearly 35% of all diesel generators made in India.

“The initial program will cover 2,500 towers,” said BS Shantaraju, CEO of the firm jointly owned by Vodafone Essar, Bharti Airtel and Idea Cellular.

Indus, formed three years ago, hosts 48% of all cell-phone antennas in the country. It also accounts for more than a third of the 3 lakh telecom towers in India.

In all, it consumes 3 million units of electricity a year, enough to power more than 1 million Indian homes and is the single largest power consuming company in each of the 16 states of India where it has operations.

While most of the 1.1 lakh towers owned by Indus are powered by the power grid, operators have to depend on diesel generators in rural and far-flung areas, such as mountains and jungles. It is estimated that there are around 20,000-30,000 diesel-fueled telecom towers in the country, according to industry esitmates.

Shantaraju says it has had mixed luck with trying alternate fuels. Among those that it has tried are hydrogen-powered fuel cells and liquified petroleum gas or LPG. “We are working on an alternative to seeking the commercial LPG from the market. Otherwise, we will end up buying all the LPG in the country,” the CEO points out.

Solar may be the answer, especially in a sunny country like India. Under the pilot program, the company has decided to go for an ‘outsourced’ model solar power production. It has entered into agreements with six companies who will bear the initial cost of putting up the solar installations and maintaining them in working condition.

In return, Indus will pay a fixed amount every month. “Solar is about 20-25% cheaper than diesel,” says a company official, while not revealing the exact numbers. Unlike diesel generators, you do not need to employ a security guard or a minder to regularly monitor and re-fuel the generator regularly. Indus indirectly employs around 50,000 people in the country today — one for every two towers.

Shantaraju also said the firm broke even nearly a year ago and has managed to double its revenues in two years to $2 billion. The firm is expected to add around 5,000 towers a year for the next few years, he added.

The CEO, however, dismissed the suggestion that plans are being drawn up for an IPO to hit the share market. Bharti and Vodafone each have 42% stake in the firm, with Idea holding the remaining 16%. It had more than 2.02 installations on its 1.1 lakh towers as of end of December, giving it a 48% marketshare in mobile-antenna hosting in India. In comparison, Anil Ambani’s Reliance Infratel is estimated to have around 40,000 towers and around 60-70,000 tenants.