- Telecom operators face challenges with unreliable power and rising diesel costs.
- Diesel supply restrictions in several states are impacting crucial telecom infrastructure.
- Companies are investing in solar and battery solutions to reduce diesel reliance.
Unreliable grid power, diesel supply restrictions and rising fuel prices are creating serious operational challenges for telecom operators and tower companies across India. Companies are increasingly relying on diesel generators to keep mobile towers and data centres running during power outages, pushing up costs significantly.
The situation has worsened in recent weeks due to disruptions linked to the ongoing West Asia conflict, prompting the Department of Telecommunications to step in and coordinate with industry bodies.
How Diesel Supply Restrictions Are Affecting Telecom Networks
According to a Moneycontrol report, telecom operators and infrastructure providers have raised concerns with the Department of Telecommunications (DoT) about diesel supply restrictions in states including Uttar Pradesh, Odisha, Bihar, Andhra Pradesh and Telangana. These restrictions are directly affecting fuel availability for mobile towers, data centres and other critical telecom infrastructure, raising fears of network disruptions.
The concerns were raised during a May 22 meeting convened by the DoT’s disaster management unit with the Cellular Operators Association of India (COAI), the Digital Infrastructure Providers Association (DIPA), telecom operators, tower companies and network equipment providers to assess the impact of the Iran war on the sector.
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Operators also flagged supply-chain disruptions affecting telecom equipment, semiconductors, fibre components, petro-plastics and helium gas, warning that delays and shortages could significantly increase network deployment and maintenance costs.
“The issues primarily relate to restrictions on the overall quantity of diesel being supplied and denial of diesel supply in open/drum form, which is impacting telecom operations,” industry representatives said during the discussion, according to the report, citing a review of a copy of the office memorandum of the meeting.
Diesel prices have risen four times in the past 11 days, taking the retail price in Delhi to Rs 95.20 per litre. Peak summer demand has further strained power grids, increasing the risk of outages and putting additional pressure on telecom networks that require uninterrupted backup power.
How Telecom Companies Are Working To Cut Diesel Dependence
According to brokerage firm IIFL Capital, cited in the report, energy costs account for nearly 10-12% of telecom operators’ mobile revenue. Industry estimates suggest that every Rs 3 per litre increase in diesel prices could raise annual operating costs for operators by nearly Rs 300 crore.
The DoT’s disaster management unit has advised local telecom bodies to convene State Telecom Disaster Coordination Committee (STDCC) meetings in regions facing diesel shortages to ensure uninterrupted fuel supply for telecom sites. Tower companies are also expected to submit another communication to the DoT seeking urgent intervention on fuel supply and power reliability.
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On the ground, telecom companies have been steadily working to reduce their reliance on diesel-powered systems. Vodafone Idea identified lower diesel consumption as a key cost-optimisation strategy during a recent quarterly earnings call, and said it was increasing electrification across its network.
Indus Towers added nearly 2,500 solar-enabled sites during the quarter, taking its total to around 42,400, and reported a 7% year-on-year decline in diesel consumption despite higher co-locations and increased equipment loading. Bharti Airtel said it is cutting diesel dependence by transitioning to high-powered batteries and renewable energy solutions.
